PJM Seams Update: Day-Ahead M2M Revisions to MISO- PJM Joint Operating Agreement Asanga Perera Market-to-Market Lead Market Implementation Committee August 12, 2015
Purpose Overview This presentation provides an informational update on projected MISO-PJM Joint Operating Agreement (JOA) revisions Key Takeaway PJM intends to file a MISO-PJM JOA enhancement by August 31, 2015 This enhancement is designed to accommodate MISO-PJM Day-Ahead (DA) Firm Flow Entitlement (FFE) exchange implementation 2
Background In the Joint and Common Markets (JCM) efforts, MISO and PJM have been discussing an initiative to exchange FFEs in DA This initiative will enhance RTOs DA M2M coordination practices and their Real- Time (RT) M2M settlement payments According to the JOA provisions, currently for projected M2M Flowgates, RTOs limit each others market flows to their FFEs RTOs have discovered that there could be an opportunity to exchange unused FFEs in a DA basis for targeted M2M Flowgates in an attempt to: Minimize Joint Bid Production Cost - Overall savings to RTOs Minimize Real-time M2M payments Improve FTR funding 3
JOA ICP Revisions for DA JOA Interregional Coordination Process (ICP) section 4 describes the steps to perform the DA FFE exchange However, the current language could be enhanced to: Provide flexibility and clarity in executing this protocol Provide consistency between the DA and RT M2M settlement calculations 4
Flexibility and Clarity JOA ICP Revisions for DA Flexibility, Clarity and Consistency ICP Section 4 requires this protocol to be utilized infrequently, since the term infrequently is vague and since the RTOs would like to utilize this protocol in a flexible manner, RTOs plan to remove this provision ICP Section 4.1 requires this protocol to be executed prior to 08:00 EST and 10:00 EST on the day before the operating day, since the RTOs DA market execution timeline could be revised in the future, RTOs would like to introduce flexibility to this provision by removing explicit time requirements Instead of explicit times, RTOs will introduce a requirement for FFE exchange request to occur an hour prior to DA bidding deadline 5
Clarity JOA ICP Revisions for DA Flexibility, Clarity and Consistency RTOs have agreed to cancel the FFE exchange agreement under certain circumstances RTOs will only exchange FFEs if the Flowgate Shadow Price is below a certain threshold defined by the requesting RTO If the RTOs realize that the FFE request cannot be achieved below the requesting RTO s defined threshold, RTOs will cancel the FFE exchange This cancelation would occur within an hour of RTOs DA clearing process RTOs are introducing a new provision to ICP section 4.1 to clarify this agreement 6
JOA ICP Revisions for DA Flexibility, Clarity and Consistency Consistency ICP Section 4.2 defines the DA M2M settlement equation, this equation is utilizing terms that are inconsistent with the terms utilized to define RT M2M equation defined in ICP Section 3.2 In an attempt to introduce consistency between the DA and RT M2M settlement equations, RTOs plan to revise ICP Section 4.2 7
Next Steps PJM intends to file the JOA ICP enhancements with FERC by 8/31/2015 requesting an effective date of 9/30/2015 8
Appendix A JOA Revisions 9
ICP Section 4 Revisions Flexibility and Clarity 4 Day-Ahead Energy Market Coordination The Day-Ahead energy market coordination focuses primarily on ensuring that the Day-Ahead scheduled flows on all M2M Flowgates are limited to no more than the Firm Flow Entitlements for each RTO. When system conditions can accommodate the change, either RTO may request that the Day-Ahead flow limit be raised above its Firm Flow Entitlement. Normally, this protocol will be utilized infrequently and only when the need for additional congestion relief assistance is predictable on a Day-Ahead basis. 10
ICP Section 4.1 Revisions Flexibility 4.1 Day-Ahead Energy Market Coordination Procedures An M2M Flowgate limit exception is a request to alter the M2M Flowgate limits, as described above, that will be modeled in the Day- Ahead markets and/or the Day-Ahead reliability analysis. The following procedure will apply for designating M2M Flowgate limit exceptions: 1. Prior to 0800 EST on the day before the Operating Day, iif the Requesting RTO identifies a need to utilize more of an M2M Flowgate than it is entitled, it may request the Responding RTO to lower its Day-Ahead Market limit below its Firm Flow Entitlement by a specified amount and for a specified range of hours. The Requesting RTO must request the adjustment from the Responding RTO as soon as possible but not later than one hour prior to the Responding RTO s deadline for submitting bids and offers in the day-ahead market. 2. If the Responding RTO agrees to provide the limit reduction, it will communicate the approved amount to the Requesting RTO by 1000 ESTas soon as possible but not later than to the Requesting RTO s deadline for submitting bids and offers in the Day-Ahead Market. 3. The Requesting RTO may increase its limit on the M2M Flowgate by the agreed upon and specified amount and for the specified range of hours. 4. Either Party may rescind the agreement up to one hour after the Responding RTO s deadline for submitting bids and offers in the day-ahead market. 11
ICP Section 4.1 Revisions Consistency 4.2 Day-Ahead Energy Market Settlements The Day-Ahead payment for the RTO that is requesting congestion relief will be calculated as follows: Requesting RTO Payment to Responding RTO = Approved Day-Ahead Adjustment for M2M Flowgate * Responding RTOs M2M Flowgate constraint shadow price. Payment = Approved MW *Transmission Constraint Shadow Price in Responding RTOs Dispatch Solution 12
Appendix B Reference to JCM Benefits Analysis 13
DA FFE Exchange Benefits Example Breed_Wheatland 345 flo Jefferson_Rockport 765 Flowgate for 1/11/2013 $1.2 million RT JOA Settlement between MISO and PJM On average, PJM s Real Time Market Flow is 198 MW more than PJM s FFE On average, MISO s Real Time Market Flow is 152 MW less than MISO s FFE What happens when RTOs exchange FFEs using the DA FFE exchange protocol? 14
DA FFE Exchange Benefits Example 20MW Exchange (MISO -> PJM) 15
DA FFE Exchange Benefits Example 60% of MF-FFE Exchange (MISO -> PJM) 16
Reference to JCM slides for DA FFE Exchange Benefits http://www.miso-pjm.com/~/media/pjm-jointcommon/stakeholdersgroup/20150527/20150527-item-05-day-ahead-market-to-market-coordinationbenefit-analysis.ashx 17