FERC Filings
EPSA's Motion to File Out Of Time For Proceedings Consolidation and Request A Technical Conference on PJM's
Background
In its January 25, 2005 order on rehearing in Docket No. EL03-236-005, the Commission approved PJM’s proposal to suspend offer capping in load pockets deemed workably competitive. However, the Commission was concerned that the test employed by PJM to determine the competitiveness of load pockets, known as the “no three pivotal supplier” test (N3P Test) may be unjust and unreasonable and instituted a Section 206 proceeding directing PJM to support its test. The Commission stated that the “test may be too restrictive and will impose mitigation even in markets that are workably competitive.” The Commission also found that “PJM has not satisfactorily explained why such screens, or reasonable derivations of these screens, are not appropriate for determining when load pockets are sufficiently competitive to permit relaxation of mitigation.” The Commission directed PJM to, among other things, address why the Commission’s previously established market power screens, or reasonable derivations thereof, were not appropriate for determining when a load pocket was competitive in order to suspend mitigation. The Compliance Filing and the attached declaration of Mr. Joseph E. Bowring submitted by PJM on March 4, 2005 attempts to address the Commission’s concerns.
Under the N3P Test, generation offer price caps “shall be suspended for any transmission limit(s) for any hour in which there are not three or fewer generation suppliers available for redispatch under subsection (a) that are jointly pivotal with respect to such transmission limit(s).” In essence, offer caps will continue to be in place anytime one supplier is a pivotal supplier or two or three suppliers are “jointly” pivotal (“jointly pivotal” suppliers means that there is a combination of suppliers in the load pocket that, if removed as a group, will result in a short position within the load pocket). Thus, offer caps will be suspended only when there are no fewer than four jointly pivotal suppliers in a location. In its Compliance Filing PJM contends: 1) the N3P Test is consistent with the market screens adopted in AEP Power Marketing, Inc. et al. 107 FERC 61,018 (2004) (“AEP Order”); 2) the use of the three jointly pivotal supplier test as a trigger for suspension of offer-capping is appropriate without modification; and 3) that the N3P Test is not too restrictive.
The Commission’s recognition of the importance of resolving N3P Test was evidenced in its April 18, 2005 Order that set for hearing two PJM proposals that concerned offer caps on generating units dispatched out of economic merit for reliability for the many new control areas being integrated into PJM. Importantly, the order set out the decisional hierarchy for proceedings associated with the three pivotal supplier issue. The ALJ addressing the offer capping in the new PJM control areas proceeding can only go forward on issues not related to the resolution of the three-pivotal supplier test issues in docket No. EL03-236-006 -- which awaits the Commission determination about the three pivotal supplier issues in Docket No. EL03-236-003. Consequently, all other dockets with an interrelationship with the three pivotal supplier test await resolution of Docket No. EL03-236-003.