The PJM Interconnection's independent market monitor can file a complaint against the grid operator regarding a market seller's fuel cost policy, the Federal Energy Regulatory Commission said in a recent order on rehearing.
In that decision, FERC denied rehearing in part and granted rehearing in part with respect to an April order that conditionally approved PJM tariff changes related to the grid operator's requirement that power generators have fuel cost policies on file for use in determining market sellers' cost-based offers.
Following the April order, PJM argued that the tariff language relied upon by the commission should be read to permit the independent market monitor, or IMM, to file a complaint against a market participant but not against PJM.
FERC in its Aug. 30 order on rehearing disagreed, however, saying nothing in the grid operator's tariff limits the parties against whom the IMM can file a complaint. Therefore, the commission denied rehearing on the issue and affirmed FERC's determination that a portion of PJM's tariff permits the IMM to file a complaint against PJM regarding a market seller's fuel cost policy.
Review of fuel cost policy "directly relates" to the IMM's ability to "review offers or cost inputs to ensure they are reasonable in the event market power mitigation is required," the commission said. In addition, because the grid operator approves each generator's fuel cost policy, "PJM is a legitimate respondent to a complaint under this provision," FERC said.
Also in the order, FERC granted rehearing on a separate issue the market monitor raised. The IMM argued that PJM's operating agreement should remove language stating that disagreements between the IMM and PJM over whether a market seller's cost-based fuel offer complies with the seller's fuel cost policy should be referred to FERC's Office of Enforcement.
After further consideration, FERC said it agreed with the IMM and directed PJM to submit a compliance filing within 30 days to remove that section of the operating agreement.
Rather than refer those disagreements to the Office of Enforcement, "such disputes are the province of the commission and its administrative law judges to address in response to a complaint when appropriate," FERC said.
Lastly, FERC denied a request for rehearing from the Electric Power Supply Association. That group sought rehearing of the commission's decision to allow PJM to assess penalties for a minimum of one day for failure to comply with its fuel cost policy.
The group argued that the one-day minimum penalty would create a retroactive penalty in circumstances where PJM had not notified the market seller of its noncompliance or where the market seller had no opportunity to correct its offers.
FERC, however, denied the request for rehearing, saying the Electric Power Supply Association's challenge to the commission's acceptance of the penalty structure "is, in essence, a late-filed request for rehearing" of a 2017 order and "is thus statutorily barred." ( FERC docket ER16-372 )
Jared Anderson is a reporter for S&P Global Platts, which, like S&P Global Market Intelligence, is owned by S&P Global Inc.