Commissioner Richard Glick
July 16, 2020
Docket No. ER20-1414-000
Order: E-24
I support today’s order because I agree that these enhancements can improve price formation and real-time dispatch in PJM. I write separately to address the concerns raised in the record about the exercise of market power. Although competitive wholesale electricity markets have yielded tremendous benefits to customers and industry, continuing to realize those benefits requires that market outcomes be the product of genuine competition, not market manipulation.
The changes accepted in today’s order provide greater flexibility for Market Sellers to reflect actual costs and their capability to ramp their resources in their offers. Nevertheless, the benefits for price formation and dispatch will be realized only if Market Sellers use this enhanced flexibility to reflect actual costs and capabilities. The Market Monitor raised concerns that some entities could use the additional flexibility afforded by these changes to exercise market power. I take those concerns seriously.
I support these changes because we have recently required PJM to include in its tariff a provision that would require Market Sellers to submit accurate ramp rates.[1] I believe this addresses the Market Monitor’s concern ensuring that generators provide achievable and accurate ramp rates based on their actual physical capability. Even so, I urge PJM and its stakeholders to consider whether ramp rates should be subject to parameter mitigation to more effectively protect the market against the potential exercise of market power.
For these reasons, I respectfully concur.
[1] PJM Interconnection, L.L.C., 171 FERC ¶ 61,153, at P 271 & n.582 (2020) (citing proposed Operating Agreement, Schedule 1, § 1.7.19 and noting the filing pending in this docket).