Commissioner James Danly Statement
February 22, 2022
Docket No. EL19-58-010
I concur because in this order[1] we finally approve the deadlines in accordance with which PJM Interconnection, L.L.C. (PJM) is to hold its base residual auctions (BRA or auction),[2] which have been delayed for far too long. What once were three-year forward auctions have had their periodicity reduced to a year or less. The Public Utilities Commission of Ohio (PUCO) has explained that the delays have cascading consequences,[3] and “the harm in continually moving the auctions is real; not theoretical.”[4] The PUCO is correct—the uncertainty around timing disrupts the market forces upon which the Commission claims to rely, thwarting the development and internalization of the price signals required for orderly entry and exit and imperiling reliability.
While the Commission, as regulator, bears most of the blame for the sorry state of PJM’s auction schedule, it is by no means alone.[5] PJM itself has played a role in these delays, particularly given its filing to eviscerate its Minimum Offer Price Rule last summer and the auction delay it requested in September 2021.[6] This last delay is particularly galling. Given its role in causing and requesting auction delays, PJM’s call for the Commission to “expeditiously”[7] and “promptly issue an order and provide much needed market certainty”[8] is . . . brazen.
I note that some pre-auction deadlines referenced in PJM’s filing already have passed.[9] The Commission must ensure there are no further delays in PJM’s auction schedule.
For these reasons, I respectfully concur.
[1] PJM Interconnection, L.L.C., 178 FERC ¶ 61,122 (2022).
[2] While the months and years are identified, the specific auction deadlines are not. PJM Interconnection, L.L.C. January 21, 2022 Transmittal at 9 (“To avoid the need to seek potential future waivers for unforeseen circumstances that may necessitate slight changes to the auction dates in the future, PJM is proposing only the month and year of the impacted auctions and not the specific date of the auction in this filing. This will provide some flexibility for PJM to make minor adjustments to the actual auction date as necessary. In fact, this approach is consistent with the existing Tariff requirement that only specifies the BRA must be held in the month of May without mandating a specific date.”) (citing PJM Open Access Transmission Tariff, Attach. DD, § 5.4(a)).
[3] See PUCO January 31, 2022 Comments at 5-6 (explaining that PUCO’s Standard Service Offer auctions cannot occur until after PJM’s BRA has been conducted, once the wholesale capacity price is known).
[4] Id. at 6.
[5] See, e.g., September 29, 2021 Notice of Filing Taking Effect by Operation of Law, Docket No. ER21-2582-000; see also Statement of Commissioner James P. Danly, Docket No. ER21-2582-000 (Oct. 27, 2021) (opposing the evisceration of the Minimum Offer Price Rule); PJM Interconnection, L.L.C., 178 FERC ¶ 61,020 (2022) (Danly, Comm’r, dissenting) (opposing elimination of 10 percent adder in modeling energy market offers); PJM Interconnection, L.L.C., 177 FERC ¶ 61,209 (2021) (Danly, Comm’r, dissenting) (opposing reversal of recently approved reserve market reforms); Indep. Mkt. Monitor for PJM v. PJM Interconnection, L.L.C., 176 FERC ¶ 61,137 (2021) (Danly, Comm’r, dissenting), reh’g denied, 178 FERC ¶ 61,121 (2022) (Danly, Comm’r, dissenting) (opposing unit-specific mitigation review of all seller capacity offers).
[6] See PJM Interconnection, L.L.C. September 10, 2021 Transmittal, Docket No. EL19-47-000, et al.; PJM Interconnection, L.L.C. July 30, 2021 Transmittal, Docket No. ER21-2582-000.
[7] PJM Interconnection, L.L.C. January 21, 2022 Transmittal at 6, 12.
[8] Id. at 2.
[9] See id., Attach. A at 1.