PJM Clause Samples

PJM. The Servicer shall take all reasonable actions available under PSC Regulations or other rules or regulations to obtain timely information from PJM, if any, which is necessary for the Servicer to fulfill its obligations under the Servicing Agreement.

PJM. “Manual 6: Financial Transmission Rights,” Revision 17 (June 1, 2016), pp. 55-56. to address expected revenue issues. The simultaneous feasibility requirement is necessary to ensure that there are adequate revenues from congestion charges to satisfy all resulting ARR obligations. If the requested set of ARRs is not simultaneously feasible, customers are allocated prorated shares in direct proportion to their requested MW and in inverse proportion to their impact on binding constraints, except Stage 1A ARRs: Individual prorated MW = (Constraint capability) X (Individual requested MW / Total requested MW) X (1 / MW effect on line).14 The effect of an ARR request on a binding constraint is measured using the ARR’s power flow distribution factor. An ARR’s distribution factor is the percent of each requested MW of ARR that would have a power flow on the binding constraint. The PJM methodology prorates ARR requests in proportion to their MW value and the impact on the binding constraint. PJM’s method results in the prorating only of ARRs that cause the greatest flows on the binding constraint. Were all ARR requests prorated equally, regardless of their proportional impact on the binding constraints, the result would be a significant reduction in market participants’ ARRs. Table 13-3 shows the top 10 principal binding transmission constraints that limited the 2015 to 2016 ARR Stage 1A allocation. PJM was required to increase capability limits for several facilities in order to make the ARR allocation feasible.15 Breed - Wheatland Flowgate MISO Wheatland - Petersburg Flowgate MISO Wempletown Transformer ComEd ▇▇▇▇▇▇ - Electric Junction Flowgate MISO Cherry Valley - Silverlake Flowgate MISO Pana North Flowgate MISO ▇▇▇▇▇▇ - ▇▇▇▇▇▇▇ Line ComEd Pana North Flowgate MISO Cherry Valley Transformer ComEd Pontiac Midpoint - Wilton Ctr. Flowgate ComEd ▇▇▇▇ ordered PJM to more accurately represent system usage when allocating Stage 1A ARRs by removing retired resources from their allocation methodology.16 PJM made a compliance filing, accepted by FERC, stating that retired units would be replaced with qualified replacement resources (QRRs).17 PJM proposed to categorize QRRs as built under a rate base approach or a non-rate base (market) approach. PJM proposed to give priority to load delivery from their own rate based units in deciding between competing ARR claims. Under the new allocation methodology, PJM will replace retired units or units whose ICAP is less than their hi...

PJM. Sellers shall cooperate in good faith with Purchaser in furtherance of the changes to the PJM registration required to reflect the transactions contemplated by this Agreement.

PJM. “Manual 6: Financial Transmission Rights,” Revision 16 (June 1, 2014), p22. 15 PJM 2015/2016 Stage 1A Over allocation notice, PJM FTRs, <▇▇▇▇://▇▇▇.▇▇▇.▇▇▇/~/media/markets-ops/ftr/annual-arr-allocation/2015- 2016/2015-2016-stage-1a-over-allocation-notice.ashx> (March 5, 2015). As with FTRs, revenue adequacy for ARRs must be distinguished from the adequacy of ARRs as an offset to total congestion. Revenue adequacy is a narrower concept that compares the revenues available to ARR holders to the value of ARRs as determined in the Annual FTR Auction. ARRs have been revenue adequate for every auction to date. Customers that self schedule ARRs as FTRs have the same revenue adequacy characteristics as all other FTRs. The adequacy of ARRs as an offset to total congestion compares ARR revenues to total congestion sinking in the participant’s load zone as a measure of the extent to which ARRs offset market participants’ actual, total congestion into their zone. Customers that self schedule ARRs as FTRs provide the same offset to congestion as all other FTRs. ARR holders received a projected $767.9 million in credits from the FTR auctions during the 2014 to 2015 planning period. The FTR auction revenue collected pays ARR holders’ credits. During the 2014 to 2015 planning period, ARR holders received $735.3 million in ARR credits. Table 13-8 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Annual and Monthly Balance of Planning Period FTR Auctions for the 2014 to 2015 planning period and the 2015 to 2016 planning periods. As seen here, due to decreased FTR volume leading to increased FTR nodal prices, auction revenue increased 26.0 percent while projected ARR target allocations increased 26.6 percent from the previous planning period. Total FTR auction net revenue $767.9 $967.4 Annual FTR Auction net revenue $748.6 $936.3 Monthly Balance of Planning Period FTR Auction net revenue* $19.3 $31.1 ARR target allocations $735.3 $930.7 ARR credits $735.3 $930.7 Surplus auction revenue $32.6 $36.7 ARR payout ratio 100% 100% FTR payout ratio* 100% 100% * Shows twelve months for 2014/2015 and ten months for 2015/2016. Figure 13-2 shows the dollars per ARR MW held for each month of the 2010 to 2011 through 2015 to 2016 planning periods. The ARR MW held do not include self-scheduled FTRs and do include Residual ARRs starting in August 2012. FTR prices increased in the 2014 to 2015 Annual FTR Auction as a result of reduced supp...

PJM. “Manual 6: Financial Transmission Rights,” Revision 16 (June 1, 2014), pp. 55-56. 12 See the MMU Technical Reference for PJM Markets, at “Financial Transmission Rights and Auction Revenue Rights,” for an illustration explaining this calculation in greater detail. <▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/reports/Technical_References/references.shtml>. For the entire 2014 to 2015 and 2015 to 2016 planning periods, FTR revenue adequacy was over 100 percent. Not every month was revenue adequate, but there was excess revenue from other months to make each month revenue adequate. The last time there were four months of consecutive funding of 100 percent or more was in the 2009 to 2010 planning period. This high level of revenue adequacy was primarily due to actions taken by PJM to address prior low levels of revenue adequacy. PJM’s actions included PJM’s arbitrary assumption of higher outage levels and PJM’s decision to include additional constraints (closed loop interfaces) both of which reduced system capability in the FTR auction model. PJM’s actions led to a significant reduction in the allocation of Stage 1B and Stage 2 ARRs. While PJM’s approach to outages in the Annual FTR Auction reduces revenue inadequacy, which was caused in part by Stage 1A ARR overallocations, it does not address the Stage 1A ARR overallocation issue directly, and has resulted in decreased Stage 1B ARR allocations through proration, decreased Stage 2 ARR allocations through proration and decreased FTR capability. Stage 1A ARRs were not affected by PJM’s assumption of increased outages because they may not be prorated.

PJM. The Pennsylvania-New Jersey-Maryland Interconnection, LLC.