Revenue Adequacy. 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. Total net FTR auction revenue for the 2016/2017 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 planning period, total net FTR auction revenue was $598.3 million. Table 13-7 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 planning period and the first ten months of the 2017/2018 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 Table 13-7 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 and 2017/2018 Auction Revenue Figure 13-2 shows the monthly auction revenue collected each month from FTR auctions above ARR target allocations from the 2011/2012 through 2017/2018 planning periods. Beginning with the 2014/2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. Figure 13-2 Monthly additional ARR revenue: Planning periods 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net FTR auction revenue for the 2016/2017 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 planning period, total net FTR auction revenue was $598.3 558.4 million. Table 13-7 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 planning period and the first ten four months of the 2017/2018 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 Table 13-7 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 and 2017/2018 Auction Revenue Figure 13-2 shows the monthly auction revenue collected each month from FTR auctions above ARR target allocations from the 2011/2012 through 2017/2018 planning periods. Beginning with the 2014/2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All 2016/2017* 2017/2018** Total FTR auction net revenue should be distributed to ARR holders. Figure 13-2 $941.5 $558.4 Annual FTR Auction net revenue $909.0 $542.2 Monthly additional ARR Balance of Planning Period FTR Auction net revenue: Planning periods 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 * $12,000,000 32.5 $10,000,000 Re e $8,000,000 16.2 ARR target allocations $914.2 $561.1 venu 550.4 ARR credits $914.2 $561.1 $6,000,000 550.4 Surplus auction revenue $46.9 27.4 $37.2 xcess 8.0 ARR payout ratio 100 100 E 100% 100% FTR payout ratio* 100 100 $4,000,000 100% 100% * Shows twelve months for 2016/2017 ** Shows ten four months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct DecFigure 13-2 shows the dollars per ARR MW held for each month of the 2010/2011 planning period through the first four months of the 2017/2018 planning periods. The ARR MW held do not include self scheduled FTRs but do include Residual ARRs starting in August 2012. FTR prices increased in the 2014/2015 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net ARR holders received $968.1 million in credits from the FTR auction revenue for auctions during the 2016/2017 15/16 planning period, period before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 first 10 months of the 16/17 planning period, total net FTR auction revenue was ARR holders received $598.3 million940.3 million in ARR credits. Table 13-7 6 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 15/16 planning period and the first ten 10 months of the 2017/2018 16/17 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 Table 13-7 6 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 15/16 and 16/17 2015/2016 2016/2017 Total FTR auction net revenue $968.1 $940.3 Annual FTR Auction net revenue $936.3 $909.0 Monthly Balance of Planning Period FTR Auction net revenue* $31.8 $31.3 ARR target allocations $931.6 $913.8 ARR credits $931.6 $913.8 Surplus auction revenue $36.5 $26.5 ARR payout ratio 100 100 FTR payout ratio* 100 100 * Shows twelve months for 2015/2016 and 2017/2018 Auction Revenue ten months for 2016/2017. Figure 13-2 shows the dollars per ARR MW held for each month of the 10/11 planning period through the first 10 months of the 16/17 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 14/15 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 14/15 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the 15/16 planning period, the dollars per MW of ARR allocation was $10,641.54. For the first 10 months of the 16/17 planning period, the dollars per MW of ARR allocation were $9,337.48 down from $9,608.25 in the first 10 months of the 15/16 planning period. Total dollars per MW were down slightly in the 16/17 planning period due to increased Stage 1B and Stage 2 ARR volume. Figure 13-2 Dollars per ARR MW paid to ARR holders: Planning periods 10/11 through 16/17 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 $2,000 $1,800 $1,600 $1,400 $/ARR MW $1,200 $1,000 $800 $600 $400 $200 $0 Excess Auction Revenue Figure 13-3 shows the monthly excess auction revenue from the 11/12 through 15/16 planning periods. Excess auction revenue is the revenue collected each month from FTR auctions above in excess of ARR target allocations from the 2011/2012 through 2017/2018 planning periodsallocations. Beginning with the 2014/2015 14/15 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 adequate.19 This allows PJM to use the excess auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. Figure 13-2 Monthly additional ARR revenue: Planning periods 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Decin
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net 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 auction revenue for auctions during the 2016/2017 2014 to 2015 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 2014 to 2015 planning period, total net FTR auction revenue was ARR holders received $598.3 million735.3 million in ARR credits. Table 13-7 25 lists projected ARR target allocations from the Annual ARR Allocation Allocation, and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2014 to 2015 planning period and the first ten months of the 2017/2018 2015 to 2016 planning periods. 2016/2017* 2017/2018** Total As seen here, due to decreased FTR volume leading to increased FTR nodal prices, auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 increased 24.5 percent while projected ARR target allocations increased 26.1 percent from the previous planning period. Table 13-7 13‑25 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 2013 to 2014 and 2017/2018 2014 to 2015 2014/2015 2015/2016 Total FTR auction net revenue $767.9 $956.2 Annual FTR Auction Revenue net revenue $748.6 $936.3 Monthly Balance of Planning Period FTR Auction net revenue* $19.3 $20.0 ARR target allocations $735.3 $927.0 ARR credits $735.3 $927.0 Surplus auction revenue $32.6 $29.3 ARR payout ratio 100% 100% FTR payout ratio* 100% 100% * Shows twelve months for 2014/2015 and four months for 2015/2016. Figure 13-2 16 shows the monthly auction revenue collected dollars per ARR MW held for each month from FTR auctions above ARR target allocations from of the 2011/2012 2010 to 2011 through 2017/2018 2015 to 2016 planning periods. Beginning with The ARR MW held do not include self scheduled FTRs and do include Residual ARRs starting in August 2012. FTR prices increased in the 2014/2015 2014 to 2015 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices result in an increase in dollars paid per ARR MW. For the 2014 to 2015 planning period, market rules allow PJM the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to decrease prevailing flow target the ARRs awarded in the annual process because residual ARR allocations by clearing counter flow change each month and cannot be self scheduled as FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM . Figure 13‑16 Dollars per ARR MW paid to use auction revenue ARR holders: Planning periods 2010 to pay prevailing flow FTRs without 2011 through 2015 to 2016 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 $2,000 $1,800 $1,600 $1,400 $1,200 increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the excess ARR revenue stream and caused the large decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra auction Currently, excess ARR revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. Figure 13-2 Monthly additional 13‑17 Excess ARR revenue: Planning periods 2011/2012 2011 to 2012 through 2017/2018 2015 to 2016 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e Excess Revenue $8,000,000 ARR target allocations $914.2 /ARR MW $561.1 venu ARR credits 1,000 $914.2 $561.1 800 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 600 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $400 $200 $2,000,000 $- 0 June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec$- Excess ARR Revenue Figure 13-17 shows the monthly excess ARR revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess ARR revenue is the revenue collected each month from FTR auctions in excess of ARR target allocations after PJM’s implemented counter flow FTR clearing process. Beginning with the 2014 to 2015 planning period, market rules allow PJM to lower facility limits by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate. This allows PJM to use the excess ARR revenue to pay prevailing flow FTRs without ARR and FTR Revenue and Congestion Effectiveness of ARRs and FTRs as an Offset to Congestion Table 13-26 compares the revenue for ARR and FTR holders and the congestion in both the Day-Ahead Energy Market and the balancing energy market for the 2014 to 2015 and the first four months of the 2015 to 2016 planning period. This compares the total offset provided by all ARRs and all FTRs to the total congestion costs. ARR credits are calculated as the product of the ARR MW and the cleared price of the ARR path from the Annual FTR Auction. The “FTR Credits” column represents the total FTR target allocation for FTRs from the Long Term FTR Auction, Annual FTR Auction, the Monthly Balance of Planning Period FTR Auctions, and any FTRs that were self scheduled from ARRs, adjusted by the FTR payout ratio. The FTR target allocation is equal to the product of the FTR MW and congestion price differences between sink and source that occur in the Day-Ahead Energy Market. FTR credits are the product of the FTR target allocations and the FTR payout ratio. The FTR payout ratio was 100 percent of the target allocation for the 2014 to 2015 and 2015 to 2016 planning periods. The “FTR Auction Revenue” column shows the amount paid for FTRs from the Long Term FTR Auction, the Annual FTR Auction, the Monthly Balance of Planning Period FTR Auctions and any ARRs that were self scheduled as FTRs. ARR holders that self schedule FTRs purchased the FTRs in the Annual FTR Auction and that revenue was then paid back to those ARR holders through ARR credits on a monthly basis throughout the planning period, ultimately netting the transaction to zero. The total ARR and FTR offset is the sum of the ARR credits and the FTR credits minus the FTR auction revenue. The “Congestion” column shows the total amount of congestion in the Day-Ahead Energy Market and the balancing energy market. The last column shows the difference between the total ARR and FTR offset and the congestion cost. Table 13-26 shows the total offset due to ARRs and FTRs for the entire 2014 to 2015 and first four months of the 2015 to 2016 planning periods. ARRs and FTRs served as an effective, but not total, offset against congestion. ARR and FTR revenues offset 82.1 percent of the total congestion costs in the Day-Ahead Energy Market and the balancing energy market within PJM for the first four months of the 2015 to 2016 planning period. In the 2014 to 2015 planning period, total ARR and FTR revenues offset 88.3 percent of the congestion costs. Table 13‑26 ARR and FTR congestion offset (in millions): Planning periods 2014 to 2015 and 2015 to 201632 Planning Period ARR Credits FTR Credits FTR Auction Revenue Total ARR and FTR Offset Congestion Total Offset ‑ Congestion Difference Percent Offset 2014/2015 $761.3 $1,261.8 $794.9 $1,228.2 $1,390.3 ($162.1) 88.3% 2015/2016* $322.3 $275.2 $325.8 $271.7 $330.97 ($59.3) 82.1% * Shows four months through September 30, 2015
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net 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 auction revenue for auctions during the 2016/2017 2014 to 2015 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 2014 to 2015 planning period, total net FTR auction revenue was ARR holders received $598.3 million735.3 million in ARR credits. Table 13-7 10 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2014 to 2015 planning period and the first ten months of the 2017/2018 2015 to 2016 planning periods. 2016/2017* 2017/2018** Total As seen here, due to decreased FTR volume leading to increased FTR nodal prices, auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 increased 24.5 percent while projected ARR target allocations increased 26.1 percent from the previous planning period. Table 13-7 10 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 2014 to 2015 and 2017/2018 2015 to 2016 2014/ 2015 2015/ 2016 Total FTR auction net revenue $767.9 $962.0 Annual FTR Auction Revenue net revenue $748.6 $936.3 Monthly Balance of Planning Period FTR Auction net revenue* $19.3 $25.8 ARR target allocations $735.3 $928.8 ARR credits $735.3 $928.8 Surplus auction revenue $32.6 $33.2 ARR payout ratio 100 100 FTR payout ratio* 100 100 * Shows twelve months for 2014/2015 and seven months for 2015/2016. Figure 13-2 4 shows the monthly auction revenue collected dollars per ARR MW held for each month from FTR auctions above ARR target allocations from of the 2011/2012 2010 to 2011 through 2017/2018 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 supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 2014 to 2015 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the first seven months of the 2015 to 2016 planning period, the dollars per MW of ARR allocation was $7,739.36. Figure 13-4 Dollars per ARR MW paid to ARR holders: Planning periods 2010 to 2011 through 2015 to 2016 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 $2,000 These increased facility limits must be carried over into the FTR auctions, which results in an over selling of FTR MW. Beginning with the 2014/2015 2014 to 2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 adequate. This allows PJM to use auction the excess ARR revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the excess ARR revenue stream and caused the large decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra Currently, excess FTR auction revenue is allocated pro rata to FTR Holders holders at the end of the planning period. All FTR auction revenue should be , instead of being distributed to ARR holders. Figure 13-2 5 Monthly additional excess ARR revenue: Planning periods 2011/2012 2011 to 2012 through 2017/2018 2015 to 2016 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e Excess Revenue $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 1,800 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $1,600 $1,400 $2,000,000 $- 1,200 $/ARR MW June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec$- $1,000 $800 $600 $400 $200 $0 Excess ARR Revenue Figure 13-5 shows the monthly excess ARR revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess ARR revenue is the revenue collected each month from FTR auctions in excess of ARR target allocations after PJM’s implemented counter flow FTR clearing process. Stage 1A ARRs may be over allocated in the initial Stage 1A process, which requires that facility limits are increased above their actual capability. Financial Transmission Rights FTRs are financial instruments that entitle their holders to receive revenue or require them to pay charges based on locational congestion price differences in the Day- Ahead Energy Market across specific FTR transmission paths, subject to revenue availability. This value, termed the FTR target allocation, defines the maximum, but not guaranteed, payout for FTRs. The target allocation of an FTR reflects the difference in congestion prices rather than the difference in LMPs, which includes both congestion and marginal losses. Auction market participants are free to request FTRs between any eligible pricing nodes on the system. For the Long Term FTR Auction a list of available hubs,
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net ARR holders received $968.1 million in credits from the FTR auction revenue for auctions during the 2016/2017 2015 to 2016 planning period, period before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 first seven months of the 2016 to 2017 planning period, total net FTR auction revenue was ARR holders received $598.3 million935.7 million in ARR credits. Table 13-7 12 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2015 to 2016 planning period and the first ten seven months of the 2017/2018 2016 to 2017 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 Table 13-7 12 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2015 to 2016 and 2016 to 2017 2015/ 2016 2016/ 2017 Total FTR auction net revenue $968.1 $935.7 Annual FTR Auction net revenue $936.3 $909.0 Monthly Balance of Planning Period FTR Auction net revenue* $31.8 $26.7 ARR target allocations $931.6 $911.4 ARR credits $931.6 $911.4 Surplus auction revenue $36.5 $24.3 ARR payout ratio 100 100 FTR payout ratio* 100 100 * Shows twelve months for 2015/2016 and seven months for 2016/2017. Figure 13-4 shows the dollars per ARR MW held for each month of the 2010 to 2011 planning period through the first seven months of the 2016 to 2017 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 supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 2014 to 2015 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the 2015 to 2016 planning period, the dollars per MW of ARR allocation was $10,641.54. For the first seven months of the 2016 to 2017 planning period, the dollars per MW of ARR allocation were $7,180.49 down from $7,739.36 in the first seven months of the 2015 to 2016 planning period. Total dollars per MW were down slightly in the 2016 to 2017 planning period due to increased Stage 1B and Stage 2 ARR volume. 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 Figure 13-4 Dollars per ARR MW paid to ARR holders: Planning periods 2010 to 2011 through 2016 to 2017 allows PJM to use the excess auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and 2017/2018 caused the decrease in excess ARR revenue beginning in June 2014. Excess auction revenue is allocated pro rata to FTR holders at the end of the planning period, instead of being distributed to ARR holders. Figure 13-5 Monthly excess ARR revenue: Planning periods 2011 to 2012 through 2016 to 2017 11/12 12/13 13/14 14/15 15/16 16/17 $12,000,000 $10,000,000 Excess Revenue $8,000,000 $6,000,000 $4,000,000 $2,000 $1,800 $2,000,000 June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec $1,600 $- $1,400 $/ARR MW $1,200 $1,000 $800 $600 $400 $200 $0 Excess Auction Revenue Figure 13-2 5 shows the monthly excess auction revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess auction revenue is the revenue collected each month from FTR auctions above in excess of ARR target allocations from the 2011/2012 through 2017/2018 planning periodsallocations. Beginning with the 2014/2015 2014 to 2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use Table 13-13 shows the excess auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the revenue, by planning period, for planning periods 2010 to 2011 through 2016 to 2017. All FTR auction revenue should be distributed to ARR holders. Figure Table 13-2 Monthly additional ARR revenue13 Excess Auction Revenue: Planning periods 2010 to 2011 through 2016 to 2017 Planning Period Excess Auction Revenue 2010/2011 $29,704,562 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 80,083,695 2012/2013 $10,000,000 Re e 66,652,822 2013/2014 $8,000,000 ARR target allocations 71,687,937 2014/2015* $914.2 29,045,590 2015/2016 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 29,612,591 2016/2017** Shows ten months $12,093,742 Total $318,880,939 *Start of counter flow “buy back” **Through December 31, 2016 22 See PJM. “Manual 6: Financial Transmission Rights” Revision 17 (June 1, 2016), p. 55. Financial Transmission Rights FTRs are financial instruments that entitle their holders to receive revenue or require them to pay charges based on locational congestion price differences in the Day- Ahead Energy Market across specific FTR transmission paths, subject to total congestion revenue including day-ahead and balancing congestion. The value of the day-ahead congestion price differences, termed the FTR target allocation, defines the maximum, but not guaranteed, payout for 2017/2018FTRs. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct DecThe target allocation of an FTR reflects the difference in day-ahead congestion prices rather than the difference in LMPs, which includes both congestion and marginal losses.
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net 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 $568.8 million in credits from the FTR auction revenue for auctions during the 2016/2017 2013 to 2014 planning period. During the 2013 to 2014 planning period, before accounting for self scheduling, load shifts or residual ARRs, was ARR holders received $941.5 million. The FTR auction revenue collected pays 506.2 million in ARR holders’ credits. During the 2017/2018 planning period, total net FTR auction revenue was $598.3 million. Table 13-7 31 lists projected ARR target allocations from the Annual ARR Allocation Allocation, and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2012 to 2013 planning period and the first ten months of the 2017/2018 2013 to 2014 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 50 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 - 13/14 14/15 Table 13-7 13‑32 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 2012 to 2013 and 2017/2018 Auction Revenue Figure 13-2 shows the monthly auction revenue collected each month from FTR auctions above ARR target allocations from the 2011/2012 through 2017/2018 planning periods. Beginning with the 2014/2015 planning period, market rules allow PJM 2013 to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All 2014 2012/2013 2013/2014 Total FTR auction net revenue should be distributed to ARR holders. Figure 13-2 $626.7 $568.8 Annual FTR Auction net revenue $602.9 $558.4 Monthly additional ARR revenue: Balance of Planning periods 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Period FTR Auction net revenue $12,000,000 23.9 $10,000,000 Re e $8,000,000 10.4 ARR target allocations $914.2 570.5 $561.1 venu 506.2 ARR credits $914.2 570.5 $561.1 $6,000,000 506.2 Surplus auction revenue $46.9 56.2 $37.2 xcess 62.6 ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months ratio 67.8 72.8 ARR and FTR Revenue and Congestion FTR Prices and Zonal Price Differences As an illustration of the relationship between FTRs and congestion, Figure 13-18 shows Annual FTR Auction prices and an approximate measure of day- ahead and real-time congestion for 2016/2017 ** Shows ten months each PJM control zone for 2017/2018the 2013 to 2014 planning period. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct DecThe day-ahead and real-time congestion are based on the difference between zonal congestion prices and Western Hub congestion prices.
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net ARR holders received $968.1 million in credits from the FTR auction revenue for auctions during the 2016/2017 15/16 planning period, period before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 first 10 months of the 16/17 planning period, total net FTR auction revenue was ARR holders received $598.3 million940.3 million in ARR credits. Table 13-7 6 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 15/16 planning period and the first ten 10 months of the 2017/2018 16/17 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 Table 13-7 6 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 15/16 and 16/17 2015/2016 2016/2017 Total FTR auction net revenue $968.1 $940.3 Annual FTR Auction net revenue $936.3 $909.0 Monthly Balance of Planning Period FTR Auction net revenue* $31.8 $31.3 ARR target allocations $931.6 $913.8 ARR credits $931.6 $913.8 Surplus auction revenue $36.5 $26.5 ARR payout ratio 100% 100% FTR payout ratio* 100% 100% * Shows twelve months for 2015/2016 and 2017/2018 Auction Revenue ten months for 2016/2017. Figure 13-2 shows the dollars per ARR MW held for each month of the 10/11 planning period through the first 10 months of the 16/17 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 14/15 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 14/15 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the 15/16 planning period, the dollars per MW of ARR allocation was $10,641.54. For the first 10 months of the 16/17 planning period, the dollars per MW of ARR allocation were $9,337.48 down from $9,608.25 in the first 10 months of the 15/16 planning period. Total dollars per MW were down slightly in the 16/17 planning period due to increased Stage 1B and Stage 2 ARR volume. Figure 13-2 Dollars per ARR MW paid to ARR holders: Planning periods 10/11 through 16/17 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 $2,000 $1,800 $1,600 $1,400 $/ARR MW $1,200 $1,000 $800 $600 $400 $200 $0 Excess Auction Revenue Figure 13-3 shows the monthly excess auction revenue from the 11/12 through 15/16 planning periods. Excess auction revenue is the revenue collected each month from FTR auctions above in excess of ARR target allocations from the 2011/2012 through 2017/2018 planning periodsallocations. Beginning with the 2014/2015 14/15 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 adequate.19 This allows PJM to use the excess auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. Figure 13-2 Monthly additional ARR revenue: Planning periods 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Decin
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net 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 $568.8 million in credits from the FTR auction revenue for auctions during the 2016/2017 2013 to 2014 planning period. During the 2013 to 2014 planning period, before accounting for self scheduling, load shifts or residual ARRs, was ARR holders received $941.5 million. The FTR auction revenue collected pays 506.2 million in ARR holders’ credits. During the 2017/2018 planning period, total net FTR auction revenue was $598.3 million. Table 13-7 31 lists projected ARR target allocations from the Annual ARR Allocation Allocation, and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2012 to 2013 planning period and the first ten months of the 2017/2018 2013 to 2014 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 50 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 - 13/14 14/15 Table 13-7 13‑32 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 2012 to 2013 and 2017/2018 Auction Revenue Figure 13-2 shows the monthly auction revenue collected each month from FTR auctions above ARR target allocations from the 2011/2012 through 2017/2018 planning periods. Beginning with the 2014/2015 planning period, market rules allow PJM 2013 to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All 2014 2012/2013 2013/2014 Total FTR auction net revenue should be distributed to ARR holders. Figure 13-2 $626.7 $568.8 Annual FTR Auction net revenue $602.9 $558.4 Monthly additional ARR revenue: Balance of Planning periods 2011/2012 through 2017/2018 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Period FTR Auction net revenue $12,000,000 23.9 $10,000,000 Re e $8,000,000 10.4 ARR target allocations $914.2 570.5 $561.1 venu 506.2 ARR credits $914.2 570.5 $561.1 $6,000,000 506.2 Surplus auction revenue $46.9 56.2 $37.2 xcess 62.6 ARR payout ratio 100 100 E 100% 100% FTR payout ratio* 100 100 $4,000,000 * Shows twelve months ratio 67.8% 72.8% ARR and FTR Revenue and Congestion FTR Prices and Zonal Price Differences As an illustration of the relationship between FTRs and congestion, Figure 13-18 shows Annual FTR Auction prices and an approximate measure of day- ahead and real-time congestion for 2016/2017 ** Shows ten months each PJM control zone for 2017/2018the 2013 to 2014 planning period. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct DecThe day-ahead and real-time congestion are based on the difference between zonal congestion prices and Western Hub congestion prices.
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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 Figure 13-3 shows a map of over allocated ARR source points in Stage 1A, regardless of reason, for the 2013 to 2014 through 2016 to 2017 planning periods. The year indicated for each source point is the latest year that source was announced as over allocated in the Stage 1A process. Generators retired as of the 2016 to 2017 planning period are indicated by a square marker to revenue adequate for every auction to date. Customers that self schedule ARRs as FTRs have the same revenue adequacy characteristics as all other FTRs. Total net 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 auction revenue for auctions during the 2016/2017 2014 to 2015 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 2014 to 2015 planning period, total net FTR auction revenue was ARR holders received $598.3 million735.3 million in ARR credits. Table 13-7 10 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2014 to 2015 planning period and the first ten months of the 2017/2018 2015 to 2016 planning periods. 2016/2017* 2017/2018** Total As seen here, due to decreased FTR volume leading to increased FTR nodal prices, total auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 increased 26.1 percent while projected ARR target allocations increased 26.7 percent from the previous planning period. Table 13-7 13‑10 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2014 to 2015 and 2015 to 2016 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the 2015 to 2016 planning period, the dollars per MW of ARR allocation was $10,641.54. Total dollars per MW was down slightly in the 2016 to 2017 planning period due to increased Stage 1B and Stage 2 ARR volume. Figure 13‑4 Dollars per ARR MW paid to ARR holders: Planning periods 2010 to 2011 through 2016 to 2017 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 $2,000 $1,800 $1,600 R M $1,400 2014/2015 2015/2016 Total FTR auction net revenue $767.9 $968.1 $1,200 Annual FTR Auction net revenue $748.6 $936.3 W Monthly Balance of Planning Period FTR Auction net revenue* $19.3 $31.8 $1,000 ARR target allocations $735.3 $931.6 $/AR ARR credits $735.3 $931.6 $800 Surplus auction revenue $32.6 $36.5 ARR payout ratio 100 100 $600 FTR payout ratio* 100 100 * Shows twelve months for 2014/2015 and 2017/2018 2015/2016. $400 Figure 13-4 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 supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 2014 to 2015 $200 $0 Excess ARR Revenue Figure 13-2 5 shows the monthly auction excess ARR revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess ARR revenue is the revenue collected each month from FTR auctions above in excess of ARR target allocations from after PJM’s implemented counter flow FTR clearing process. Stage 1A ARRs may be over allocated in the 2011/2012 through 2017/2018 planning periodsinitial Stage 1A process, which requires that facility limits are increased above their actual capability. These increased facility limits must be carried over into the FTR auctions, which results in an over selling of FTR MW. Beginning with the 2014/2015 2014 to 2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 adequate. This allows PJM to use auction the excess ARR revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the excess ARR revenue stream and caused the large decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra Currently, excess FTR auction revenue is allocated pro rata to FTR Holders holders at the end of the planning period. All FTR auction revenue should be , instead of being distributed to ARR holders. Figure 13-2 13‑5 Monthly additional excess ARR revenue: Planning periods 2011/2012 2011 to 2012 through 2017/2018 2016 to 2017 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e Excess Revenue $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec$- Financial Transmission Rights FTRs are financial instruments that entitle their holders to receive revenue or require them to pay charges based on locational congestion price differences in the Day-Ahead Energy Market across specific FTR transmission paths, subject to revenue availability. This value, termed the FTR target allocation, defines the maximum, but not guaranteed, payout for FTRs. The target allocation of an FTR reflects the difference in congestion prices rather than the difference in LMPs, which includes both congestion and marginal losses. Auction market participants are free to request FTRs between any eligible pricing nodes on the system. For the Long Term FTR Auction a list of available hubs, control zones, aggregates, generator buses and interface pricing points is available. For the Annual FTR Auction and FTRs bought for a quarterly
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net 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 auction revenue for auctions during the 2016/2017 2014 to 2015 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 2014 to 2015 planning period, total net FTR auction revenue was ARR holders received $598.3 million735.3 million in ARR credits. Table 13-7 10 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2014 to 2015 planning period and the first ten months of the 2017/2018 2015 to 2016 planning periods. 2016/2017* 2017/2018** Total As seen here, due to decreased FTR volume leading to increased FTR nodal prices, auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 increased 24.5 percent while projected ARR target allocations increased 26.1 percent from the previous planning period. Table 13-7 10 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 2014 to 2015 and 2017/2018 2015 to 2016 2014/ 2015 2015/ 2016 Total FTR auction net revenue $767.9 $962.0 Annual FTR Auction Revenue net revenue $748.6 $936.3 Monthly Balance of Planning Period FTR Auction net revenue* $19.3 $25.8 ARR target allocations $735.3 $928.8 ARR credits $735.3 $928.8 Surplus auction revenue $32.6 $33.2 ARR payout ratio 100% 100% FTR payout ratio* 100% 100% * Shows twelve months for 2014/2015 and seven months for 2015/2016. Figure 13-2 4 shows the monthly auction revenue collected dollars per ARR MW held for each month from FTR auctions above ARR target allocations from of the 2011/2012 2010 to 2011 through 2017/2018 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 supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 2014 to 2015 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the first seven months of the 2015 to 2016 planning period, the dollars per MW of ARR allocation was $7,739.36. Figure 13-4 Dollars per ARR MW paid to ARR holders: Planning periods 2010 to 2011 through 2015 to 2016 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 $2,000 These increased facility limits must be carried over into the FTR auctions, which results in an over selling of FTR MW. Beginning with the 2014/2015 2014 to 2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 adequate. This allows PJM to use auction the excess ARR revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the excess ARR revenue stream and caused the large decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra Currently, excess FTR auction revenue is allocated pro rata to FTR Holders holders at the end of the planning period. All FTR auction revenue should be , instead of being distributed to ARR holders. Figure 13-2 5 Monthly additional excess ARR revenue: Planning periods 2011/2012 2011 to 2012 through 2017/2018 2015 to 2016 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e Excess Revenue $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 1,800 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $1,600 $1,400 $2,000,000 $- 1,200 $/ARR MW June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec$- $1,000 $800 $600 $400 $200 $0 Excess ARR Revenue Figure 13-5 shows the monthly excess ARR revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess ARR revenue is the revenue collected each month from FTR auctions in excess of ARR target allocations after PJM’s implemented counter flow FTR clearing process. Stage 1A ARRs may be over allocated in the initial Stage 1A process, which requires that facility limits are increased above their actual capability. Financial Transmission Rights FTRs are financial instruments that entitle their holders to receive revenue or require them to pay charges based on locational congestion price differences in the Day- Ahead Energy Market across specific FTR transmission paths, subject to revenue availability. This value, termed the FTR target allocation, defines the maximum, but not guaranteed, payout for FTRs. The target allocation of an FTR reflects the difference in congestion prices rather than the difference in LMPs, which includes both congestion and marginal losses. Auction market participants are free to request FTRs between any eligible pricing nodes on the system. For the Long Term FTR Auction a list of available hubs,
Appears in 1 contract
Samples: www.monitoringanalytics.com
Revenue Adequacy. Revenue 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. Total net 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 auction revenue for auctions during the 2016/2017 2014 to 2015 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 2014 to 2015 planning period, total net FTR auction revenue was ARR holders received $598.3 million735.3 million in ARR credits. Table 13-7 25 lists projected ARR target allocations from the Annual ARR Allocation Allocation, and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2014 to 2015 planning period and the first ten months of the 2017/2018 2015 to 2016 planning periods. 2016/2017* 2017/2018** Total As seen here, due to decreased FTR volume leading to increased FTR nodal prices, auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 increased 24.5 percent while projected ARR target allocations increased 26.1 percent from the previous planning period. Table 13-7 13‑25 Projected ARR revenue adequacy (Dollars (Millions)): Planning periods 2016/2017 2013 to 2014 and 2017/2018 2014 to 2015 2014/2015 2015/2016 Total FTR auction net revenue $767.9 $956.2 Annual FTR Auction Revenue net revenue $748.6 $936.3 Monthly Balance of Planning Period FTR Auction net revenue* $19.3 $20.0 ARR target allocations $735.3 $927.0 ARR credits $735.3 $927.0 Surplus auction revenue $32.6 $29.3 ARR payout ratio 100 100 FTR payout ratio* 100 100 * Shows twelve months for 2014/2015 and four months for 2015/2016. Figure 13-2 16 shows the monthly auction revenue collected dollars per ARR MW held for each month from FTR auctions above ARR target allocations from of the 2011/2012 2010 to 2011 through 2017/2018 2015 to 2016 planning periods. Beginning with The ARR MW held do not include self scheduled FTRs and do include Residual ARRs starting in August 2012. FTR prices increased in the 2014/2015 2014 to 2015 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices result in an increase in dollars paid per ARR MW. For the 2014 to 2015 planning period, market rules allow PJM the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to decrease prevailing flow target the ARRs awarded in the annual process because residual ARR allocations by clearing counter flow change each month and cannot be self scheduled as FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM . Figure 13‑16 Dollars per ARR MW paid to use auction revenue ARR holders: Planning periods 2010 to pay prevailing flow FTRs without 2011 through 2015 to 2016 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 $2,000 $1,800 $1,600 $1,400 $1,200 increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the excess ARR revenue stream and caused the large decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra auction Currently, excess ARR revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. Figure 13-2 Monthly additional 13‑17 Excess ARR revenue: Planning periods 2011/2012 2011 to 2012 through 2017/2018 2015 to 2016 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e Excess Revenue $8,000,000 ARR target allocations $914.2 /ARR MW $561.1 venu ARR credits 1,000 $914.2 $561.1 800 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 600 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $400 $200 $2,000,000 $- 0 June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec$- Excess ARR Revenue Figure 13-17 shows the monthly excess ARR revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess ARR revenue is the revenue collected each month from FTR auctions in excess of ARR target allocations after PJM’s implemented counter flow FTR clearing process. Beginning with the 2014 to 2015 planning period, market rules allow PJM to lower facility limits by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate. This allows PJM to use the excess ARR revenue to pay prevailing flow FTRs without ARR and FTR Revenue and Congestion Effectiveness of ARRs and FTRs as an Offset to Congestion Table 13-26 compares the revenue for ARR and FTR holders and the congestion in both the Day-Ahead Energy Market and the balancing energy market for the 2014 to 2015 and the first four months of the 2015 to 2016 planning period. This compares the total offset provided by all ARRs and all FTRs to the total congestion costs. ARR credits are calculated as the product of the ARR MW and the cleared price of the ARR path from the Annual FTR Auction. The “FTR Credits” column represents the total FTR target allocation for FTRs from the Long Term FTR Auction, Annual FTR Auction, the Monthly Balance of Planning Period FTR Auctions, and any FTRs that were self scheduled from ARRs, adjusted by the FTR payout ratio. The FTR target allocation is equal to the product of the FTR MW and congestion price differences between sink and source that occur in the Day-Ahead Energy Market. FTR credits are the product of the FTR target allocations and the FTR payout ratio. The FTR payout ratio was 100 percent of the target allocation for the 2014 to 2015 and 2015 to 2016 planning periods. The “FTR Auction Revenue” column shows the amount paid for FTRs from the Long Term FTR Auction, the Annual FTR Auction, the Monthly Balance of Planning Period FTR Auctions and any ARRs that were self scheduled as FTRs. ARR holders that self schedule FTRs purchased the FTRs in the Annual FTR Auction and that revenue was then paid back to those ARR holders through ARR credits on a monthly basis throughout the planning period, ultimately netting the transaction to zero. The total ARR and FTR offset is the sum of the ARR credits and the FTR credits minus the FTR auction revenue. The “Congestion” column shows the total amount of congestion in the Day-Ahead Energy Market and the balancing energy market. The last column shows the difference between the total ARR and FTR offset and the congestion cost. Table 13-26 shows the total offset due to ARRs and FTRs for the entire 2014 to 2015 and first four months of the 2015 to 2016 planning periods. ARRs and FTRs served as an effective, but not total, offset against congestion. ARR and FTR revenues offset 82.1 percent of the total congestion costs in the Day-Ahead Energy Market and the balancing energy market within PJM for the first four months of the 2015 to 2016 planning period. In the 2014 to 2015 planning period, total ARR and FTR revenues offset 88.3 percent of the congestion costs. Table 13‑26 ARR and FTR congestion offset (in millions): Planning periods 2014 to 2015 and 2015 to 201632 Planning Period ARR Credits FTR Credits FTR Auction Revenue Total ARR and FTR Offset Congestion Total Offset ‑ Congestion Difference Percent Offset 2014/2015 $761.3 $1,261.8 $794.9 $1,228.2 $1,390.3 ($162.1) 88.3 2015/2016* $322.3 $275.2 $325.8 $271.7 $330.97 ($59.3) 82.1 * Shows four months through September 30, 2015
Appears in 1 contract
Samples: www.monitoringanalytics.com
