E9-12214. PJM Interconnection L.L.C.; Notice of Filings

May 19, 2009.

On March 26, 2009, the Commission issued an order accepting new tariff provisions relating to PJM Interconnection, L.L.C. (PJM's) Reliability Pricing Model (RPM) capacity market, including changes to the procedures governing Incremental Auctions that became effective March 27, 2009.^[1] One such revision was to the table of default Avoidable Cost Rate (ACR) values for the Base Residual Auction and three subsequent Incremental Auctions that PJM administers for each Delivery Year. Capacity suppliers who fail the market power test may use these ACR values as default bids when they offer capacity into the Incremental Auctions.

On April 29, 2009, the PJM Market Monitor filed a letter to the Commission stating that, due to an oversight on its part, it believes the ACR values contained in those provisions are higher than appropriate for the upcoming Incremental Auctions in June 2009 and January 2010. The Market Monitor is concerned that use of these ACR values may lead to non-competitive market outcomes in the first Incremental Auction (June 1-5, 2009) for Delivery Year 2011/2012 and the third Incremental Auction (January 4-8, 2010) for Delivery Year 2010/2011 and asks the Commission to take action as necessary to correct this condition, if it agrees with the Market Monitor's views regarding non-competitive market outcomes.

PJM filed a responsive letter on April 29, 2009, containing correspondence between PJM and the Market Monitor. In this correspondence, PJM stated that, in its view, an expedited tariff change is not necessary, and that it believes that the prices produced by use of the ACR values accepted in the March 26 Order will lead to rates that are within the range of reasonable variation. PJM also stated that the RPM market design does not anticipate the default ACR values changing for each Delivery Year, and recommends that rather than seeking a tariff change on an emergency basis, PJM's stakeholders should consider this issue and, if they so choose, present this issue to the Commission in an orderly fashion. Therefore, while indicating that ACR changes are not feasible or advisable for the June 2009 Incremental Auction, PJM commits to add the topic of default ACR values to the agenda for the Capacity Markets Evolution Committee as an item to be discussed and resolved by stakeholders by September 1, 2009.

The Commission encourages electronic submission in lieu of paper using the “eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 14 copies of comments to the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426.

This filing is accessible on-line at http://www.ferc.gov, using the “eLibrary” link and is available for review in the Commission's Public Reference Room in Washington, DC. There is an “eSubscription” link on the Web site that enables subscribers to receive e-mail notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please e-mail [e-mail], or call [phone] (toll free). For TTY, call [phone].

Comment date: June 3, 2009.

Kimberly D. Bose,

Secretary.

Footnotes

1.  PJM Interconnection, L.L.C., 126 FERC ¶ 61,275 (2009).