This morning FERC had a live broadcast about how PJM is charging market participants for their participation in FTR/Virtual/UTC markets. The specific topic was: Uplift Cost Allocation and Transparency in Markets Operated by Regional Transmission Organizations and Independent System Operators. The motion was passed and this could affect how our clients are charged for their participation in not only PJM, but other ISO’s. It could have a large impact on smaller trading shops if uplift costs are increased and made to be retroactive. Impacts could be large for both Front and Back Office operations. Stay tuned in for more in the upcoming weeks from Adapt2 Solutions.
STAKEHOLDERS AND THE COMMISSION SHOULD STRIVE TO MINIMIZE UPLIFT WHEN AND WHERE POSSIBLE BECAUSE UPLIFT IS UNHEDGABLE, LACKS TRANSPARENCY AND IF NOT ALLOCATED PROPERLY CAN ENCOURAGE INEFFICIENT BEHAVIOR. WHILE TODAY’S PROPOSAL WOULD NOT OVERHAUL UPLIFT IT DOES TAKE STEPS TO IMPROVE UPLIFT ALLOCATION BY ALLOCATING DEVIATION RELATED REALTIME UPLIFT MORE PRECISELY TO THE MARKET PARTICIPANTS THAT ARE REASONABLY EXPECTED TO HAVE CAUSED THE UPLIFT COST IN THE FIRST PLACE AND PREVENT UPLIFT CHARGES TO MARKET PARTICIPANTS THAT HELP TO REDUCE REALTIME DEVIATION. FINALLY, THIS PROPOSAL WOULD INCREASE MARKET TRANSPARENCY BY REQUIRING RTO/ISOs TO PUBLICLY REPORT MORE DETAILED INFORMATION ABOUT UPLIFT CHARGES AND OPERATOR INITIATED COMMITMENTS AND REQUIRE RTO/ISOs TO INCLUDE INFORMATION ABOUT TRANSMISSION CONSTRAINT PENALTY FACTORS IN THEIR TARIFFS.” – FERC CHAIRMAN, NORMAN BAY
Officer Stanley Wolf from the Office of Energy Policy Innovation furthered his support with the following:
INFORMATION CONCERNING THE AMOUNT, TIMING, LOCATIONS, AND DRIVERS OF UPLIFT COST AND OPERATING INITIAL TRANSMISSION PENALTY FACTORS WILL PROVIDE MARKET PARTICIPANTS WITH MORE INFORMATION ON HOW THE SYSTEM OPERATES, SHOULD INCLUDE ABILITY TO MAKE MORE INFORMED BUSINESS DECISIONS.”