On April 19, 2013, FERC granted a complaint by Comverge, Inc., Viridity Energy, and Energy Curtailment Specialists (the “Demand Response Coalition”) alleging that PJM Interconnection L.L.C.’s (“PJM”) revisions to its Manual 18, PJM Capacity Market are unenforceable and violate section 205 of the Federal Power Act (“FPA”). The Demand Response Coalition argued that the Manual 18 revisions “significantly” affect jurisdictional rates, terms and conditions of service and thus, must be filed with FERC. The Commission granted the complaint, and found that PJM’s proposed changes must be included in a Commission-accepted tariff, and not in “other documents” such as the PJM Manual. Notably, while the Commission granted the complaint, it did not appear to prejudge the substance of the changes PJM is seeking to make.
PJM argued in response to the complaint that the proposed Manual 18 revisions merely referred to the same information that PJM already required in annual postings. Specifically, PJM’s proposed Manual 18 revisions require a Curtailment Service Provider (“CSP”) to submit a “DR Sell Offer Plan” 15 business days before the Reliability Pricing Model (“RPM”) Auction and relay information regarding how the CSP will provide the megawatts it plans to offer in the Auction. PJM’s Manual 18 revisions further require that the DR Sell Offer Plan describe: (1) certain demand response values by zone/subzone; (2) plans to obtain load reduction at customer sites, timelines for procuring resources; and (3) an officer certification regarding the “reasonable expectation …to physically deliver all megawatts that clear the RPM Auction through Demand Resource registrations by the specified Delivery Year.” PJM’s proposed Manual 18 revisions also indicate that in certain zones “flagged” with high levels of Demand Response, a “sell-offer” threshold will be created for each CSP and sell offer quantities over this threshold will need site-specific information. Finally, PJM’s proposed Manual 18 revisions render end-user sites identified in multiple CSP plans “ineligible” to bid into the RPM auction, unless the CSP has a letter of support from the end-user site.
FERC agreed with the Demand Response Coalition that the proposed Manual 18 revisions “significantly affect jurisdictional rates, terms and conditions of service” and must be submitted under section 205 of the FPA. FERC noted that it issued an order in 2006 requiring PJM to incorporate rules related to demand response participation in RPM into the PJM Tariff. In its April 19 order, FERC found that consistent with its prior holding in 2006, the Manual 18 revisions reflect “new practices” and must be filed with the Commission to review their justness and reasonableness. Finally, FERC encouraged PJM to submit a section 205 filing to propose the changes contained in their Manual 18 revisions.
Commissioners Moeller and Clark issued a joint concurring statement, expressing concern that PJM be able to ensure that resources make “legitimate and accurate offers into the capacity market.” Commissioner Moeller and Clark also encouraged PJM to submit a section 205 filing to allow FERC to address the merits of PJM’s proposed changes.
A copy of FERC’s order is available here.