UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
PJM Interconnection, L.L.C. ) Docket Nos. ER09-412-000,
) and EL05-148-000
PJM INTERCONNECTION, L.L.C.
PJM Interconnection, L.L.C. (“PJM”), pursuant to the Commission’s May 19,
2009 notice in these proceedings, provides these comments to update the Commission
and the parties on the stakeholder process that is considering the issue raised by the
Independent Market Monitor (“IMM”) for the PJM Region in his April 29, 2009 letter in
these dockets (“IMM Letter”).
In the IMM Letter, the IMM expressed concern that the default avoidable cost
rates (“ACRs”) recently accepted by the Commission1 for use in Reliability Pricing
Model (“RPM”) auctions to secure capacity for the PJM region are overstated as applied
to RPM auctions scheduled for June 2009 and January 2010.
PJM filed with the Commission, also on April 29, 2009, a copy of a letter to the
IMM stating its view that the ACR values accepted in the March 26 Order are within the
range of reasonableness for use in the June 2009 auction, and that an expedited tariff
filing to change the ACRs for that auction is not needed. PJM noted, however, that there
See PJM Interconnection, L.L.C., 126 FERC ¶ 61,275 (2009) (“March 26
should be adequate time for stakeholder and Commission consideration of this issue
before the January 2010 incremental auction, and committed to add the topic of default
ACR values to the agenda for the Capacity Markets Evolution Committee (“CMEC”) as
an item to be discussed and resolved by stakeholders by September 1, 2009.
The CMEC met on May 18, 2009, considered presentations on this issue by both
PJM and the IMM, and reached an initial consensus to consider a change to the PJM
tariff stating different ACRs by Delivery Year through May 31, 2013. PJM drafted tariff
language for this purpose (using the IMM’s method of calculating interim-year ACRs)
for the CMEC’s consideration at its next scheduled meeting, on June 8, 2009, including a
proposal, supported by a number of CMEC participants, for ACR values after the 2012-
13 Delivery Year to change automatically each year based on changes in the Handy-
Whitman power plant construction cost index.2 These contemplated tariff changes would
not apply to the June 2010 first incremental auction for the 2011-2012 Delivery Year, but
would apply to any subsequent base or incremental auctions for that or any other delivery
Tariff changes, if any, to address this issue possibly could be discussed further at
the CMEC’s June 30, 2009 or July 17, 2009 meetings. Any proposed tariff changes
would be reviewed and acted upon by the Markets and Reliability Committee at its July
30, 2009 meeting and the Members Committee at its August 13, 2009 meeting, to permit
any tariff changes to be filed with the Commission by September 1, 2009.
The draft tariff revisions were posted to the CMEC web-page on June 3, 2009 and
are available at: http://www.pjm.com/committees-and-
Wherefore, PJM asks that the Commission consider these comments as it
evaluates the IMM’s April 29, 2009 letter in these dockets.
Craig Glazer Barry S. Spector
Vice President – Federal Government Policy Paul M. Flynn
PJM Interconnection, L.L.C. Wright & Talisman, P.C.
1200 G Street, N.W. 1200 G Street, N.W.
Suite 600 Suite 600
Washington, D.C. 20005 Washington, D.C. 20005
(202) 423-4743 (phone) (202) 393-1200 (phone)
(202) 393-7741 (fax) (202) 393-1240 (fax)
Jacqulynn B. Hugee
PJM Interconnection, L.L.C.
955 Jefferson Avenue
Norristown, PA 19403
(610) 666-8208 (phone)
(610) 666-8211 (fax)
PJM Interconnection, L.L.C.
June 3, 2009
CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document upon each person
designated on the official service list compiled by the Secretary in this proceeding.
Dated at Washington, D.C., this 3rd day of June, 2009.
Paul M. Flynn
WRIGHT & TALISMAN, P.C.
1200 G Street, N.W., Suite 600
Washington, D.C. 20005