IMM Files Complaint At FERC Saying Capacity Market Seller Offer Cap Is Overstated
Monitoring Analytics, LLC, acting in its capacity as the Independent Market Monitor (“Market Monitor”) for PJM Interconnection, L.L.C. (“PJM”), filed a Complaint at FERC seeking an order directing PJM to update the assumptions regarding the expected number of performance assessment intervals (“PAI”), formerly known as performance assessment hours (“PAH”), in calculating the default capacity market seller offer cap (“MSOC”).
"As a result of using an unreasonable and unsupported number of expected PAI (PAH) with the current nonperformance charge rate based on 30 hours, the default MSOC is overstated. This means that only a small number of very high offers are subject to unit specific cost review for market power. Most offers, including the offers setting price, are not subject to unit specific cost review for market power. An excessive default MSOC prevents effective mitigation of market power in the PJM Capacity Market. The lack of effective market power mitigation in the capacity market, where structural market power is endemic, is unjust and unreasonable. The public cannot rely on RPM auctions using the current default MSOC to ensure just and reasonable capacity market prices. PJM should be directed to revise the expected number of PAI (PAH) used to set the default MSOC," the IMM said in the complaint