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FERC Rules That Entering Bilateral FTR Data Into PJM System Does Not Create A Separate Contract

November 19,2020



FERC Rules That Entering Bilateral FTR Data Into PJM System Does Not Create A Separate Contract (Shell Petition)

Ruling on a petition from Shell, FERC issued an order finding that, "We find that entry of data into the [PJM] FTR Center for bilateral trades does not automatically establish stand-alone bilateral contracts at the stated price, absent a separate agreement by the parties to do so."

As previously reported, Shell had sought such a ruling from FERC, prompted by a court proceeding involving a breach-of-contract claim by GreenHat Energy, LLC ('GreenHat') regarding bilateral contracts to transfer FTRs between GreenHat and Shell Energy. According to Shell, GreenHat does not allege that Shell Energy breached those binding agreements. Instead, GreenHat claims that entering data into PJM’s platform for reporting FTR transfers created additional separate, binding contracts, which Shell Energy allegedly breached.

See more background on the issue here

Specifically, on May 29, 2020, Shell Energy North America (US), L.P. (Shell) filed a petition for declaratory order, pursuant to Rule 207 of the Commission’s Rules of Practice and Procedure, relating to disputes between Shell and GreenHat Energy, LLC (GreenHat). First, Shell requests that the Commission interpret provisions regarding bilateral transfers of Financial Transmission Rights (FTRs) under the PJM Interconnection, L.L.C. (PJM) Open Access Transmission Tariff (PJM Tariff).

Shell stated that an interpretation of the PJM Tariff will clarify whether the entry of price, volume, and other data regarding FTR bilateral transfers into PJM’s FTR Center automatically establishes stand-alone bilateral contracts at the stated price. Shell also asked the Commission to assert primary jurisdiction to resolve on the merits a lawsuit that GreenHat has filed against Shell in Texas state court.

For the reasons discussed in the order, FERC granted Shell’s request, in part, to provide an interpretation of the PJM Tariff.

"We find that entry of data into the FTR Center for bilateral trades does not automatically establish stand-alone bilateral contracts at the stated price, absent a separate agreement by the parties to do so," FERC said

"We decline to assert primary jurisdiction to resolve the dispute under Texas law as to whether Shell and GreenHat entered into separate contracts that Shell would make payments based on entries in the FTR Center," FERC said

See FERC's order here for its full discussion and reasoning

Docket No. EL20-49-000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tags:
FERC   FTRs   PJM  

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