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.
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