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PJM To Impose $10MM In Billing Adjustments To Re-allocate Reactive Supply & Voltage Control Charges

December 21,2017

PJM issued a market notice stating that it has determined that it, "has incorrectly allocated certain charges for Reactive Revenue Requirements under the PJM Open Access Transmission Tariff (Tariff), Schedule 2."

"Specifically, the Reactive Revenue Requirements of certain generation units included in a fleet-wide rate were previously allocated to a Zone based upon the historical establishment of the Reactive Revenue Requirement of that Zone. However, upon the unbundling of the generation units in such fleet to establish a Reactive Revenue Requirement for each generation unit, unless otherwise ordered by FERC, PJM should have allocated each Reactive Revenue Requirement to the Zone in which each generation unit is located, but it did not do so in all cases," PJM stated in the notice

PJM stated that it is authorized and obligated under Tariff, section 10.4 and the Amended and Restated Operating Agreement of PJM Interconnection, L.L.C., section 15.6 to issue adjusted billing statements to correct such errors for a period going back no more than 2 years from notifying Market Participants of such error -- in this case December 20, 2015. PJM has already identified the impact of certain unbundled generation units and will make a billing adjustment in the December 2017 month-end invoice to correct the error. Such December 2017 month-end invoice billing adjustment is currently expected to be approximately $10 - $16 million of Reactive Supply and Voltage Control charges that will be reallocated from the PSEG zone to the PECO, Penelec and JCPL zones. The prospective impact of the updated allocations is approximately $560,000 of Reactive Supply and Voltage Control charges per month shifting from the PSEG zone to the PECO, Penelec and JCPL zones.

PJM stated in the notice that it, "may make similar adjustments going back to no earlier than December 20, 2015, if it identifies other similar circumstances."

"As we begin processing the adjustments and if you are impacted, you will be able to see the results in the Reactive Charge Summary, Month-to-Date Bill and BLI Adjustment Summary Reports in the Market Settlement Reporting System (MSRS)," PJM stated in the notice

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