FTR Forfeitures. An FTR holder may be subject to forfeiture of any profits from an FTR if it meets the criteria defined in Section 5.2.1 (b) of Schedule 1 of the PJM Operating Agreement. If a participant has a cleared increment offer or decrement bid for an applicable hour at or near the source or sink of any FTR they own and the day-ahead congestion LMP difference is greater than the real-time congestion LMP difference the profits from that FTR may be subject to forfeiture for that hour. An increment offer or decrement bid is considered near the source or sink point if 75 percent or more of the energy injected or withdrawn, and which is withdrawn or injected at any other bus, is reflected on the constrained path between the FTR source or sink. This rule only applies to increment offers and decrement bids that would increase the price separation between the FTR source and sink points. Figure 13-1 demonstrates the FTR forfeiture rule for INCs and DECs. The INC or DEC distribution factor (dfax) is compared to the largest impact withdrawal or injection dfax. If the absolute difference between the virtual bid and its counterpart is greater than or equal to 75 percent, the virtual bid is considered for forfeiture. This is the metric in the rule which defines the impact of the virtual bid on the constraint. In the first part of the example in Figure 13-1, the INC has a dfax of 0.25 and the maximum withdrawal dfax on the constraint is -0.5. The difference between the two dfaxes is -0.75 (0.25 minus -0.5). The absolute value is
FTR Forfeitures. Hourly FTR Cost Only the profit is forfeited when an FTR triggers the FTR forfeiture rule. The profit is calculated as the hourly FTR target allocation minus the FTR’s hourly cost. Under the current rules, the hourly cost is calculated incorrectly. Currently, the daily cost of an FTR is calculated for its effective period, and then divided by 24 hours. However, this does not accurately represent the hourly cost of on and off peak FTRs. The correct way to calculate the hourly cost of an FTR is to calculate its cost for the effective period only for hours in which it is effective.
FTR Forfeitures. An FTR holder may be subject to forfeiture of any profits from an FTR if it meets the criteria defined in Section 5.2.1 (b) of Schedule 1 of the PJM Operating Agreement. If a participant has a cleared increment offer or decrement bid for an applicable hour at or near the source or sink of any FTR they own and the day-ahead congestion LMP difference is greater than the real time congestion LMP difference the profits from that FTR may be subject to forfeiture for that hour. An increment offer or decrement bid is considered near the source or sink point if 75 percent or more of the energy injected or withdrawn, and which is withdrawn or injected at any other bus, is reflected on the constrained path between the FTR source or sink. This rule only applies to increment offers and decrement bids that would increase the price separation between the FTR source and sink points. Figure 12-2 shows the FTR forfeitures values for both counter flow and prevailing flow FTRs for each month of June 2010 through June 2013 by company type. Total forfeitures for the 2012 to 2013 planning period were $519,317 (0.06 percent of total FTR target allocations). Figure 12‑2 Monthly FTR Forfeitures for physical and financial participants: June 2010 through June 2013 2010/2011 2011/2012 2012/2013 2013/2 Physical Traditional Physical Counter Financial Traditional Financial Counter $300,000.00 $250,000.00 $200,000.00 $150,000.00 $100,000.00 $50,000.00 $- Credit Issues The credit issues reported here were not necessarily related to FTR positions. Six participants defaulted during 2013 from ten default events. The average of these defaults was $55,939 with seven based on inadequate collateral and three based on nonpayment. The average collateral default was $16,587 and the average nonpayment default was $147,761. The majority of these defaults were promptly cured, with one partial cure. Market Performance Volume Table 12-6 provides the Annual FTR Auction market volume for the 2013 to 2014 planning period. Total FTR buy bids were 3,274,373 MW, up 27.8 percent from 2,561,835 MW for the previous planning period. For the 2013 to 2014 planning period 391,148 MW (12.1 percent) of buy bids cleared, up 5.3 percent from 371,295 MW for the last planning period. There were 417,118 MW of sell offers with 37,821 MW (9.1 percent) clearing for the 2013 to 2014 planning period. Table 12‑6 Annual FTR Auction market volume: Planning period 2013 to 2014 Table 12-7 provides the Monthly Balance of Planning Per...
FTR Forfeitures. FERC Order on FTR Forfeitures On January 19, 2017, FERC determined that the application of the current FTR forfeiture rule to INCs, DECs and UTCs was unjust and unreasonable.55 In their determination, XXXX ordered that a method should be developed to consider the net impact of a participant’s entire portfolio of virtual bids on a constraint related to an FTR position and ordered that counter flow FTRs be included in FTR forfeiture calculations. FERC ordered a retroactive effective date and PJM determined that no FTR forfeitures would be billed to participants after January 19, 2017, under the prior rules. Participants were retroactively billed their FTR forfeiture amounts based on the new FTR forfeiture rule once it was in place. Until January 19, 2017, an FTR holder was subject to forfeiture of any profits from an FTR if it met the criteria defined in Section 5.2.1 (b) of Schedule 1 of the PJM Operating Agreement. If a participant has a cleared increment offer or decrement bid for an applicable hour at or near the source or sink of any FTR they own and the day-ahead congestion LMP difference is greater than the real-time congestion LMP difference the profits from that FTR may be subject to forfeiture for that hour. An increment offer or decrement bid is considered near the source or sink point if 75 percent or more of the energy injected or withdrawn, and which is withdrawn or injected at any other bus, is reflected on the constrained path between the FTR source or sink. This rule only applies to increment offers and decrement bids that would increase the price separation between the FTR source and sink points. After January 19, 2017, participants were subject to the new FTR forfeiture rule. This rule considers the impact of a participant’s net virtual transaction portfolio on all constraints. If a participant’s net virtual portfolio impacts a constraint by the greater of 0.1 MW or 10 percent or more of the line limit, and that constraint affects an individual FTR’s target allocation by $0.01, the FTR is subject to FTR forfeiture if the net virtual portfolio increased the value of the FTR. FTR forfeitures do not result from net virtual portfolios that 55 See 158 FERC ¶ 61,038. decrease the value of their affiliates’ FTRs. The forfeiture amount calculation is the hourly profit of the FTR and an FTR cannot forfeit more than once per hour. Figure 13-17 shows the monthly FTR forfeitures under the newly established FTR forfeiture rule from January 19, 2017 thr...
FTR Forfeitures. Total forfeitures for the first nine months of the 2012 to 2013 planning period were $492,556 (0.06 percent of total FTR target allocations). • Credit Issues. Four participants defaulted during 2013 from eight default events. The average of these defaults was $68,812 with four based on inadequate collateral and four based on nonpayment. The average collateral default was $13,275 and the average nonpayment default was $124,349. The majority of these defaults were promptly cured. These defaults were not necessarily related to FTR positions.
FTR Forfeitures. For the period of January 19, 2017, through March 31, 2019, except November 2018 which is not yet settled, total FTR forfeitures were $13.8 million. • Credit. There were no collateral defaults in the first three months of 2019. There were 46 payment defaults in 2019 not involving GreenHat Energy, LLC for a total of $54,489. GreenHat Energy continued to accrue payment defaults of $27.2 million in the first three months of 2019, for a total of $104.2 million in defaults for the company, including the auction liquidation costs. On June 21, 2018, GreenHat Energy, LLC was declared in default for two collateral calls totaling $2.8 million and two payment defaults totaling
FTR Forfeitures. Total forfeitures for the first seven months of the 2016 to 2017 planning period were $0.4 million for Increment Offers, Decrement Bids and UTC Transactions using PJM’s method. Using the proposed MMU approach, total FTR forfeitures would have been $0.6 million. • Credit Issues. There was one collateral default in 2016 which was promptly resolved.
FTR Forfeitures. FTR forfeitures were not billed after January 19, 2017, pending retroactive implementation of a new FTR forfeiture rule until the September bill, when PJM began retroactive billing under the new FTR forfeiture rule. In the period without FTR forfeiture bills, no information on forfeitures was provided to participants and behavior could not be adjusted. For the period of January 19, 2017, through June 30, 2018, total FTR forfeitures were $12.0 million.
FTR Forfeitures. Total forfeitures for the first four months of the 2014 to 2015 planning period were $53,740 for Increment Offers, Decrement Bids and UTC Transactions. • Credit Issues. People’s Power and Gas, LLC and CCES, LLC defaulted on their collateral calls and payment obligations in January 2014. Customers of these members have been reallocated accordingly, and neither company held any financial transmission rights. These two load-serving members accounted for 17 of the total 33 default events. People’s Power and Gas, LLC defaulted on three collateral calls totaling approximately $687,000 and then defaulted on four related payment obligations totaling approximately $554,000. CCES, LLC defaulted on two collateral calls totaling approximately $308,000 and then defaulted on eight related payment obligations totaling approximately $2.6 million. On March 6, 2014, PJM filed with FERC to terminate membership of these two companies. The FERC authorized this request effective April 24, 2014 and PJM utilized the default allocation assessment to apply their defaulting charges of approximately $1.9 million (total defaults of these two members less collateral held) to PJM’s non-defaulting members in accordance with section 15.2.2 of the OATT to non-defaulting members’ March 2014 monthly invoices.3
FTR Forfeitures. An FTR holder may be subject to forfeiture of any profits from an FTR if it meets the criteria defined in Section 5.2.1 (b) of Schedule 1 of the PJM Operating Agreement. If a participant has a cleared increment offer or decrement bid for an applicable hour at or near the source or sink of any FTR they own and the Day-ahead congestion LMP difference is greater than the real time congestion LMP difference the profits from that FTR may be subject to forfeiture for that hour. An increment offer or decrement bid is considered near the source or sink point if 75 percent or more of the energy $50,000.00 $- 9 March forfeitures are not billed to customers until after the issuance of this report. Credit Issues Monthly Auction Hedge Type Trade Type Bid and Requested Count Bid and Requested Volume (MW) Cleared Volume (MW) Cleared Volume Uncleared Volume (MW) Uncleared Volume Jan-13 Obligations Buy bids 150,397 963,036 166,622 17.3 796,414 82.7 Sell offers 84,563 297,609 34,710 11.7 262,899 88.3 Options Buy bids 2,830 104,318 6,767 6.5 97,551 93.5 Sell offers 10,204 73,624 17,322 23.5 56,302 76.5 Feb-13 Obligations Buy bids 164,620 1,035,756 166,386 16.1 869,369 83.9 Sell offers 76,210 261,631 36,402 13.9 225,229 86.1 Options Buy bids 2,518 94,039 4,749 5.0 89,290 95.0 Sell offers 9,053 62,833 16,434 26.2 46,399 73.8 Mar-13 Obligations Buy bids 168,718 1,092,986 188,849 17.3 904,138 82.7 Sell offers 77,248 256,820 40,079 15.6 216,741 84.4 Options Buy bids 2,674 103,046 5,591 5.4 97,455 94.6 Sell offers 10,054 84,993 21,581 25.4 63,411 74.6 2011/2012* Obligations Buy bids 2,787,546 15,084,909 2,216,646 14.7 12,868,263 85.3 Sell offers 1,078,612 5,164,979 551,669 10.7 4,613,310 89.3 Options Buy bids 40,237 2,549,347 58,829 2.3 2,490,519 97.7 Sell offers 99,695 687,656 164,180 23.9 523,476 76.1 2012/2013** Obligations Buy bids 2,024,470 11,652,143 1,908,482 16.4 9,743,660 83.6 Sell offers 1,000,008 3,621,897 415,307 11.5 3,206,590 88.5 Options Buy bids 101,282 6,647,722 67,918 1.0 6,579,804 99.0 Sell offers 140,623 1,005,439 235,919 23.5 769,519 76.5 * Shows Twelve Months for 2011/2012; ** Shows ten months ended 31-Mar-13 for 2012/2013 The credit issues reported here were not necessarily related to FTR positions. Four participants defaulted during 2013 from eight default events. The average of these defaults was $68,812 with four based on inadequate collateral and four based on nonpayment. The average collateral default was $13,275 ...
