Revenue Adequacy. Revenue adequacy for ARRs must be distinguished from the adequacy of ARRs as an offset to total congestion. Revenue adequacy is a narrower concept that compares the revenues available to ARR holders to the value of ARRs as determined in the Annual FTR Auction. ARRs have been revenue adequate for every auction to date. Customers that self schedule ARRs as FTRs have the same revenue adequacy characteristics as all other FTRs. Total net FTR auction revenue for the 2016/2017 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 planning period, total net FTR auction revenue was $598.3 million. Table 13-7 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 planning period and the first ten months of the 2017/2018 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 $598.3 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 $37.4 Figure 13-2 shows the monthly auction revenue collected each month from FTR auctions above ARR target allocations from the 2011/2012 through 2017/2018 planning periods. Beginning with the 2014/2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec
Appears in 1 contract
Samples: Financial Transmission and Auction Revenue Rights Agreement
Revenue Adequacy. Revenue As with FTRs, revenue adequacy for ARRs must be distinguished from the adequacy of ARRs as an offset to total congestion. Revenue adequacy is a narrower concept that compares the revenues available to ARR holders to the value of ARRs as determined in the Annual FTR Auction. ARRs have been revenue adequate for every auction to date. Customers that self schedule ARRs as FTRs have the same revenue adequacy characteristics as all other FTRs. Total net ARR holders received $968.1 million in credits from the FTR auction revenue for auctions during the 2016/2017 15/16 planning period, period before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 first 10 months of the 16/17 planning period, total net FTR auction revenue was ARR holders received $598.3 million940.3 million in ARR credits. Table 13-7 6 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 15/16 planning period and the first ten 10 months of the 2017/2018 16/17 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 968.1 $598.3 940.3 Annual FTR Auction net revenue $936.3 $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.8 $31.3 ARR target allocations $37.4 931.6 $913.8 ARR credits $931.6 $913.8 Surplus auction revenue $36.5 $26.5 ARR payout ratio 100 100 FTR payout ratio* 100 100 * Shows twelve months for 2015/2016 and ten months for 2016/2017. Figure 13-2 shows the dollars per ARR MW held for each month of the 10/11 planning period through the first 10 months of the 16/17 planning periods. The ARR MW held do not include self-scheduled FTRs and do include Residual ARRs starting in August 2012. FTR prices increased in the 14/15 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 14/15 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the 15/16 planning period, the dollars per MW of ARR allocation was $10,641.54. For the first 10 months of the 16/17 planning period, the dollars per MW of ARR allocation were $9,337.48 down from $9,608.25 in the first 10 months of the 15/16 planning period. Total dollars per MW were down slightly in the 16/17 planning period due to increased Stage 1B and Stage 2 ARR volume. 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 $/ARR MW Figure 13-3 shows the monthly excess auction revenue from the 11/12 through 15/16 planning periods. Excess auction revenue is the revenue collected each month from FTR auctions above in excess of ARR target allocations from the 2011/2012 through 2017/2018 planning periodsallocations. Beginning with the 2014/2015 14/15 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 adequate.19 This allows PJM to use the excess auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in excess ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Decin
Appears in 1 contract
Samples: Financial Transmission and Auction Revenue Rights Agreement
Revenue Adequacy. Revenue As with FTRs, revenue adequacy for ARRs must be distinguished from the adequacy of ARRs as an offset to total congestion. Revenue adequacy is a narrower concept that compares the revenues available to ARR holders to the value of ARRs as determined in the Annual FTR Auction. ARRs have been revenue adequate for every auction to date. Customers that self schedule ARRs as FTRs have the same revenue adequacy characteristics as all other FTRs. Total net FTR auction revenue for the 2016/2017 planning period, before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 planning period, total net FTR auction revenue was $598.3 558.4 million. Table 13-7 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 planning period and the first ten four months of the 2017/2018 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 941.5 $598.3 558.4 Annual FTR Auction net revenue $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 32.5 $37.4 Figure 13-2 shows the monthly auction revenue collected each month from FTR auctions above ARR target allocations from the 2011/2012 through 2017/2018 planning periods. Beginning with the 2014/2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM to use auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014. The extra auction revenue is allocated pro rata to FTR Holders at the end of the planning period. All FTR auction revenue should be distributed to ARR holders. 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 16.2 ARR target allocations $914.2 $561.1 venu 550.4 ARR credits $914.2 $561.1 $6,000,000 550.4 Surplus auction revenue $46.9 27.4 $37.2 xcess 8.0 ARR payout ratio 100 100 E 100% 100% FTR payout ratio* 100 100 $4,000,000 100% 100% * Shows twelve months for 2016/2017 ** Shows ten four months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct DecFigure 13-2 shows the dollars per ARR MW held for each month of the 2010/2011 planning period through the first four months of the 2017/2018 planning periods. The ARR MW held do not include self scheduled FTRs but do include Residual ARRs starting in August 2012. FTR prices increased in the 2014/2015 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and
Appears in 1 contract
Samples: Financial Transmission and Auction Revenue Rights Agreement
Revenue Adequacy. Revenue As with FTRs, revenue adequacy for ARRs must be distinguished from the adequacy of ARRs as an offset to total congestion. Revenue adequacy is a narrower concept that compares the revenues available to ARR holders to the value of ARRs as determined in the Annual FTR Auction. ARRs have been revenue adequate for every auction to date. Customers that self schedule ARRs as FTRs have the same revenue adequacy characteristics as all other FTRs. Total net ARR holders received $968.1 million in credits from the FTR auction revenue for auctions during the 2016/2017 2015 to 2016 planning period, period before accounting for self scheduling, load shifts or residual ARRs, was $941.5 million. The FTR auction revenue collected pays ARR holders’ credits. During the 2017/2018 first seven months of the 2016 to 2017 planning period, total net FTR auction revenue was ARR holders received $598.3 million935.7 million in ARR credits. Table 13-7 12 lists projected ARR target allocations from the Annual ARR Allocation and net revenue sources from the Long Term, Annual and Monthly Balance of Planning Period FTR Auctions for the 2016/2017 2015 to 2016 planning period and the first ten seven months of the 2017/2018 2016 to 2017 planning periods. 2016/2017* 2017/2018** Total FTR auction net revenue $961.1 968.1 $598.3 935.7 Annual FTR Auction net revenue $936.3 $909.0 $542.2 Long Term FTR Auction net revenue $20.8 $18.6 Monthly Balance of Planning Period FTR Auction net revenue* $31.3 31.8 $37.4 26.7 ARR target allocations $931.6 $911.4 ARR credits $931.6 $911.4 Surplus auction revenue $36.5 $24.3 ARR payout ratio 100% 100% FTR payout ratio* 100% 100% * Shows twelve months for 2015/2016 and seven months for 2016/2017. Figure 13-4 shows the dollars per ARR MW held for each month of the 2010 to 2011 planning period through the first seven months of the 2016 to 2017 planning periods. The ARR MW held do not include self-scheduled FTRs and do include Residual ARRs starting in August 2012. FTR prices increased in the 2014 to 2015 Annual FTR Auction as a result of reduced supply caused by PJM’s assumption of more outages in the model used to allocate Stage 1B and Stage 2 ARRs. The increased FTR prices resulted in an increase in dollars paid per ARR MW. For the 2014 to 2015 planning period, the total dollars per MW of ARR allocation was $11,279, while the previous planning period resulted in a dollars per MW of $6,692, a 68.5 percent increase in payment per allocated ARR MW. Some of the ARR MW lost from proration were provided in the Residual ARR process, but the residual allocations are not comparable to the ARRs awarded in the annual process because residual ARR allocations change each month and cannot be self scheduled as FTRs. For the 2015 to 2016 planning period, the dollars per MW of ARR allocation was $10,641.54. For the first seven months of the 2016 to 2017 planning period, the dollars per MW of ARR allocation were $7,180.49 down from $7,739.36 in the first seven months of the 2015 to 2016 planning period. Total dollars per MW were down slightly in the 2016 to 2017 planning period due to increased Stage 1B and Stage 2 ARR volume. 2010/2011 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 2016/2017 allows PJM to use the excess auction revenue to pay prevailing flow FTRs without increasing prevailing flow obligations. The result is to increase FTR funding. This action removes money from the ARR revenue stream and caused the decrease in excess ARR revenue beginning in June 2014. Excess auction revenue is allocated pro rata to FTR holders at the end of the planning period, instead of being distributed to ARR holders. 11/12 12/13 13/14 14/15 15/16 16/17 $12,000,000 $10,000,000 Excess Revenue $8,000,000 $6,000,000 $4,000,000 $2,000,000 June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec $1,600 $- $1,400 $/ARR MW Figure 13-5 shows the monthly excess auction revenue from the 2011 to 2012 through 2015 to 2016 planning periods. Excess auction revenue is the revenue collected each month from FTR auctions above in excess of ARR target allocations from the 2011/2012 through 2017/2018 planning periodsallocations. Beginning with the 2014/2015 2014 to 2015 planning period, market rules allow PJM to decrease prevailing flow target allocations by clearing counter flow FTRs, without making the opposite prevailing flow FTR available, as long as ARRs remain revenue adequate.22 This allows PJM Table 13-13 shows the excess auction revenue, by planning period, for planning periods 2010 to use auction 2011 through 2016 to 2017. 2010/2011 $29,704,562 2011/2012 $80,083,695 2012/2013 $66,652,822 2013/2014 $71,687,937 2014/2015* $29,045,590 2015/2016 $29,612,591 2016/2017** $12,093,742 Total $318,880,939 *Start of counter flow “buy back” **Through December 31, 2016 22 See PJM. “Manual 6: Financial Transmission Rights” Revision 17 (June 1, 2016), p. 55. FTRs are financial instruments that entitle their holders to receive revenue or require them to pay prevailing flow FTRs without increasing prevailing flow obligationscharges based on locational congestion price differences in the Day- Ahead Energy Market across specific FTR transmission paths, subject to total congestion revenue including day-ahead and balancing congestion. The result is to increase value of the day-ahead congestion price differences, termed the FTR funding. This action removes money from target allocation, defines the ARR revenue stream and caused the decrease in ARR revenue over ARR target allocations beginning in June 2014maximum, but not guaranteed, payout for FTRs. The extra auction revenue is allocated pro rata to target allocation of an FTR Holders at reflects the end of difference in day-ahead congestion prices rather than the planning period. All FTR auction revenue should be distributed to ARR holders. 11/12 12/13 13/14 14/15 15/16 16/17 17/18 $12,000,000 $10,000,000 Re e $8,000,000 ARR target allocations $914.2 $561.1 venu ARR credits $914.2 $561.1 $6,000,000 Surplus auction revenue $46.9 $37.2 xcess ARR payout ratio 100 100 E FTR payout ratio* 100 100 $4,000,000 * Shows twelve months for 2016/2017 ** Shows ten months for 2017/2018. $2,000,000 $- June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Dec Feb Apr June Aug Oct Decdifference in LMPs, which includes both congestion and marginal losses.
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