Manual 6. Financial Transmission Rights” Revision 15 (October 10, 2013), p. 22. • Stage 2. Stage 2 of the annual ARR allocation is a three-step procedure, with one-third of the remaining system capability allocated in each step of the process. Network transmission service customers can obtain ARRs from any hub, control zone, generator bus or interface pricing point to any part of their aggregate load in the control zone or load aggregation zone for which an ARR was not allocated in Stage 1A or Stage 1B. Firm, point-to-point transmission service customers can obtain ARRs consistent with their transmission service as in Stage 1A and Stage 1B. Prior to the start of the Stage 2 annual ARR allocation process, ARR holders can relinquish any portion of their ARRs resulting from the Stage 1A or Stage 1B allocation process, provided that all remaining outstanding ARRs are simultaneously feasible following the return of such ARRs.20 Participants may seek additional ARRs in the Stage 2 allocation. Effective for the 2015 to 2016 planning period, when residual zone pricing will be introduced, an ARR will default to sinking at the load settlement point, but the ARR holder may elect to sink their ARR at the physical zone instead.21 ARRs can also be traded between LSEs, but these trades must be made before the first round of the Annual FTR Auction. Traded ARRs are effective for the full 12-month planning period. When ARRs are allocated, all ARRs must be simultaneously feasible to ensure that the physical transmission system can support the approved set of ARRs. In making simultaneous feasibility determinations, PJM utilizes a power flow model of security-constrained dispatch that takes into account generation and transmission facility outages and is based on assumptions about the configuration and availability of transmission capability during the planning period.22 This simultaneous feasibility requirement is necessary to ensure that there are sufficient revenues from congestion charges to satisfy all resulting ARR obligations. If the requested set of ARRs is not simultaneously feasible, customers are allocated prorated shares in direct proportion to their requested
Manual 6. Financial Transmission Rights,” Revision 15 (October 10, 2013), pp. 31 and “IARRs for RTEP Upgrades Allocated for 2011/2012 Planning Period,” <xxxx://xxx.xxx.xxx/~/media/markets-ops/ftr/annual-arr-allocation/2011-2012/iarrs-rtep-upgrades- allocated-for-2011-12-planning-period.ashx>.
Manual 6. Financial Transmission Rights,” Revision 15 (October 10, 2013), pp. 55-56. 23 See the MMU Technical Reference for PJM Markets, at “Financial Transmission Rights and Auction Revenue Rights,” for an illustration explaining this calculation in greater detail. the more conservative approach to outages in the Annual FTR Auction reduces revenue inadequacy, which was caused in part by Stage 1A ARR over allocations, it does not address the Stage 1A ARR over allocation issue directly and it resulted in decreased Stage 1B ARR allocations through proration, decreased Stage 2 ARR allocations through proration and decreased FTR capability. Stage 1A ARRs were not affected by the more conservative treatment of outages because they may not be prorated. Figure 13-11 shows the historic allocations for Stage 1B and Stage 2 ARRs from the 2011 to 2012 to 2014 to 2015 planning periods. There was an 84.9 percent decrease in Stage 1B ARRs allocated and an 88.1 percent decrease in total Stage 2 ARR allocations from the 2013 to 2014 planning period to the 2014 to 2015 planning period. Figure 13‑11 Historic Stage 1B and Stage 2 ARR Allocations from the 2011 to 2012 through 2014 to 2015 planning periods Stage 1B Stage 2-1 Stage 2-2 Stage 2-3 25,000 20,000 Allocated MW 15,000 10,000 5,000 0 2011/2012 ARR 2012/2013 ARR 2013/2014 ARR 2014/2015 ARR Table 13-21 shows the ARR allocations for the 2011 to 2012 through 2014 to 2015 planning periods. Stage 1A allocations cannot be prorated and have been slowly increasing. Stage 1B and Stage 2 allocations can be prorated. Stage 1B and Stage 2 allocations were steadily declining over the 2011 to 2012 through 2013 to 2014 planning periods, but were very significantly reduced in the 2014 to 2015 planning period as a result of PJM’s modified approach to outage modeling designed to increase revenue adequacy. Table 13‑21 Historic Stage 1B and Stage 2 ARR Allocations from the 2011 to 2012 through 2014 to 2015 planning periods Stage 2011/2012 ARR 2012/2013 ARR 2013/2014 ARR 2014/2015 ARR Stage 1A 64,159.9 67,299.6 67,861.4 68,837.7 Stage 1B 22,208.3 18,431.7 15,782.0 2,389.6 Stage 2-1 3,072.5 2,700.6 3,519.2 360.9 Stage 2-2 6,652.6 3,334.3 3,200.0 455.9 Stage 2-3 6,382.6 6,218.7 2,611.8 291.2 Total Stage 2 16,107.7 12,253.6 9,331.0 1,108.0 ARR Reassignment for Retail Load Switching PJM rules provide that when load switches between LSEs during the planning period, a proportional share of associated ARRs that sink into a given control or load aggregation...
Examples of Manual 6 in a sentence
Status: Not adopted.) • The MMU recommends that PJM improve transmission outage modeling in the FTR auction models, including the use of probabilistic outage 12 See “PJM Manual 6: Financial Transmission Rights,” Rev.
In an apparent effort to manage FTR revenues, PJM may adjust normal transmission limits (rather than the 38 See “PJM Manual 6: Financial Transmission Rights,” Rev.
There were 44,823 MW of ARRs associated with $339,500 of revenue that were reassigned in the receiving the asserted benefit of higher ARR value that 28 See “PJM Manual 6: Financial Transmission Rights,” Rev.
Network transmission service customers can obtain ARRs up to their share of zonal peak load, which is the highest daily peak load in the prior twelve month period increased by load growth projections, based on generation to load 18 “PJM Manual 6: Financial Transmission Rights,” Rev.
PJM can assume higher outage levels and PJM can decide to include additional constraints (closed loop interfaces) both of which reduce 29 See “PJM Manual 6: Financial Transmission Rights,” Rev.
More Definitions of Manual 6
Manual 6. Financial Transmission Rights,” Revision 15 (October 10, 2013), pp. 55-56. feasibility requirement is necessary to ensure that there are sufficient revenues from congestion charges to satisfy all resulting ARR obligations. If the requested set of ARRs is not simultaneously feasible, customers are allocated prorated shares in direct proportion to their requested MW and in inverse proportion to their impact on binding constraints, except Stage 1A ARRs: Equation 13-1 Calculation of prorated ARRs Individual prorated MW = (Constraint capability) X (Individual requested MW / Total requested MW) X (1 / MW effect on line).26 The effect of an ARR request on a binding constraint is measured using the ARR’s power flow distribution factor. An ARR’s distribution factor is the percent of each requested MW of ARR that would have a power flow on the binding constraint. The PJM methodology prorates ARR requests in proportion to their MW value and the impact on the binding constraint. PJM’s method results in the prorating only of ARRs that cause the greatest flows on the binding constraint. Were all ARR requests prorated equally, regardless of their proportional impact on the binding constraints, the result would be a significant reduction in market participants’ ARRs. auction model. While the more conservative approach to outages in the Annual FTR Auction reduces revenue inadequacy, which was caused in part by Stage 1A ARR overallocations, it does not address the Stage 1A ARR overallocation issue directly and it resulted in decreased Stage 1B ARR allocations through proration, decreased Stage 2 ARR allocations through proration and decreased FTR capability. Stage 1A ARRs were not affected by the more conservative treatment of outages because they may not be prorated. Figure 13-15 shows the historic allocations for Stage 1B and Stage 2 ARRs from the 2011 to 2012 to 2014 to 2015 planning periods. There was an 84.9 percent decrease in Stage 1B ARRs allocated and an 88.1 percent decrease in total Stage 2 ARR allocations from the 2013 to 2014 planning period to the 2014 to 2015 planning period. Figure 13-15 Historic Stage 1B and Stage 2 ARR Allocations from the 2011 to 2012 through 2014 to 2015 planning periods Stage 1B Stage 2-1 Stage 2-2 Stage 2-3 25,000.0 20,000.0
Manual 6. Financial Transmission Rights,” Revision 16 (June 1, 2014), p. 55.
Manual 6. Financial Transmission Rights,” Revision 15 (October 10, 2013), pp. 21. 24 See “Residual Zone Pricing,” PJM Presentation to the Members Committee (February 23, 2012) <xxxx://xxx.xxx.xxx/~/media/committees-groups/committees/mc/20120223/20120223-item- 03-residual-zone-pricing-presentation.ashx> The introduction of residual zone pricing, while approved by PJM members, depends on a FERC order.
Manual 6. Financial Transmission Rights,” Revision 16 (June 1, 2014) p. 56. 24 See PJM. “Manual 6: Financial Transmission Rights,” Revision 16 (June 1, 2014) p. 56. Table 13-17 Long Term FTR Auction market volume: Planning period 2016 to 2019 Trade Type FTR Direction Period Type Bid and Requested Count Bid and Requested Volume (MW) Cleared Volume (MW) Cleared Volume Uncleared Volume (MW) Uncleared Volume Buy bids Counter Flow Year 1 69,294 203,576 44,632 21.9% 158,944 78.1% Year 2 60,191 167,272 37,036 22.1% 130,236 77.9% Year 3 56,893 146,128 37,819 25.9% 108,309 74.1% Year All 481 2,849 1,162 40.8% 1,687 59.2% Total 186,859 519,826 120,650 23.2% 399,176 76.8% Prevailing Flow Year 1 163,197 708,948 60,879 8.6% 648,069 91.4% Year 2 142,419 583,929 47,617 8.2% 536,313 91.8% Year 3 144,512 609,599 47,743 7.8% 561,856 92.2% Year All 6,237 37,643 507 1.3% 37,135 98.7% Total 456,365 1,940,120 156,746 8.1% 1,783,373 91.9% Total 643,224 2,459,946 277,397 11.3% 2,182,549 88.7% Sell offers Counter Flow Year 1 36,047 101,383 15,139 14.9% 86,243 85.1% Year 2 19,076 52,779 6,339 12.0% 46,440 88.0% Year 3 4,649 9,646 581 6.0% 9,064 94.0% Year All NA NA NA NA NA NA Total 59,772 163,807 22,060 13.5% 141,747 86.5% Prevailing Flow Year 1 39,472 102,176 26,278 25.7% 75,898 74.3% Year 2 22,689 49,719 11,330 22.8% 38,389 77.2% Year 3 6,510 12,278 1,542 12.6% 10,736 87.4% Year All NA NA NA NA NA NA Total 68,671 164,173 39,151 23.8% 125,022 76.2% Total 128,443 327,980 61,210 18.7% 266,770 81.3% Table 13-18 provides the Annual FTR Auction market volume for the 2015 to 2016 planning period. Total FTR buy bids were 2,461,662 MW, down 24.7 percent from 3,270,311 MW for the previous planning period. For the 2015 to 2016 planning period 354,630 MW (14.5 percent) of buy bids cleared, down 3.1 percent from 365,843 MW for the previous planning period. There were 378,744 MW of sell offers with 63,983 MW (16.9 percent) clearing for the 2015 to 2016 planning period. The total volume of cleared buy and self-scheduled bids was 378,328 MW, up 3.4 percent from 365,843 in the previous Annual FTR Auction.
Manual 6. Financial Transmission Rights,” Revision 16 (June 1, 2014), p22. the modeled capacity limits on 84 facilities, 24 of which were internal to PJM, a total of 6,271 MW.18 Figure 13-2 shows the predicted and estimated impact of Stage 1A infeasibilities on funding for the 2012 to 2013 through 2014 to 2015 planning periods, as well as the predicted impact on funding for the 2015 to 2016 planning period. The predicted funding is based on the infeasible ARR MW and the nodal price of the source and sink in the Annual FTR Auction. The estimated funding is calculated assuming every infeasible ARR MW is self scheduled, and uses the hourly congestion LMP values. In the 2014 to 2015 planning period Stage 1A ARR infeasibilities accounted for $105.9 million in over allocation. Figure 13-2 Stage 1A Infeasibility Funding Impact Predicted Estimated $300 $250 Funding Impact (Millions) $200 $150 $100 $50 $- 12/13 13/14 14/15 15/16 Figure 13-3 shows a map of over allocated ARR source points in Stage 1A, regardless of reason, for the 2013 to 2014 through 2015 to 2016 planning period. The year indicated for each source point is the latest year that source was announced as over allocated in the Stage 1A process. Generators retired as of the 2015 to 2016 planning period are indicated by a square marker to show Stage 1A source points that are no longer in service for the most recent Stage 1A allocation period. 18 PJM 2015/2016 Stage 1A Over allocation notice, PJM FTRs, <xxxx://xxx.xxx.xxx/~/media/ markets-ops/ftr/annual-arr-allocation/2015-2016/2015-2016-stage-1a-over-allocation-notice. ashx> (March 5, 2015). Figure 13-3 Overallocated Stage 1A ARR source points Revenue ARRs are allocated to qualifying customers rather than sold, so there is no ARR revenue comparable to the revenue that results from the FTR auctions.
Manual 6. Financial Transmission Rights,” Revision 15 (October 10, 2013,) p. 56. Table 13‑5 Monthly Balance of Planning Period FTR Auction market volume: 2015 Monthly Auction Type Trade Type Bid and Requested Count Bid and Requested Volume (MW) Cleared Volume (MW) Cleared Volume Uncleared Volume (MW) Uncleared Volume Jan-15 Obligations Buy bids 252,024 1,586,427 144,179 9.1% 1,442,248 90.9% Sell offers 99,255 247,626 61,026 24.6% 186,600 75.4% Options Buy bids 10,732 263,464 2,787 1.1% 260,678 98.9% Sell offers 2,886 15,735 4,571 29.1% 11,164 70.9% Feb-15 Obligations Buy bids 266,009 1,417,759 161,646 11.4% 1,256,112 88.6% Sell offers 96,236 237,844 51,752 21.8% 186,091 78.2% Options Buy bids 12,280 284,062 6,106 2.1% 277,956 97.9% Sell offers 3,281 16,999 5,332 31.4% 11,667 68.6% Mar-15 Obligations Buy bids 254,361 1,467,192 151,571 10.3% 1,315,621 89.7% Sell offers 97,054 259,360 54,239 20.9% 205,121 79.1% Options Buy bids 7,894 216,952 8,671 4.0% 208,281 96.0% Sell offers 4,158 28,822 8,783 30.5% 20,039 69.5% Apr-15 Obligations Buy bids 195,242 1,239,939 133,675 10.8% 1,106,263 89.2% Sell offers 67,401 211,198 53,998 25.6% 157,200 74.4% Options Buy bids 6,529 189,448 6,364 3.4% 183,084 96.6% Sell offers 3,049 23,932 7,442 31.1% 16,490 68.9% May-15 Obligations Buy bids 118,504 696,460 81,864 11.8% 614,596 88.2% Sell offers 35,828 104,822 36,911 35.2% 67,910 64.8% Options Buy bids 3,709 120,692 2,524 2.1% 118,169 97.9% Sell offers 1,366 12,379 4,778 38.6% 7,600 61.4% Jun-15 Obligations Buy bids 384,766 2,017,412 187,357 9.3% 1,830,054 90.7% Sell offers 180,141 553,702 102,726 18.6% 450,976 81.4% Options Buy bids 12,429 352,799 7,999 2.3% 344,800 97.7% Sell offers 11,041 57,100 15,172 26.6% 41,928 73.4% Jul-15 Obligations Buy bids 427,398 1,909,109 208,278 10.9% 1,700,831 89.1% Sell offers 185,213 575,921 111,179 19.3% 464,742 80.7% Options Buy bids 16,004 432,537 9,019 2.1% 423,517 97.9% Sell offers 14,202 52,274 15,790 30.2% 36,483 69.8% Aug-15 Obligations Buy bids 379,565 1,624,183 174,941 10.8% 1,449,242 89.2% Sell offers 147,217 405,601 92,842 22.9% 312,759 77.1% Options Buy bids 14,473 421,949 8,971 2.1% 412,978 97.9% Sell offers 12,307 46,856 12,875 27.5% 33,981 72.5% Sep-15 Obligations Buy bids 416,971 2,241,148 249,881 11.1% 1,991,267 88.9% Sell offers 146,522 420,845 86,461 20.5% 334,385 79.5% Options Buy bids 12,489 387,724 9,252 2.4% 378,472 97.6% Sell offers 11,516 48,013 12,315 25.6% 35,698 74.4% 2014/2015* Obligations Buy bids 3,360,128 21,777,160 2,2...
Manual 6. Financial Transmission Rights” Revision 16 (June 1, 2014), p. 56. • The MMU recommends that PJM eliminate portfolio netting to eliminate cross subsidies among FTR marketplace participants. (Priority: High. First reported 2012. Status: Not adopted. Pending before FERC.) • The MMU recommends that PJM eliminate subsidies to counter flow FTRs by applying the payout ratio to counter flow FTRs in the same way the payout ratio is applied to prevailing flow FTRs. (Priority: High. First reported 2012. Status: Not adopted.) • The MMU recommends that PJM eliminate geographic cross subsidies. (Priority: High. First reported 2013. Status: Not adopted.) • The MMU recommends that PJM improve transmission outage modeling in the FTR auction models. (Priority: Low. First reported 2013. Status: Adopted partially, 14/15 planning period.) • The MMU recommends that PJM reduce FTR sales on paths with persistent overallocation of FTRs including clear rules for what defines persistent overallocation and how the reduction will be applied. (Priority: High. First reported 2013. Status: Adopted partially, 14/15 planning period.) • The MMU recommends that PJM implement a seasonal ARR and FTR allocation system to better represent outages. (Priority: Medium. First reported 2013. Status: Not adopted.) • The MMU recommends that the basis for the Stage 1A assignments be reviewed and made explicit, that the role of out of date generation to load paths be reviewed and that the building of the transmission capability required to provide all defined Stage 1A allocations be reviewed. (Priority: High. First reported 2013. Status: Not adopted.) • The MMU recommends that PJM apply the FTR forfeiture rule to up to congestion transactions consistent with the application of the FTR forfeiture rule to increment offers and decrement bids. (Priority: High. First reported 2013. Status: Not adopted. Pending before FERC.) • The MMU recommends that PJM examine the mechanism by which self scheduled FTRs are allocated when load switching among LSEs occurs throughout the planning period. (Priority: Low. First reported 2011. Status: Not adopted.)