PJM Files Status Update, No Tariff Language, on RPM New Entry Price Adjustment

Parties expecting PJM to file tariff language yesterday for a New Entry Price Adjustment in the Reliability Pricing Model received only a status report, as PJM said it requires more time to address NEPA issues and build consensus (ER11-2875).

The NEPA provides a new entry project, in certain narrow circumstances, assurance that it will receive its "new entry" price (the clearing price from the first year the new plant decides to enter a constrained area) for two additional years. Stakeholders have been examining lengthening this adjustment to incent new build, especially as an alternative to state-sponsored projects which FERC will not allow to bid below the minimum offer price.

PJM said that a logical date for proposing NEPA tariff changes would be November 30, coincident with the date of a four-year assessment of RPM, but did not propose the date as a specific deadline.

PJM said that the NEPA stakeholder process has been "productive," with stakeholders identifying possible changes to the NEPA provision itself, as well as, "creative alternatives with broader impacts, such as supplemental RPM auctions, that are intended to provide long-term revenue support for new entry, avoid undue discrimination, and advance other identified interests, such as preventing unintended effects of the revised MOPR [minimum offer price rule] on legitimate new entry."

However, "the level of support for these alternatives remains to be seen," PJM conceded.