Major In response to FERC Order 719,1 RTOs reviewed, and in some cases revised, their pricing for periods when available supply cannot meet both energy and operating reserve requirements. For example, PJM has a compliance filing pending before the FERC which aims to create jointly co-optimized operating reserve and energy markets and incorporate operating reserve penalty factors to reflect value of energy to consumers during shortage periods (Attachment G). The filing led to a counter proposal by the Independent Market Monitor (IMM) for the PJM region. The IMM's proposes creation of resource specific pricing during an operating reserve shortage and preservation of a $1,000/MWh price ceiling (Attachment H). Other parties proposed variations on one or both of these proposals through comments in the case. For example, the Public Utilities Commission of Ohio (PUCO) proposed a middle ground position (Attachment I). Among other things, the PUCO proposes making payment of scarcity revenues dependant on whether: 1) the resource had been accepted in PJM's forward capacity markets, 2) the resource had made a competitive offer in PJM's Day-Ahead Market; and 3) PJM had committed the resource in the Day-Ahead Market. This case is currently pending before the FERC with a decision anticipated in 2011.
For details, see
http://www.oasis-open.org/committees/download.php/40642/Centolella-%20Comments%20on%20EMIX%20Product%20Specification%20Standard%20complete%20FINAL.zip