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Commissioner Tony Clark Statement
July 22, 2015
Docket Nos. ER15-623-002, EL15-29-001, EL15-41-001, and EL15-80-000 PDF

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PJM’s Capacity Performance Transition Incremental Auction

“I dissent from today's order as a matter of procedure, policy, and reflection of current uncertainty surrounding Order No. 745.

“Procedurally, I note that nothing has changed since June 9, 2015 when the Commission conditionally accepted PJM Interconnection, L.L.C's (PJM) Capacity Performance (CP) filing (Capacity Performance Order), except for the passage of a brief amount of time.1 In the Capacity Performance Order, the Commission approved clear and unambiguous language in Attachment DD, section 5.14D(B)(3) of PJM's Open Access Transmission Tariff, that the only type of CP Resource eligible to participate in a Transition Incremental Auction is a Generation Capacity Resource, implicitly acknowledging that decision to be a just and reasonable outcome. No new information has subsequently been presented to change this determination. Therefore, as indicated by PJM, this complaint is clearly a late-filed collateral attack by parties that had more than ample opportunity to raise such concerns in the proper venue.2

“As a matter of policy, despite the conclusions reached in today's order, PJM's decision to design the Transition Incremental Auction methodology as it did was neither an oversight, nor a haphazard result.3 Rather, PJM's rationale for limiting Transition Incremental Auctions to Generation Capacity Resources was a deliberate action treating what are differently situated resources differently (namely the nature of capital investments in traditional generation resources versus the nature of demand response resources). PJM has been both consistent and clear on this position from the initial CP transmittal letter submitted in December 2014 through all subsequent correspondence in the official Commission record.4

“This being the case, complainants cannot possibly have met their burden under section 206 of the Federal Power Act, which they claim to have accomplished so soon after the original Capacity Performance Order. I stress that it is not PJM's burden to now prove that an already agreed on Transition Incremental Auction methodology is just and reasonable. Rather, it is complainants' burden to explain why now, just weeks after the Commission's Capacity Performance Order and just days before the first Transition Incremental Auction, the plain tariff reading of Attachment DD, section 5.14D(B)(3) is unjust and unreasonable.

“Finally, the Commission should exercise greater discretion given the current legal uncertainties involving Order No. 745 and demand response participation in capacity markets as currently designed.4 Rather than proclaiming, "damn the torpedoes, full speed ahead!" I would prefer a modest approach whereby we avoid buying ourselves more potential trouble and refrain from actively adding more demand response megawatts into PJM's capacity construct while it faces an uncertain future and possible disorderly 'unwinding.' While the pendency of Order No. 745 is not alone dispositive,it should cause us to proceed more cautiously than we are doing here.

“For these reasons, I respectfully dissent from this order.”

                                                       
1PJM Interconnection, L.L.C., 151 FERC ¶ 61,208 (2015) (Capacity Performance Order).

2See PJM answer at P 11.

3See See Order at P 39.

4See PJM answer at PP 7-8 (citing to Transmittal Letter at P 28).

4Electric Power Supply Ass’n v. FERC, 754 F.3d 216 (D.C. Cir. 2014) (“EPSA”).