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Commissioner Moeller Statement
September 4, 2015
Docket No. ER15-952-000
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New Jersey Energy Associates Petition For Waiver

“After recognizing that certain aspects of PJM’s current market construct may be unjust and unreasonable and initiating a proceeding under section 206(b) of the Federal Power Act based, in part, on circumstances nearly identical to those here,1 the majority is unwilling to provide appropriate relief to ensure that NJEA recovers the costs that it incurred to maintain system reliability during the extraordinary cold weather events of 2014.2

“As I explained in previous dissenting statements,3 PJM is the only regional transmission organization that does not allow market participants to submit day-ahead offers that vary by hour or to update their offers in real time, including in emergency situations. This inflexibility contributed to the inability of generation units, like those of NJEA, to recover legitimate fuel costs incurred during the polar vortex of January 2014. PJM recognizes the need to provide cost recovery and supports granting NJEA’s waiver request. However, the majority once again fails to apply its own standard for considering tariff waivers and instead relies on a faulty interpretation of the prior notice rule and prohibition against retroactive ratemaking to reject NJEA’s request. At the very least, this matter should have been set for hearing and settlement judge procedures to consider potential avenues for amicably resolving this dispute and providing appropriate compensation to NJEA.

“In expressing its support for NJEA’s waiver request, PJM stated that “PJM cannot sustain long term reliable operations if generation owners and operators hesitate to comply with dispatch instructions because they fear they will incur costs they cannot recover under the Tariff or Operating Agreement.”4 Generators in PJM need to recover their fuel costs to ensure that they are able to provide service during emergency conditions. In response to the Commission’s initiation of a proceeding under section 206(b), PJM has conceded that reforms to its market construct are needed, but contends that they cannot be implemented until November 1, 2016.5 In light of this delay in reforming PJM’s markets, the majority’s repeated failure to guarantee cost recovery for generators acting in good faith to ensure system reliability may regrettably impact reliability during the approaching winter of 2015-2016.

“Accordingly, I respectfully dissent in part.”

                                               

    1Duke Energy Corp., 151 FERC ¶ 61,206, at P 73 (2015) (Moeller, Comm’r, dissenting in part).
    2 While I support the Commission’s finding that the South River CC is a pool scheduled resource eligible for start-up cost recovery under section 1.10.2, NJEA has made clear that this finding would allow it to recover only a fraction of its costs.
    3The Commission has failed to grant similar relief in other matters. Duke Energy Corp., 151 FERC ¶ 61,206; Old Dominion Electric Cooperative, 151 FERC ¶ 61,207 (2015) (Moeller, Comm’r, dissenting).
    4PJM February 20, 2015 Comments, Docket No. ER15-952-000, at 4.
    5PJM July 10, 2015 Report, Docket No. EL15-73-000, at 1-2.