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PJM Files Proposed Winter Storm Elliott Settlement With FERC

The PJM Interconnection and 80 other settling parties on Sept. 29 filed a settlement package with the Federal Energy Regulatory Commission to comprehensively resolve 15 separate FERC complaints regarding extraordinary non-performance charges resulting from Winter Storm Elliott in December 2022.

The settling parties requested that FERC approve the settlement no later than Dec. 29, 2023.

The proposed settlement is a result of expedited talks requested by PJM and approved by FERC.

“It is a product of collaboration among PJM and a significant number of diverse market participants -- including complainants, intervenors who are net non-performance-charge payors, intervenors who have zero assessed non-performance charges, and intervenors who are net-performance payment recipients -- that either support the settlement or do not oppose it,” PJM said.

Under the terms of the proposed settlement, swift resolution of the complaints relating to Winter Storm Elliott supports continuing reliable operations, confidence in PJM energy markets and overall generation fleet resilience, the settling parties told FERC.

Proposed settlement terms include:

  • Market-wide reduction in non-performance charge assessments, which reduces performance payments;
  • Review of PJM credit requirements and return of collateral consistent with the PJM tariff;
  • Resolution of all allegations regarding PJM operations lodged before FERC in the Winter Storm Elliott complaints, with the exception of two matters that are not central to PJM operations during the event;
  • No admission by PJM to any violation of the PJM tariff or any other wrongdoing

Based upon FERC action on a waiver and the filing of the settlement, PJM will pause billing of the remaining, unbilled non-performance charges and concurrent disbursement of payments to suppliers that over-performed during storm events.

These changes are expected to take effect in the October billing cycle.

The proposed settlement does not resolve capacity market design issues recognized during Winter Storm Elliott.

PJM and its stakeholders have been discussing additional changes to capacity market rules as communicated in a letter from the PJM Board of Managers dated Sept. 27, 2023.

A final report on Winter Storm Elliott was presented to FERC Commissioners on Sept. 21.

The report recommends completion of cold weather reliability standard revisions stemming from 2021’s Winter Storm Uri and improvements to reliability for U.S. natural gas infrastructure.

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