Many thanks to all of the attendees and sponsors of NEM's New England Energy Policy Summit last week in Cambridge, Massachusetts. It was a successful event, gathering thought leaders, policy officials, leading energy suppliers and technologists to discuss the convergence of energy, telecom and digital technologies. A Press Release on the NEM event is hotlinked here.

We have also posted many of the speaker presentations that were made available to us. The presentations of Professor William Hogan, NYISO Sr. VP Rana Mukerji, ISONE VP Anne George and DCPSC Chairman Betty Ann Kane are available on the NEM Website.

The Commission issued an Order rejecting a complaint filed by Champion Energy against PJM related to actions taken during the polar vortex. Champion's complaint objected to PJM’s allocation of real-time Balancing Operating Reserve (BOR) charges to it for the month of January 2014 under PJM's OATT, and it sought a waiver of the applicable Tariff provisions and a refund in the amount of $3,130,125, plus interest. The Commission denied the complaint reasoning that,

"Champion asserts that during January 2014 it hedged 98.75 percent of its load before the real-time market and was actually long on some days, but was still assessed BOR charges. Champion argues that because it almost entirely supplied its load in January 2014, the application of PJM’s Tariff provisions to allow BOR charges to Champion is unjust and unreasonable. We find that Champion’s argument that its forward contracts absolve it from responsibility for any real-time BOR charges does not constitute grounds to find the relevant Tariff provisions, or PJM’s application of those provisions, unjust and unreasonable. Despite the fact that Champion was long on an aggregate daily basis, as a load serving entity with real-time load, Champion participates with other customers as part of an integrated grid and therefore relies on PJM to assure that its transactions can be delivered as scheduled. Champion, like all PJM customers, therefore relies upon, and benefits from, PJM’s actions to maintain grid reliability. PJM’s real-time BOR charges are driven by resource commitment and dispatch decisions made to ensure that power flows reliably in real-time. As such, PJM’s actions that caused real-time BOR costs in January 2014 benefited all real-time load, including Champion, by ensuring the continued operation and reliability of the system."

Commissioner Moeller dissented from the Commission's Order. Moeller argued,

"Allowing PJM’s current BOR cost allocation to continue harms market participants like Champion and decreases the efficiency of PJM’s markets. Allocating costs broadly to load-serving entities like Champion unfairly frustrates their efforts to hedge their positions; it does not ensure that the market participants who actually caused those uplift costs pay corresponding charges. The Commission defends PJM’s current allocation of BOR costs to load-serving entities like Champion – notwithstanding the record here and in the price formation proceeding – stating that “BOR charges are driven by resource commitment and dispatch decisions” and that “PJM’s actions that caused real-time BOR costs in January 2014 benefited all real-time load, including Champion.” The fact that Champion benefits from grid reliability does not indicate that their actions caused the uplift costs it was forced to bear. Champion and other load-serving entities should only be allocated uplift costs on the basis of those benefits when the parties who caused those costs cannot be identified. PJM’s failure to fully identify those cost causers renders its uplift allocation unjust and unreasonable."

The full text of the Order is available on the NEM Website.