955 Jefferson Avenue
Valley Forge Corporate Center
Norristown, PA 19403-2497
Jacqulynn Hugee
Assistant General Counsel - Markets
Telephone 610.666.8208 | Facsimile 610.666.8211
hugeej@pjm.com
May 10, 2011
Honorable Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426-0001
Re:
PJM Interconnection, L.L.C., Docket No. ER11-12-001 (Compliance Filing)
(Docketed Under ER11-3445-000.)
Dear Secretary Bose:
PJM Interconnection, L.L.C. ("PJM") hereby submits the instant errata filing to
correct a typographical error in a compliance filing submitted on April 27, 2011 in
Docket No. ER11-3445-000 to (a) confirm that it’s proposed revisions to Section 1.2A.2
of Schedule 1 of the Amended and Restated Operating Agreement of PJM
Interconnection, L.L.C. (“Operating Agreement”), as well as the parallel provisions of
the Appendix to Attachment K of the PJM Open Access Transmission Tariff (“Tariff”),
Part I, Section 3F.2 of the Tariff and Section 14A.2 of the Operating Agreement,
calculates and charges for losses that occur on all transmission facilities that PJM
operates and controls, and (b) verify that it will model its marginal losses consistent with
PJM Manual 3A. Specifically, PJM neglected to insert the word “not” in a sentence on
page 7 of its transmittal letter. Thus, with this errata PJM submits a corrected
transmittal letter to change the referenced sentence so that it reads: “Nor are there any
transmission facilities within PJM’s control that it does not include in its Real-Time
Reliability Model.”
Please direct any questions regarding this filing to the undersigned.
Respectfully submitted,
/s/ Jacqulynn B. Hugee
Jacqulynn B. Hugee
ATTACHMENT A
955 Jefferson Avenue
Valley Forge Corporate Center
Norristown, PA 19403-2497
Jacqulynn Hugee
Assistant General Counsel - Markets
Telephone 610.666.8208 | Facsimile 610.666.8211
hugeej@pjm.com
April 27, 2011
Honorable Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426-0001
Re:
PJM Interconnection, L.L.C., Docket No. ER11-12-001 (Compliance Filing)
(Corrected) (Docketed Under ER11-3445-000.)
Dear Secretary Bose:
Pursuant to the Federal Energy Regulatory Commission’s (“Commission”) Order
on Proposed Tariff Provisions issued on March 30, 2011,1 PJM Interconnection, L.L.C.
(“PJM”) submits this compliance filing to (a) confirm that it’s proposed revisions to
Section 1.2A.2 of Schedule 1 (“Schedule 1”) of the Amended and Restated Operating
Agreement of PJM Interconnection, L.L.C. (“Operating Agreement”), as well as the
parallel provisions of the Appendix to Attachment K of the PJM Open Access
Transmission Tariff (“Tariff”),2 Part I, Section 3F.2 of the Tariff and Section 14A.2 of the
Operating Agreement, calculates and charges for losses that occur on all transmission
facilities that PJM operates and controls, and (b) verify that it will model its marginal
losses consistent with PJM Manual 3A.
1
PJM Interconnection, L.L.C., 134 FERC ¶ 61,246 (2011) (“March 30th Order”).
The referenced provisions are found in Schedule 1 of the Operating Agreement and the Attachment K Appendix of the PJM Tariff. All further references in this transmittal letter to referenced sections in
Schedule 1 shall only be made to the Operating Agreement provisions, without reference to the parallel Tariff
provisions. Capitalized terms used and not otherwise defined herein have the meaning set forth in the
Operating Agreement and Tariff.
2
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 2
I.
Introduction and Background
As PJM advised in a filing in this docket submitted on October 1, 2010 (“October
Filing”), PJM and its stakeholders sought to make improvements to the calculation of
marginal losses on transmission lines in the PJM Region since the method of
calculation was implemented on June 1, 2007. The PJM Markets and Reliability
Committee formed the Marginal Losses Working Group (later renamed the Marginal
Losses User Group - “MLUG”) on November 14, 2007 to evaluate the implementation
of the marginal losses calculation and recommend any necessary enhancements
thereto.3
The MLUG’s evaluation revealed a significant disparity in the impacts of
marginal loss calculations across the various transmission zones due to the fact that
varying levels of lower voltage level transmission and distribution facilities were included
in the PJM network model in different zones. The result of this variation was a lack of
common requirements for transmission owners to use to determine which transmission
facilities should be included in the system model. A further consequence of allowing
this variation was the potential inequity in loss price results for generators due to PJM
calculating the applicable LMP at generator terminals on the “low side” of GSUs while
many of the generators measure their output on the “high side” of GSUs for purposes of
revenue metering.4
To address this issue, in its October Filing PJM proposed revisions to the
identical provisions of Section 3F.2 of Part I of the PJM Tariff, Section 14A.4 of the
Operating Agreement and Section 1.2A.2 of Schedule 1 of the Operating Agreement to
3
October Filing at 5.
4
Id. at 6-7.
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 3
modify the calculation of marginal losses by eliminating from the loss model all lower
voltage facilities that PJM does not control or operate for congestion or reliability, as
well as GSUs that are measured on the “high side” which the Market Seller owning or
controlling that GSU has requested be removed from the loss calculation.5
The Commission issued the March
30th Order conditionally accepting the
revisions proposed by PJM in its October Filing, subject to PJM making an additional
compliance filing to clarify whether PJM will “calculate and charge for losses that occur
on all transmission facilities that it operates and controls”6 because the Commission
could not determine from PJM’s filing “whether there are any facilities that PJM
operates and controls that are not monitored.”7 Thus, the Commission mandated that
PJM submit a compliance filing within 30 days of the date of the March 30th Order to
“either (i) confirm that under its proposed tariff revisions, PJM would calculate and
charge for losses that occur on all transmission facilities that it operates and controls,
(ii) verify that PJM will model its marginal losses consistent with Manual 3A, or (iii)
explain why it is not feasible for otherwise reasonable to do so.”8 is This compliance filing
being submitted in response to the Commission’s directives.
5
Id. at 10.
6
March 30th Order at P 17.
7
Id. at n 29.
8
Id. at PP 17, 25.
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 4
II.
Description of Proposed Revisions
A.
PJM Will Calculate and Charge for Losses On all Transmission
Facilities that it Operates and Controls.
There are no transmission facilities in the PJM Region that PJM operates and
controls but does not monitor. Stated another way, PJM monitors all transmission
facilities in the PJM Region that it operates and controls.
In the October Filing, PJM advised that its proposed revisions to Section 3F.2 of
Part I of the Tariff, Section 14A.4 of the Operating Agreement and Section 1.2A.2 of
Schedule 1 of the Operating Agreement would “limit the number of facilities that are
incorporated into the calculation of marginal losses to the subset of facilities in the State
Estimator that are controlled or operated by PJM, at whatever voltage levels they may
be.”9 The revisions that PJM proposed, and which the Commission conditionally
accepted, were as follows:
Whenever in this Tariff transmission losses are included in the
determination of a charge, credit, load (including deviations), or
demand reduction, it is explicitly so stated and such included losses
shall be those losses incurred on (a) Reliability Monitored fFacilities
and (b) any generator step-up transformers that the Market Seller
has not elected to remove from the loss calculation, which are
included in the PJM network model and determined by, and reflected in,
the PJM State Estimator. Absent such explicit statement, such losses
are not included in the determination.
The Commission agreed with PJM that “PJM should discontinue calculating and
charging for losses that occur on facilities that it does not operate and control. Losses
on these facilities are properly within the purview of the entities that operate and control
9
October Filing at 13.
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 5
these facilities.”10 However, the Commission opined that “it is not clear that PJM would
calculate and charge for losses that occur on all transmission facilities that it operates and
controls.”11
Therefore, the Commission required that PJM “confirm that under its
proposed tariff revisions, PJM would calculate and charge for losses that occur on all
transmission facilities that it operates and controls.”12
PJM refers to the transmission facilities that it controls and operates as Reliability
Monitored Facilities. Reliability Monitored Facilities are defined in Section 1.38B of Part
I of the Tariff as the combined set of “PJM Markets Facilities and PJM Reliability
Facilities that are under PJM's control for coordinating regional and interregional
operations.” PJM Markets Facilities are defined in Section 1.32D.01 of Part I of the
Tariff as: “Those facilities which are both monitored in the PJM Energy Management
System and included in the Locational Marginal Price calculations for congestion
management.” PJM Reliability Facilities are defined Section 1.32E.01 of Part I of the
Tariff as: “Those facilities which are monitored as part of the NERC bulk electric system
set of facilities but are not included in the Locational Marginal Price calculations for
congestion management.”
PJM hereby confirms that in Section 3F.2 of Part I of the Tariff, Section 14A.4 of
the Operating Agreement and Section 1.2A.2 of Schedule 1 of the Operating
Agreement, wherein it states that “[w]henever in this Tariff transmission losses are
included in the determination of a charge, credit, load (including deviations), or demand
reduction, it is explicitly so stated and such included losses shall be those losses incurred
10
March 30th Order at P 17.
11
Id. at PP 17, 25.
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 6
on (a) Reliability Monitored Facilities,” contemplates that PJM will calculate and charge
for marginal losses on all transmission facilities that it controls and operates. This has
always been the case and PJM has not sought to change this practice with its proposed
revisions. PJM’s proposed revisions sought to remove from the calculation of marginal
losses facilities that PJM does not monitor and control, not to remove from the
calculation losses on any transmission facilities that it does monitor and control.
B.
PJM Will Model Marginal Losses Consistent with Manual 3A.
In its October Filing, PJM stated that its proposed revisions were “intended to
provide consistent treatment of facilities that PJM operates for congestion management
and reliability and facilities that it prices for transmission losses, reflects a subset of the
elements identified as transmission facilities by Transmission Owners in FERC Form 1
submissions and transmission revenue requirements, and relies on the established
process documented in PJM Manual 3A for the inclusion of transmission elements as
monitored facilities.”13 Because it was not clear to the Commission “whether PJM will be
modeling all transmission facilities within its control”14 or “whether there are any
facilities that PJM operates and controls that are not monitored,”15 in the March 30th
Order the Commission required that PJM submit a compliance filing to indicate whether it
“will model its marginal losses consistent with Manual 3A.”16
12
Id.
13
October Filing at 14-15.
14
March 30th Order at P 25.
15
Id. at n. 29.
16
Id.
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 7
PJM Manual 3A, entitled “Energy Management System (EMS) Model Updates and
Quality Assurance (QA),” describes the specific processes and procedures utilized in
updating and verifying the PJM EMS model (also referred to as the PJM Real-Time
Reliability Model). The PJM Real-Time Reliability Model “is a computer representation of
the power system facilities in the PJM RTO and other Control Areas that may impact the
reliable operation of the PJM system.”17
PJM reiterates that there are no transmission facilities in the PJM Region that
PJM operates and controls but does not monitor. Nor are there any transmission
facilities within PJM’s control that it does not include in its Real-Time Reliability Model.
Manual 3A specifically states that PJM’s EMS Model/Real-Time Reliability Model
models all “facilities defined by the RFC and SERC definition of the Bulk Electric
System,” “all electric facilities defined as part of PJM’s Congestion Management (aka
Reliability & Markets) program, as well as, other facilities as required to ensure reliable
and economic operation”18 that are located in the PJM Region and “for which PJM
serves as NERC Reliability Coordinator.”19
Based on the foregoing, PJM verifies for the Commission that it will model
marginal losses on all transmission facilities in the PJM Region that it operates and
controls consistent with PJM Manual 3A.
17
PJM Manual 3A, Revision 6 at 7.
18
Id. at 4 and 7.
19
Id. at 7.
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 8
III.
Conclusion
PJM respectfully requests that the Commission accept the enclosed
explanations as fully complying with the Commission’s directives in the March 30th
Order.
IV.
Correspondence
The following individuals are designated for inclusion on the official service list in
this proceeding and for receipt of any communications regarding this filing:
Jacqulynn B. Hugee
Assistant General Counsel-Markets
PJM Interconnection, L.L.C.
955 Jefferson Avenue
Norristown, Pennsylvania 19403
(610) 666-8208
hugeej@pjm.com
Frederick S. Bresler III
Vice President, Market Operations &
Demand Response
PJM Interconnection, L.L.C.
955 Jefferson Avenue
Norristown, Pennsylvania 19403
(610) 666-8942
bresler@pjm.com
Craig Glazer
Vice President, Federal Government Policy
PJM Interconnection, L.L.C.
1200 G Street, N.W, Suite 600
Washington, D.C. 20005
(202) 423-4743
glazec@pjm.com
V.
Service
PJM has served a copy of this filing on all PJM Members and on all state utility
regulatory commissions in the PJM Region by posting this filing electronically. In
accordance with the Commission’s regulations,20 PJM will post a copy of this filing to
the FERC Filings section of its Web site, located at http://www.pjm.com/documents/
ferc-manuals/ferc-filings.aspx, with a specific link to the newly-filed document, and will
20
See 18C.F.R §§ 35.2(e) and 385.2010(f)(3).
Honorable Kimberly D. Bose, Secretary
Docket No. ER11-12-001
May 10, 2011
Page 9
send an e-mail on the same date this filing is made to all PJM Members and all state
utility regulatory commissions in the PJM Region21 alerting them of the filing and its
availability on PJM’s Web site. PJM also serves the parties listed on the Commission’s
official service list for this docket. Notwithstanding the foregoing, if the document is not
immediately available by using the referenced link, it will be available within 24 hours of
the filing. A copy of this filing will also be available on the Commission’s eLibrary Web
site located at http://www.ferc.gov/docs-filing/elibrary.asp in accordance with the
Commission’s regulations and Order No. 714.
Respectfully submitted,
/s/ Jacqulynn B. Hugee
Jacqulynn B. Hugee
Assistant General Counsel - Markets
PJM Interconnection, L.L.C.
955 Jefferson Avenue
Norristown, Pennsylvania 19403
(610) 666-8208
hugeej@pjm.com
PJM already maintains updates and regularly uses e-mail lists for all PJM members and affected state
commissions.
21