Last week, Deputy Public Advocate Ruth Ann Price attended PJM’s Annual Meeting in Cambridge, Maryland. Below are highlights from the RTO Insider article with the comments of Ms. Price and the Consumer Advocates of the PJM States, Inc. (“CAPS”).
“Getting oversight is critical,” said Ruth Ann Price, Delaware Deputy Public Advocate, during the Public Interest & Environmental Organizations User Group’s meeting with the RTO last week. “PJM must decide with some urgency whether it wants to create a department internally [to oversee] FTRs or have this function go outside to a third party.”
Restructuring FTR rules remains a paramount stakeholder task after an independent probe identified the shortcomings in PJM’s market design and internal culture that allowed a small trading shop, GreenHat Energy, to amass the largest portfolio of FTRs in PJM history without the collateral to back it up. (See Report: ‘Naive’ PJM Underestimated GreenHat Risks.) The 890 million MWh default could wind up costing PJM more than $430 million, former CFO Suzanne Daugherty told stakeholders in January. (See PJM: FERC Order Could Boost GreenHat Default by $300M.)
“This is something that is totally out of the realm of consumers, but yet and still, they will pay the burden of this debacle,” Price said. “For PJM to continue this market, there need to be cultural changes in PJM that understand the oversight necessary.”
Price emphasized the need to fill Daughtery’s vacant CFO position and find a qualified chief risk officer — as recommended in the GreenHat report — sooner rather than later, preferably before the August capacity auction. She also encouraged PJM to expand the Independent Market Monitor’s authority to include regulation and monitoring of FTRs.
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