A Federal Energy Regulatory Commission administrative law judge will oversee settlement discussions aimed at resolving 13 complaints seeking to overturn or reduce at least some of the $1.8 billion in charges imposed by the PJM Interconnection against generators that failed to perform during Winter Storm Elliott last year.
“Given PJM’s interest in finding a resolution to the issues raised in these proceedings — along with parties’ general collective willingness to engage in settlement procedures — we find that these procedures are a reasonable first step,” FERC said in a decision released Monday.
PJM, the largest U.S. grid operator, levied $1.8 billion in nonperformance charges after nearly a quarter of the capacity in its footprint didn’t run during certain hours in late December. Generators that overperformed in those periods stand to receive a share of the fines.
In response, Calpine, Energy Harbor, Invenergy, LS Power and other companies filed complaints with FERC arguing the nonperformance charges are unjust because PJM made forecasting mistakes, exported power to other regions and imposed fines against generators that weren’t dispatched or scheduled, among other things.
Energy Harbor, for example, faces a $12.2 million charge related to its coal-fired Sammis power plant in Stratton, Ohio, according to the company’s complaint.
Companies such as Constellation Energy, Public Service Enterprise Group and Vistra asked FERC to reject the complaints and uphold the fines.
Resolving the complaints through settlement discussions could avoid years of litigation and market uncertainty, Calpine and others said in support of the talks.
In approving PJM’s request for settlement procedures, FERC declined Vista’s request that it issue an interim order providing guidance and a legal framework for the discussions.
Parties have 60 days to reach an agreement after a settlement judge is appointed to oversee the talks. The deadline can be extended by 30 days if the judge determines that progress is being made.
FERC did not put the pending complaints on hold, saying that responses may help advance the settlement talks. The commission, however, won’t address the complaints until the settlement discussions are over.