PJM announced publicly earlier this week that it intended to reorganize its market monitoring function, and was leaning toward securing an external market monitor to replace its long standing internal market monitoring unit. PJM has been unique among U.S. regional power markets in lacking an external monitor or any official outside market adviser.
Perhaps exemplifying the famous line from the song “Me and Bobby McGee” (Freedom’s just another word for nothing left to lose), at FERC’s conference on market monitoring Joe Bowring, the chief of PJM’s internal market monitoring unit, charged PJM’s management with excessive interference in the performance of the market monitor’s task. In the formal statement filed in the docket, Bowring said:
PJM has made it clear that, from management’s perspective, the market monitor is first an employee of PJM with all the duties of an employee including obeying management orders, i.e. following the chain of command. I do not believe that this is consistent with independence of market monitoring or with meeting the tariff defined objectives of market monitoring. PJM management has taken a series of actions towards the MMU which I believe are inconsistent with independence and with the objectives of the MMU as defined in the tariff. As examples, these include ordering me to modify the State of the Market Report, preventing me from making a presentation to a membership committee on the exemption of certain interfaces from mitigation when PJM management disagreed with my analysis and delaying the release of an MMU report regarding the regulation market based on management disagreements with our conclusions.
FERC’s conference on market monitoring included a lot of discussion of independence – what is is, why it is wanted, how to get it, and so on. Clearly PJM’s management and PJM’s market monitor now agree that the regional power market must reorganize its market monitoring function. State government officials and some market participants had publicly complained about a lack of independence at the internal unit, but several state government officials jointly responded to PJM’s announcement by opposing a move to a purely external monitoring unit. In a letter sent to PJM and filed with FERC, the state officials indicated a preference for an internal monitor reporting directly to the board and with other safeguards to protect the unit’s independence. I expect that we’ll hear much more about the who-what-and-where of independent market monitoring in the weeks and months ahead.
Two resources for you if you’d like to study up on the issue. For the next few months the webcast video from Thursday’s technical conference on market monitoring will be archived (find the April 5 conference date in the list). You can retreive documents filed in FERC’s docket on market monitoring policies by going to the FERC’s document search form, entering the docket number (AD07-8), and click on Search.
To save you a few steps, however, try this pre-programmed search link. On the search results page, I generally find it easiest to right-click on the file type link (“PDF”, “Word”, etc.), save the document to my computer, and open it locally.