UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Transcription

1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION DC Energy, LLC ) Complainant, ) ) v. ) Docket No. EL ) PJM Interconnection, L.L.C., ) Respondent. ) ANSWER OF PJM INTERCONNECTION, L.L.C. PJM Interconnection, L.L.C. ( PJM ), pursuant to Rule 213 of the rules of the Federal Energy Regulatory Commission ( Commission ), 1 and the Commission s June 6, 2018 Notice of Complaint, 2 submits this answer to the June 4, 2018 complaint of DC Energy, LLC ( DC Energy ). 3 The Complaint requests that the Commission (i) find that PJM s existing collateral and capitalization requirements for participants in PJM s Financial Transmission Rights 4 ( FTR ) auctions are unjust and unreasonable and (ii) direct PJM to submit Tariff revisions to reflect revised FTR collateral and minimum capitalization requirements. The Complaint seeks fast-track processing under Commission Rules 206(b) and 206(h) C.F.R DC Energy, LLC v. PJM Interconnection, L.L.C., Notice of Complaint, Docket No. EL (June 6, 2018). 3 Complaint of DC Energy, LLC, Docket No. EL (June 4, 2018) ( Complaint ). 4 All capitalized terms that are not otherwise defined herein have the meaning as defined in the PJM Open Access Transmission Tariff ( Tariff ), Amended and Restated Operating Agreement of PJM Interconnection, L.L.C. ( Operating Agreement ), and Reliability Assurance Agreement Among Load Serving Entities in the PJM Region ( RAA ).

2 For the reasons set forth below, the Commission should deny the Complaint. At a minimum, the Commission should defer any action on the Complaint pending the conclusion of ongoing discussions in the PJM stakeholder process considering Tariff revisions that would address the credit issues presented in the Complaint. Although PJM concurs that deference by the Commission to an open-ended stakeholder process would not necessarily be prudent, given the near term potential resolution and filing of certain credit reforms which PJM expects to file by August 1, 2018, the Commission should avoid addressing the requested reforms without the benefit of that stakeholder work and a filing by PJM pursuant to Federal Power Act, section 205. Finally, any resulting Tariff revisions should be implemented prospectively potentially with reasonable transition rules; the Commission should reject as contrary to law the Complaint s request for a refund effective date coincident with the filing date of the Complaint. There is no basis for changing the outcomes of FTR auctions completed since the filing date of the Complaint. 2

3 I. NOTICES AND COMMUNICATIONS be directed to: All correspondence and other communications regarding this proceeding should Craig Glazer Vice President Federal Government Policy PJM Interconnection, L.L.C G Street, N.W., Suite 600 Washington, D.C (202) (phone) (202) (fax) Craig.Glazer@pjm.com Jacqulynn Hugee Associate General Counsel PJM Interconnection, L.L.C Monroe Blvd. Audubon, PA (610) (phone) (610) (fax) Paul M. Flynn Jeffrey G. DiSciullo Wright & Talisman, P.C G Street, N.W., Suite 600 Washington, D.C (202) (phone) (202) (fax) flynn@wrightlaw.com disciullo@wrightlaw.com II. INTRODUCTION AND OVERVIEW The Complaint alleges that immediate Commission action is required to modify PJM s FTR collateral and minimum capitalization requirements. The Complaint cites the potential default risks associated with open FTR portfolios and concludes that the inadequate collateral support associated with such portfolios demonstrates that PJM s existing Tariff is unjust and unreasonable. According to the Complaint, Commissiondirected Tariff revisions are required, effective as of the date of the Complaint, to remedy the alleged Tariff defects. PJM acknowledges the important issues presented in the Complaint. Establishing and maintaining adequate credit and collateral requirements for FTR bids and open FTR portfolios is critical to a properly functioning FTR market. At the same time, however, 3

4 and as the Commission has recognized, overly rigid credit requirements can limit market access and constrain competition. 5 PJM s existing Tariff provisions were developed and accepted based on a balance of these competing interests; they are intended to provide reasonable but not absolute assurances that Market Participants could never incur losses materially larger than the credit requirements for the financial positions they hold. Indeed, no reasonably balanced set of credit requirements could offer such complete, allevents guarantees and, at the same time, comply with Commission policy to avoid restrictive credit requirements. As explained below, PJM is keenly aware of the issues associated with open FTR positions. PJM has worked diligently with its stakeholders to curb exposure attributable to these positions, including recent efforts which led to the implementation of Tariff revisions tightening credit requirements for FTR portfolios. 6 5 See infra at Section IV.A; Credit Reforms in Organized Wholesale Electric Markets, Order No. 741, FERC Stats. & Regs., Regs. Preambles 31,317, at P 2 (2010), order on reh g, Order No. 741-A, FERC Stats. & Regs., Regs. Preambles 31,320, reh g denied, Order No. 741-B, 135 FERC 61,242 (2011). 6 The Complaint (at 4-7) refers to various stakeholder discussions and presentations relating to PJM s FTR credit requirements. Most notably, in December 2017, PJM sought Commission approval of Tariff revisions designed to introduce greater accuracy in the projection of congestion levels and, in turn, anticipated future FTR losses/profits, by modeling and accounting for planned system upgrades in the determination of FTR values. See Proposed Modifications to FTR Credit Requirements of PJM Interconnection, L.L.C., Docket No. ER , (Dec. 11, 2017). The Commission approved these revisions hereinafter 2018 Credit Revisions by letter order dated January 19, On June 21, 2018, PJM confirmed the payment default of GreenHat Energy, LLC ( GreenHat ), a Market Participant with a significant open FTR portfolio, and notified its Members of the same on June 22, GreenHat acquired FTR positions beginning in 2015 for the 2018/2019, 2019/2020, and 2020/2021 planning years. Based on GreenHat s FTR bids, which cleared at prices that implied the positions would be profitable, GreenHat was required to post virtually no collateral. As explained infra, it was in response to PJM s awareness of growing 4

5 More recently, and directly on point with DC Energy s first requested Credit Policy change, PJM has engaged with stakeholders to examine other potential credit/collateral reforms, including PJM s recommended $0.10 per-mwh minimum credit requirement similar to the volumetric $0.05 per-mwh minimum collateral requirement suggested in the Complaint. PJM anticipates that the volumetric minimum FTR credit requirement will be presented to the Commission in Tariff revisions expected to be filed by PJM pursuant to Federal Power Act, section 205 no later than August 1, 2018, with an October 1, 2018 requested effective date. To DC Energy s second requested change to PJM s FTR credit requirements, PJM has also been discussing with stakeholders whether to augment PJM s FTR credit requirements with references to FTR auction clearing prices subsequent to Market Participants acquiring FTR positions. FTR auction clearing prices are established no more than once a month for FTRs applicable to the current planning year and no more than once every three months for FTRs applicable to future planning years. PJM s analysis to date on this topic indicates a wide range of results on whether these infrequent FTR auction clearing price reference points are strongly indicative of the ultimate net profits or net losses on actual FTR portfolios. For example, FTR auction clearing prices when GreenHat acquired the majority of the FTR portfolio on which it has defaulted exposure associated with open FTR positions most notably, the GreenHat portfolio that PJM modified its FTR Historical Value calculation to better reflect the value of forward FTR positions affected by planned system upgrades and is also recommending member support for a minimum FTR credit requirement. Had the 2018 Credit Revisions been in place prior to GreenHat acquiring the majority of its portfolio of FTRs, PJM estimates that GreenHat would have had to provide approximately $60 million in collateral to bid on the portfolio. If the FTR credit revisions that are currently making their way through the PJM stakeholder process had been in place at that time, PJM estimates that GreenHat would have had to provide nearly $90 million in collateral. 5

6 indicated that GreenHat s portfolio would be profitable. Additionally, PJM believes that reasonable FTR credit requirements that apply to bids submitted in auctions are more effective in addressing potential FTR portfolio losses than collateral calls made after an FTR Market Participant has already acquired FTR positions. Thus, at this time, PJM s analysis has not indicated that making after-the-fact collateral calls based on infrequent FTR auction clearing prices would mitigate the risk or magnitude of potential FTR defaults on positions already acquired. PJM is also concerned such mark-to-auction credit requirements could actually result in reduced FTR credit requirements in one auction that then increase after the next FTR auction and leaves PJM in the position of trying to recover collateral it returned to a Market Participant after the previous FTR auction. PJM is open to discussing DC Energy s third request to increase the minimum participation requirement to be authorized to be a Market Participant in the PJM s FTR auctions. In general, PJM believes credit requirements should be primarily tied to each Market Participant s transactions and acquired positions. However, PJM commits to completing a review, stakeholder discussion, and development of any proposed changes to PJM s current minimum participation requirements within the next six months. Such review will consider whether any suggested revisions to the minimum participation requirements for the FTR auctions are consistent with the stated intentions of Order No PJM respectfully requests that the Commission deny the Complaint and allow these ongoing stakeholder efforts to move forward given the anticipated filing of a minimum credit requirement in just over a month and PJM s commitment to reach 6

7 conclusions on whether to implement any other FTR credit policy changes related to the other two concerns in the Complaint. Finally, the Commission should reject DC Energy s requested June 4, 2018 refund effective date. PJM s Long-Term 2019/2022 FTR Auction and its July Balance of Planning Period Auction closed on June 6, 2018, and June 19, 2018, respectively. Inasmuch as PJM conducted these auctions in accordance with the terms of its effective Tariff, and given PJM s inability to impose changed credit requirements retroactively, no basis exists to disturb or revisit the cleared results. III. BACKGROUND A. Evolution of PJM s Credit and Collateral Rules for FTRs In PJM s annual FTR auctions and monthly balance-of-planning period auctions, Market Participants are eligible to acquire FTR positions for the upcoming planning year or remaining months in the current planning year, respectively. Through PJM s longterm FTR auctions, Market Participants are eligible to acquire FTR positions in advance of, and covering, future planning years. In all cases, Market Participants seeking to acquire FTR positions must satisfy PJM s Commission-accepted credit and collateral rules. As described in the Complaint, 7 PJM sets FTR credit requirements based on the purchase price of an FTR relative to a calculated, historical proxy price ( FTR Historical Value ) that is determined using a three-year, weighted average of day-ahead congestion 7 Complaint at

8 associated with the particular FTR transmission path. 8 Prior to April 1, 2018, if the purchase price of the FTR was higher than the historical proxy price on the FTR path (this latter value, as noted, determined based on historical congestion patterns), collateral was required. In contrast, if the purchase price of the FTR was lower than the presumed cash flow on the FTR path, no collateral was required. Stated another way, a cleared, below-ftr Historical Value bid was reasonably expected to be profitable, thereby obviating the need for any collateral to cover the position. As long as the valuation assumptions supporting these FTR positions remained valid the market was not exposed to material default risk from prevailing flow FTRs. Those valuation assumptions held true for over fifteen years until an FTR Market Participant acquired an FTR portfolio in long-term FTR auctions that highlighted an FTR credit risk for which credit requirement enhancements were needed. Specifically, this portfolio acquired a significant portfolio of long-term prevailing flow FTRs on paths for which future congestion levels were expected to decrease due to planned transmission system projects. Thus, in April of this year, pursuant to Commission-accepted 2018 Credit Revisions submitted last December, PJM implemented enhanced FTR credit requirements to change the FTR Historical Value determination by incorporating into PJM s market simulation model future facility upgrades. 9 Under these 2018 Credit 8 The weighting, from most recent year backwards, is 50%/30%/20%. A 10% discount is then applied to provide a further discount to the value of the historical calculation. 9 See Proposed Modifications to FTR Credit Requirements of PJM Interconnection, L.L.C., Docket No. ER (Dec. 11, 2017). The Commission approved these revisions by letter order dated January 19,

9 Revisions any anticipated congestion decreases attributable to material future upgrades are accounted for in the FTR Historical Values used to calculate FTR credit requirements. As a consequence, FTR paths devalued by planned future upgrades are subject to increased credit requirements applicable when a Market Participant submits FTR auction bids and if the Market Participant clears such positions in an FTR auction. 10 B. Ongoing Stakeholder Initiatives to Strengthen FTR Credit and Collateral Requirements Following the filing and approval of the 2018 Credit Revisions, PJM continued to advance additional credit and collateral revisions through the PJM stakeholder process. In January of this year, PJM began work on a proposal for a minimum, per-mwh credit requirement for FTRs, similar to, but with a higher (i.e., $0.10) minimum, than the $0.05 proposal urged in the Complaint. The filing of the proposed minimum FTR credit requirement is expected to be made by August 1, As noted, the effect of this volumetric minimum, combined with the 2018 Credit Revisions, would have imposed an estimated $90 million collateral requirement on GreenHat. 11 Furthermore, PJM has committed to complete within six months the analysis and stakeholder process regarding 10 However, in order to smooth the transition from the existing collateral rules to the new rules, the 2018 Credit Revisions allow any market participant holding a short FTR position to either post collateral or be frozen with the exception of certain FTR transactions. This thirteen-month transitional accommodation is designed to provide interim relief from the impacts of the new FTR Historical Value calculation, recognizing that certain market participants would otherwise realize an immediate increase in their credit requirements and be subject to possible collateral calls. During the transitional period, market participants may continue to participate in FTR auctions, but only to the extent that any new FTR acquisitions lower the market participants FTR credit requirement. 11 See supra note 6. 9

10 the potential merits of a mark-to-auction provision in PJM s FTR credit requirements and any proposed changes to FTR market minimum participation requirements. IV. ANSWER A. Contrary to the Complaint, PJM s Commission-Accepted Credit and Collateral Requirements Are Not Unjust and Unreasonable It bears emphasizing that the Complaint does not allege any Tariff violation by PJM or suggest that any Market Participant acquired FTR positions without meeting the Tariff s credit and collateral requirements. Nor does the Complaint allege any dereliction of responsibility by PJM in connection with the administration of its Tariff or the oversight of the FTR market. To the contrary, the Complaint acknowledges PJM s cooperative efforts with DC Energy, the PJM stakeholders, and the PJM Independent Market Monitor to maintain adequate credit requirements for open FTR portfolios and the recent initiatives to manage the risks associated with FTR portfolios. 12 The Complaint further acknowledges 13 that PJM s existing credit and collateral requirements were accepted by the Commission as compliant with Order No. 741 and that the 2018 Credit Revisions, which strengthened these requirements, represented an incremental improvement to PJM s credit rules. 14 Nonetheless, the Complaint asserts that PJM s existing Tariff is unjust and unreasonable and seeks Commission-directed Tariff revisions effective as of the date of the Complaint. 12 Complaint at Id. at Id. at 11 n

11 In Order No. 741, the Commission established the contours of a properly constructed credit and collateral policy, recognizing that legitimate, competing interests must be accommodated. In the Commission s view: The management of risk and credit necessarily involves balance. If access to credit is too restrictive, competition suffers because fewer entities are eligible to participate, which can potentially reduce competition. Conversely, if more risk is tolerated and access to credit is too easy to obtain, then the market is more susceptible to defaults and customers bear the burden of the costs that flow from such defaults. 15 In response to Order No. 741, PJM submitted various Tariff revisions to address the requirements of Order No. 741 that were not already addressed in PJM s existing Tariff. As relevant here, the Commission conditionally accepted PJM s Order No. 741 compliance filings 16 and rendered the following specific findings: first, the Commission approved as just and reasonable PJM s proposed $50 million limit on unsecured credit; 17 second, the Commission directed PJM to modify its FTR credit requirements to reflect the complete elimination of an unsecured credit allowance for FTR trading; 18 third, the Commission approved PJM s minimum capitalization requirements for market participation; and, finally, the Commission approved, with a minor modification, PJM s proposed risk management and verification requirements designed to ensure that each 15 Order No. 741 at P PJM Interconnection, L.L.C., 136 FERC 61,190 (2011). 17 Id. at P Id. at P 26 (noting that PJM s existing Tariff improperly permitted market participants to use seller credit a form of unsecured credit to meet FTR credit requirements). 11

12 market participant has adequate risk management capabilities to engage in trading with minimal risk to the market. 19 As market conditions and Market Participants FTR portfolios evolve, PJM reexamines its credit requirements, as evidenced by the 2018 Credit Revisions and ongoing initiatives expected to produce additional credit reforms. The fact that PJM has modified its FTR credit requirements and is contemplating additional credit enhancements does not, in and of itself, form the grounds for a Commission finding under Federal Power Act, section 206. If the Commission were to adopt such an approach, then any regional transmission organization ( RTO )-sponsored market reforms could form the basis for a finding that its present tariff is per se unjust and unreasonable. In this case, Tariff revisions proposed for prospective application, which are currently being voted on in PJM s stakeholder process and expected to be filed by August 1, 2018, will reflect the determination by PJM and its stakeholders that enhancements are appropriate to provide reasonable protection against defaults without unduly constraining competition in FTR markets. A utility submitting tariff revisions is not required to concede or demonstrate that its existing tariff is unjust and unreasonable. To the contrary, the Commission has made clear that in reviewing tariff revisions under section 205, there is no presumption, or obligation to find, that the existing tariff is unjust and unreasonable. 20 The Complaint merely re-confirms what PJM already knows and is 19 Id. at P N.Y. Indep. Sys. Operator, Inc., 137 FERC 61,240, at P 28 (2011). Similar findings have been made in cases decided under section 4 of the Natural Gas Act, the analog to section 205 of the Federal Power Act. See N. Nat. Gas Co., 96 FERC 61,143, at 61,620 (2001). 12

13 presently addressing i.e., that PJM s credit rules should regularly be monitored for possible adjustments, when and as appropriate to respond to market changes. B. Given the Imminent Filing of Section 205 Reforms to Address Many of the Issues Raised by DC Energy, the Proper Course Is to Defer to Examination of Additional Credit Reforms in PJM s Ongoing Stakeholder Process 1. The Appropriate Course is to Defer to PJM s Ongoing Stakeholder Process Given the timing of PJM stakeholder consideration of proposed credit reforms which would substantially address the circumstances raised in the Complaint, this is an appropriate case for the Commission to briefly defer to completion of that stakeholder process and PJM s filing of those credit reforms pursuant to Federal Power Act, section 205. At the outset, the Commission has previously determined that credit and collateral requirements are, in the first instance, better left to RTO stakeholder procedures. 21 Moreover, in this case, stakeholder procedures are already underway to consider the very issues raised in the Complaint. Among the changes under consideration and due to be filed next month, is a $0.10 volumetric per-mwh of FTR bid or cleared minimum, which is comparable to, but offers greater credit protection than, the $0.05 volumetric minimum requirement urged in the Complaint. 22 PJM itself proposed the $0.10 volumetric per- MWh of FTR bid or cleared minimum. 21 See, e.g., Order No. 741-A at P 33; Order No. 741 at PP The Complaint (at 6) describes DC Energy s attempts in 2016 to gain stakeholder approval of a volumetric minimum floor collateral requirement to address the FTR exposure issue. What the Complaint omits, however, is that DC Energy s volumetric minimum proposal was part of a package of possible FTR credit policy changes proposed by DC Energy that also included elimination of PJM s existing credit requirement adders for net Undiversified FTR portfolios. The 13

14 Also being evaluated is the possibility of incorporating into the FTR credit rules a reference to FTR auction clearing prices, along the lines of the mark-to-auction valuation approach proposed in the Complaint. PJM s analysis to date does not yet support that the mark-to-auction valuation approach is reasonable because market clearing prices are inconsistent and not always indicative of the true value of the FTR during the planning year since the FTR auctions are only run once per month and the long-term FTR auctions are only run three times per year. Finally, the possibility of revising PJM s currently effective FTR market minimum participation requirements i.e., the third element of the Complaint s proposed reforms has not yet been raised by any party for discussion in PJM s stakeholder process, although PJM is open to this possibility and prepared to engage with stakeholders on it and reach conclusions within the next six months. Furthermore, the credit enhancements implemented pursuant to PJM s 2018 Credit Revisions specifically targeted open FTR positions and were designed to reduce significantly the size and scope of uncovered FTR portfolios that a Market Participant is able to acquire. The additional credit revisions currently being vetted through PJM s stakeholder process are expected to provide further strengthening of PJM s credit rules, and are planned to be filed on a schedule that would permit them to become effective on October 1, Allowing proposal failed in a stakeholder vote at PJM s December 2016 Markets and Reliability Committee meeting after PJM analysis showed that the DC Energy proposed package of FTR credit requirement changes would not have established a sufficient collateral requirement to mitigate the 2007/2008 planning year PowerEdge default on a net counterflow FTR portfolio, which was the risk the FTR Undiversified credit requirement adders were designed to address. Subsequent to that process, stakeholder discussions refocused on appropriate credit requirements for FTR paths in areas undergoing transmission upgrades and on a minimum FTR credit requirement without elimination of the FTR Undiversified credit requirement adders. 14

15 these procedures to move forward offers the likelihood of meaningful further changes on a schedule that is almost certain to be more expedient than a contested complaint proceeding. 2. At a Minimum, the Commission Should Defer Any Action Pending Conclusion of PJM s Stakeholder Process and Review of Forthcoming Tariff Revisions Should the Commission decline to summarily deny the Complaint, no action should be taken pending review of the credit and collateral Tariff revisions expected to emerge from the PJM stakeholder process and anticipated to be filed on or before August 1, As explained above, PJM is currently evaluating with its stakeholders the same or similar issues presented in the Complaint. A stakeholder resolution of these issues within the next six months will address the scope of requests raised in the Complaint. 23 At a minimum, given the imminent PJM filing on minimum FTR credit requirements, the Commission should defer adjudication of the Complaint pending review and disposition of the imminent section 205 filing. Resources have already been committed, and additional stakeholder meetings have been scheduled, to discuss PJM s current credit and collateral rules for FTR market participants. These ongoing efforts should not be disrupted as long as they are moving forward productively and anticipated to produce credit reforms directly responsive to the concerns in the Complaint. 23 See, e.g., Sw. Power Pool, Inc., 161 FERC 61,062 (2017) (Commission initiates section 206 investigation into the reasonableness of the SPP Tariff and absence of refund commitment by nonpublic utility transmission owners, but suspends the investigation pending outcome of ongoing stakeholder procedures considering same issue). 15

16 C. The Request for a June 4, 2018 Refund Effective Date Is Neither Legally Sound Nor Practicably Implemented DC Energy acknowledges that PJM is actively engaged on the very issues presented in the Complaint, and further acknowledges the incremental improvement to PJM s credit rules with the enhancements implemented as part of the 2018 Credit Revisions. Yet the Complaint suggests that immediate Commission action and a retroactive effective date (i.e., June 4, 2018, coinciding with the date of the Complaint) is necessary given the timing of PJM s long-term 2019/2022 FTR auction and the July 2018 balance of planning period auction. The inference invited by the Complaint is that Commission-directed Tariff revisions, if made effective as of June 4, could prevent the further growth in size and risk of under-collateralized FTR portfolios. 24 The dispositive response to this argument is that PJM s long-term 2019/2022 FTR auction closed on June 6, 2018, and PJM s July 2018 balance of planning period auction closed on June 19, As it was required to do, PJM conducted these auctions in accordance with its currently effective, Commission-accepted Tariff, including the Tariff provisions governing FTR credit and collateral. Commission precedent does not support the application of credit requirements retroactively. 25 Nor does PJM have the ability to apply a credit requirement retroactively to an FTR auction that has already been 24 Complaint at See, e.g., PG&E Gas Transmission, 105 FERC 61,382, at P 56 (2003) (accepting proposed collateral and credit tariff revisions subject to company s express clarification that changed credit terms would not apply retroactively), aff d Gas Transmission Nw. Corp. v. FERC, 504 F.3d 1318 (D.C. Cir. 2007); N.Y. Indep. Sys. Operator, Inc., 123 FERC 61,090, at P 28 (2008) (distinguishing filed rate doctrine violations from revised credit requirements that are approved for prospective effect). More generally the Commission has denied attempts to retroactively impose tariff revisions. See infra note

17 conducted and the results posted. Thus, as a practical matter, refunds cannot realistically be effectuated. 26 Moreover, even if it were feasible, there is no legal basis to justify unwinding the recent FTR auction results based on a retroactive application of the credit rules advocated by DC Energy. PJM indisputably complied with its effective Tariff in administering these auctions. In these circumstances, case law is clear: the Commission will not, through imposition of retroactive tariff revisions, undo the decisions of market participants by requiring re-runs of settled markets. 27 The same policy should be recognized here. V. ADMISSIONS AND DENIALS In accordance with Rule 213(c)(2) of the Commission s Rules of Practice and Procedure, 28 except as stated in this Answer, PJM does not admit any facts in the form and manner stated in the Complaint. To the extent that any fact or allegation in the Complaint is not specifically admitted in this answer, it is denied. 26 The same argument i.e., need to prevent further accumulation of open FTR positions was advanced to support DC Energy s request for fast-track processing. 27 See Sw. Power Pool, Inc., 161 FERC 61,071, at P 49 (2017) (in a section 206 investigation, Commission-ordered tariff revisions are designated to take effect prospectively; Commission declines to order reallocations of previously awarded financial congestion rights in the absence of any tariff violations by the RTO), reh g denied, 163 FERC 61,111 (2018); see also MD Pub. Serv. Comm n v. PJM Interconnection, L.L.C., 123 FERC 61,169, at P 49 (2008) (citing Mirant Energy Trading, LLC v. PJM Interconnection, LLC, 122 FERC 61,007 (2008); Bangor Hydro-Electric Co. v. ISO New England Inc., 97 FERC 61,339 (2001) (finding that re-running markets even when an error was made would do more harm to electric markets than is justifiable)); Cal. Indep. Sys. Operator, Inc., 120 FERC 61,271, at P 25 (2007) C.F.R (c)(2). 17

18 VI. CONCLUSION For the foregoing reasons, the Commission should deny the Complaint. Respectfully submitted, Craig Glazer Vice President Federal Government Policy PJM Interconnection, L.L.C G Street, N.W., Suite 600 Washington, D.C (202) (phone) (202) (fax) Craig.Glazer@pjm.com Jacqulynn Hugee Associate General Counsel PJM Interconnection, L.L.C Monroe Blvd. Audubon, PA (610) (phone) (610) (fax) /s/ Paul M. Flynn Paul M. Flynn Jeffrey G. DiSciullo Wright & Talisman, P.C G Street, N.W., Suite 600 Washington, D.C (202) (phone) (202) (fax) flynn@wrightlaw.com disciullo@wrightlaw.com June 25,

19 CERTIFICATE OF SERVICE I hereby certify that I have this day served the foregoing document upon each person designated on the official service list compiled by the Secretary in this proceeding. Dated at Washington, D.C., this 25th day of June, /s/ Jeffrey G. DiSciullo Jeffrey G. DiSciullo Attorney for PJM Interconnection, L.L.C.