UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION PJM Interconnection, L.L.C. ) Docket Nos. ER21-460-000 ) EL20-56-000 MOTION FOR LEAVE TO ANSWER AND ANSWER OF PJM INTERCONNECTION, L.L.C. PJM Interconnection, L.L.C. (“PJM”), pursuant to the Federal Energy Regulatory Commission’s (“Commission”) procedural rules,1 submits this Motion for Leave to Answer and Answer to the December 14, 2020 Joint Protest and Motion to Reject of Indiana Municipal Power Agency (“IMPA”) and Buckeye Power, Inc. (“Buckeye”),2 and the December 14, 2020 Comments of American Electric Power Service Corporation (“AEP”).3 The Commission should deny IMPA’s and Buckeye’s motion to reject PJM’s November 23, 2020 filing4 to comply with the Commission’s September 17, 2020 order5 in this proceeding. Contrary to their arguments, the Compliance Filing’s revisions6 1 18 C.F.R. §§ 385.212, 385.213. 2 Indiana Municipal Power Agency’s and Buckeye Power, Inc.’s Joint Protest of and Motion to Reject PJM Interconnection, L.L.C.’s Compliance Filing, Docket No. ER21-460-000 (Dec. 14, 2020) (“IMPA/Buckeye Motion/Protest”). 3 Comments of American Electric Power Service Corporation, Docket No. ER21-460-000 (Dec. 14, 2020) (“AEP Comments”). 4 PJM Interconnection, L.L.C., Compliance Filing, Docket No. ER21-460-000 (Nov. 23, 2020) (“Compliance Filing”). 5 Ind. Mun. Power Agency v. PJM Interconnection, L.L.C., 172 FERC ¶ 61,243 (2020) (“September 17 Order”). 6 The Compliance Filing submitted proposed revisions (“Compliance Revisions”) to the Amended and Restated Operating Agreement of PJM Interconnection, L.L.C. (“Operating Agreement”) and the PJM Open Access Transmission Tariff (“Tariff”)6 to comply with the directives in the September 17 Order. For ease of reference, this Answer refers to the Operating Agreement when describing revisions that are incorporated into both the Tariff, Attachment K-Appendix and the parallel provisions of the Operating Agreement, Schedule 1. 1 explicitly disavow any interpretation that PJM’s station power provisions determine whether a retail sale of station power has occurred, and add provisions for PJM’s receipt of meter data for the express purpose of reflecting Market Seller’s purchases of energy at retail to meet their station power needs. While further details may be warranted to implement the proposed Compliance Revisions’ overarching directives (including any necessary changes to Market Participants’7 current practices and arrangements), such practical implementing details are best developed through the PJM stakeholder process, and provide no basis for rejecting the Compliance Filing. Such implementing details could appropriately consider AEP’s suggestions (in its Comments) regarding accounting for energy sales and provision of telemetered data to Load Serving Entities (“LSEs”). I. MOTION FOR LEAVE TO ANSWER IMPA and Buckeye’s pleading includes a motion under Commission Rule 212, which PJM is permitted to answer under Commission Rule 213. Although Commission Rule 213(a)(2) does not generally permit answers to protests,8 the Commission permits answers for good cause shown, such as when an answer contributes to a more accurate and complete record or provides useful information that assists the Commission’s deliberative process.9 This Answer will aid the Commission’s decision-making process by showing that the Compliance Filing satisfies the directives of the September 17 Order, and that there 7 Capitalized terms used, but not defined, in this Answer have the meanings provided for such terms in, as applicable, the Tariff or Operating Agreement. 8 18 C.F.R. § 385.213(a)(2). 9 See, e.g., N.Y. State Pub. Serv. Comm’n v. N.Y. Indep. Sys. Operator, Inc., 158 FERC ¶ 61,137, at P 29 (2017) (accepting answers because they provided information that assisted in the Commission’s decision- making process); Colonial Pipeline Co., 157 FERC ¶ 61,173, at P 23 (2016) (same). 2 is no basis for rejecting the filing. PJM therefore, to the extent necessary, asks that the Commission accept this Answer. II. ANSWER A. Background. The September 17 Order addressed a petition for declaratory order and complaint filed by IMPA and the City of Lawrenceburg, Indiana (“the City”) against PJM, AEP, and Lawrenceburg Power, LLC (“the Plant”) concerning a dispute between the City and the Plant over the extent to which the City was providing retail electric service to the Plant.10 The September 17 Order granted the Petition only to the extent of “clarify[ing] that the Commission does not have jurisdiction over the supply of station power,” and “den[ied] all other related relief requested by Petitioners.”11 The Commission nonetheless found that the station power provisions of the Operating Agreement and the Tariff “may be unjust, unreasonable, unduly discriminatory, or preferential” because those provisions “can be read to, and indeed [have] been relied on by certain PJM generators to assert the right to, determine whether a retail sale of station power has occurred and avoid the retail purchase of station power.”12 The September 17 Order directed PJM to eliminate this ambiguity, and suggested specific language changes to that effect.13 The September 17 Order also directed that “PJM should consider whether it has sufficient information to implement 10 Complaint and Petition for Declaratory Relief of the Indiana Municipal Power Agency and the City of Lawrenceburg, Indiana, Docket No. EL20-30-000 (Mar. 6, 2020) (“Petition”). 11 September 17 Order at P 88. 12 Id. at P 107. 13 Id. at PP 107, 108. 3 [Operating Agreement, Schedule 1,] section 1.7.10(d), and if not, propose revisions to its Tariff to require generation and transmission owners to provide sufficient information.”14 On November 23, 2020, PJM submitted the Compliance Filing, proposing the Compliance Revisions to satisfy the September 17 Order’s directives. In response to the Commission’s notice of the Compliance Filing, the IMPA/Buckeye Motion/Protest asked the Commission to reject the Compliance Filing, and the AEP Comments suggested two areas for further Operating Agreement or Tariff revisions. B. The Commission Should Deny the Motion to Reject. Rejection of the Compliance Filing would be warranted only in the atypical case where such filing is “a patent nullity”15 or where deficiencies in the filing are so significant as to warrant immediate rejection.16 More narrowly, the Commission will reject proposed changes in a compliance filing that go beyond the compliance directives of the relevant order.17 Neither consideration warrants rejection of the Compliance Filing. Far from alleging the Compliance Filing is a nullity, IMPA/Buckeye concede the Compliance Revisions include the two specific language changes proposed by the September 17 Order.18 In practical effect, the IMPA/Buckeye Motion/Protest seeks not rejection of those 14 Id. at P 108. 15 Mun. Light Boards v. FPC, 450 F.2d 1341, 1347 (D.C. Cir. 1971) (addressing Federal Power Act (“FPA”) section 205, 16 U.S.C. § 824d, filing). 16 Columbia Gulf Transmission Co., 86 FERC ¶ 61,130, at 61,450 (1999). NRG v. FERC, 862 F.3d 108 (D.C. Cir. 2017) has arguably expanded the grounds for denial or rejection of an entire filing under FPA section 205, but that precedent is not applicable to the FPA section 206 compliance filing at issue here. See 16 U.S.C. § 824e. 17 See, e.g., PJM Interconnection, L.L.C., 155 FERC ¶ 61,157, at PP 303-304 (2016). 18 IMPA/Buckeye Motion/Protest at 17 (Compliance Revisions “largely track[] the September 17 Order’s directive in paragraph 108”). 4 changes, but far more extensive revisions, not specifically identified in the September 17 Order, to the station power provisions in Operating Agreement, Schedule 1, section 1.7.10(d). As shown below, their added changes are not required, and should not be directed. Moreover, as also shown below, none of PJM’s proposed Compliance Revisions go beyond the September 17 Order’s directives. 1. The Compliance Filing complies with the September 17 Order. a. The Compliance Revisions leave no doubt that the station power provisions do not govern or determine retail service. As directed by the September 17 Order, PJM revised Operating Agreement, Schedule 1, section 1.7.10(d) to clearly state that PJM “is not responsible for determining Relevant Electric Retail Regulatory Authority-jurisdictional retail rates,” and that “the monthly netting provision in section 1.7.10(d)(i) above does not determine whether a retail sale of station power has occurred in a month.”19 These changes closely track the Commission’s directives that PJM’s proposed Compliance Revisions “should clarify that the monthly netting provision in section 1.7.10(d)(i) of the Tariff does not determine whether a retail sale of station power has occurred” in a given month, and “should make clear that PJM has no responsibility for the determination of any state-jurisdictional retail rates.”20 These revisions explicitly eliminate the ambiguity identified in the September 17 Order, i.e., that “the PJM Tariff’s self-supply monthly netting provision can be read to, and indeed has been relied on by certain PJM generators to assert the right to, determine 19 Compliance Filing, proposed Operating Agreement, Schedule 1, section 1.7.10(d)(iv). 20 September 17 Order at P 108. 5 whether a retail sale of station power has occurred and avoid the retail purchase of station power.”21 That ambiguity was the stated basis for the September 17 Order’s finding that the station power provision “may be unjust, unreasonable, unduly discriminatory, or preferential” justifying the new FPA section 206 proceeding in Docket No. EL20-56-000 “to address this concern.”22 The Compliance Revisions thus use the Commission’s own specific formulation of revised tariff language to address the very concern that prompted the FPA section 206 proceeding.