On December 29, 2017, FERC conditionally accepted revisions to the Joint Operating Agreement (“JOA”) between PJM Interconnection, L.L.C. (“PJM”) and Midcontinent Independent Operator System, Inc. (“MISO”) that are intended to improve the coordination of resources that are pseudo-tied between the two regional transmission organizations (“RTOs”). A “pseudo-tie” is a mechanism used by one Balancing Authority (“BA”) to control generating resources that are physically located in another BA. The proposed revisions were given an effective date of October 1, 2017, subject to a ministerial compliance filing.

PJM and MISO proposed to incorporate standard definitions, rules, and responsibilities into the JOA that would guide how the two BAs will administer their pseudo-tied resources. The changes were proposed in order “[t]o address the market and reliability challenges posed by an increased number of pseudo-tied resources.” The JOA revisions include the following:

  1. the RTOs will coordinate modeling and technical details of pseudo-tied resources;
  2. to capture the impacts of pseudo-tied resources on flowgates, neither PJM, nor MISO, nor the entity seeking to pseudo-tie a resource, will tag, or request to have tagged, the scheduled energy flows from pseudo-tied resources because information about the pseudo-tied resources is included in the market-to-market management procedure;
  3. each BA will send dispatch instructions to the unique share of a partial pseudo-tied resource that is committed to that BA;
  4. each pseudo-tied resource will pay for station service consistent with the rules of the native BA;
  5. the RTOs will not recall a pseudo-tied resource that is committed to the attaining BA as a capacity resource to serve load in the native BA;
  6. the native Reliability Coordinator can commit, de-commit or redispatch the pseudo-tied resource under certain circumstances pursuant to the PJM–MISO pseudo-tied Units Operating Procedure or Safe Operating Mode;
  7. an entity seeking to pseudo-tie must pay for transmission losses to deliver its energy to or receive its energy from the native BA to the attaining BA; and
  8. the RTOs reserve the right to suspend or terminate a pseudo-tied resource if it no longer satisfies the requirements for a pseudo-tie.

Several parties protested aspects of the RTOs’ proposal to update the JOA to address pseudo-tie concerns, some seeking to expand the proceeding to include a broader discussion of pseudo-ties and others seeking to limit the RTOs’ pseudo-tie procedures to those contained in individual pseudo-tie agreements or within the RTOs’ individual tariffs. Ultimately, FERC agreed “with the RTOs that the JOA Revisions provide greater clarity regarding the roles and responsibilities between the two [BAs] in order to improve the administration and coordination of pseudo-tied resources.”

FERC’s order can be found here.