Current PJM business practices permit the assignment of negatively valued Residual ARRs to LSEs subsequent to the Annual ARR Allocation, imposing an un-hedgeable and undesired risk to the cost of serving load. This problem is timely for stakeholders to address as Annual Stage 1B Allocation volumes are at all-time lows, increasing the likelihood of potential Residual ARR activity.
The MIC will review background on Residual ARRs including historical levels of activity with detail on positive and negative allocations, the current allocation process and modeling, as well as discuss potential improvements.