posted on Thursday, August 16, 2007 1:51 PM by Andrea Kells

UPDATE: PJM Proposes External Market Monitor to Quell Independence Issues

In an effort to resolve complaints concerning PJM management's alleged interference in the operations of PJM's internal market monitoring unit's (MMU) activities, last week PJM submitted to FERC a settlement proposal that would establish a fully independent external MMU.  The new unit would be modeled on the market monitor that FERC approved for the Midwest ISO, and would be a separate legal entity, unaffiliated with PJM.  PJM and the external MMU would enter into a contract, with an initial term of two years, for market monitoring services.  FERC approval would be required to replace the external MMU or decline to renew the contract. 

PJM is offering the head position at the external MMU to Joseph Bowring, the current internal market monitor whose earlier complaints about interference prompted two formal complaints, the resulting investigation currently underway, and the resignation of two PJM executives, including former PJM President and CEO Phil Harris. 

In a departure from the current, internal MMU structure, the proposed Settlement would grant the MMU explicit authority to file comments and testimony in FERC proceedings regarding PJM wholesale market issues, and the MMU alone would decide whether and how to respond to requests from FERC or state commissions for additional MMU data or analysis of the PJM market.  In a direct response to the complaints filed against PJM, the new external MMU would exercise exclusive control over data and information systems developed for market monitoring.  To provide continuity, until the external MMU is established, Bowring will continue to operate as the internal market monitor, and will report only to the PJM Board. 

If accepted, the settlement would not end FERC's pending investigation into the allegations of improper interference.