FERC grants Exelon a break related to failure of Perryman unit in Maryland

The Federal Energy Regulatory Commission on May 22 granted Exelon Generation Co. LLC a break needed because of the degraded condition of a unit at the oil- and gas-fired Perryman power plant in Maryland.

On April 29, Exelon Generation had filed a request for limited waiver of the deadline to submit data and documentation establishing the level of its Market Seller Offer Cap, and the corresponding deadlines for review by the Independent Market Monitor and PJM Interconnection, set forth in 
section 6.4(b) of Attachment DD of PJM’s Open Access Transmission Tariff (Tariff) for the upcoming Base Residual Auction for the 2018/2019 Delivery Year. “For the good cause shown, the Commission grants Exelon’s requested waiver,” said the May 22 order.

PJM secures capacity commitments under the Reliability Pricing Model through a Base Residual Auction held three years before the Delivery Year and three subsequent Incremental Auctions leading up to the start of the Delivery Year to allow for adjustments. Attachment DD sets forth the terms and conditions governing the Reliability Pricing Model. Existing generation capacity resources must provide data and documentation establishing the level of a resource’s Market Seller Offer Cap no later than 120 days prior to the commencement of the offer period for the applicable auction.

Exelon owns and operates the Perryman Generating Station, which consists of four oil-fired combustion turbines and one fueled by natural gas or oil. The Perryman units are collectively capable of generating 353 MW. Exelon said that its Perryman Unit 2 experienced severe mechanical failure on Feb. 21 of this year. Exelon said it will take approximately nine months to make the extensive and costly repairs required to bring the unit back to operating status. Exelon stated that, in addition to issues with the compressor, electrical testing revealed the generator field and stator windings of Perryman Unit 2 are in degraded condition. Therefore, Perryman Unit 2 will be inoperable until the repairs are made. Exelon said it also identified the potential for the same problems to occur in Perryman units 1 and 4, thus necessitating preventive maintenance that will take approximately twenty days to complete.

The deadline to submit the data required to substantiate Exelon’s Market Seller Offer Cap was Jan. 11, as the original date for the 2015 Base Residual Action was May 11. Exelon stated that the cost information it provided ahead of the Jan. 11 deadline was accurate at the time. However, given the failure of Perryman Unit 2 on Feb. 21, and the subsequent determination that Perryman units 1 and 4 require preventive maintenance, Exelon requested a waiver of the 120-day deadline and associated deadlines for review in order to update its data prior to the auction to reflect the increased costs required to repair the units and ensure adequate function during Delivery Year 2018/2019. Exelon added that the auction has been delayed due to pending commission action which could impact the date of the auction.

Said the May 22 FERC order: “We find that good cause exists to grant Exelon’s unopposed request for waiver. First, we find that Exelon acted in good faith. It submitted the required documentation in a timely manner; the waiver would allow Exelon to submit updated information due to events at Perryman units 1, 2, and 4. Second, we find that Exelon’s requested waiver is limited in scope. It involves only three units, Perryman units 1, 2, and 4, and impacts only the deadlines associated with submitting and review of data and documentation for the Market Seller Offer Cap for the Base Residual Auction for the 2018/2019 Delivery Year. Third, we find that the waiver will remedy a concrete problem. Absent a waiver, Exelon’s capacity will go forward in the auction based on inaccurate data, i.e., a Market Seller Offer Cap that is lower than what is required to complete the repairs and ensure the capacity is available in Delivery Year 2018/2019. Finally, we find that granting Exelon’s request for waiver will not have any undesirable consequences or harm any third parties, as the auction has not yet begun and no prejudice or competitive harm will occur.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.