PJM Provides Further Update On Disposition Of Portfolio Of Energy Marketer Which Had Defaulted; Discusses Whether Default Allocation Cost Is Or Is Not Likely -- EnergyChoiceMatters.com

PJM Provides Further Update On Disposition Of Portfolio Of Energy Marketer Which Had Defaulted; Discusses Whether Default Allocation Cost Is Or Is Not Likely

March 24, 2022

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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PJM issued a new market notice providing a further update on the disposition of the portfolio of Hill Energy Resource & Services, LLC, which defaulted at PJM in January, as previously reported

PJM said in the notice that, in the April FTR Auction that was cleared and posted today, PJM was able to liquidate all of the remaining defaulted Hill portfolio FTR positions effective from April 1, 2022, through May 31, 2022.

The net proceeds of liquidating these positions were $0.81 million.

When added to the settled losses on the Hill portfolio of $3.66 million through February, and considering the net cost of liquidating defaulted Hill Long-Term FTR positions of $1.81 million and the $2.88 million in proceeds from previously sold positions, the total loss thus far on the Hill portfolio is $1.79 million.

The chart below details the resolution of Hill positions and liabilities to date:

Notes:

• March Settlement still to be determined.

• Negative costs represent profits that reduce total costs.

• Total costs do not include recovery of PJM’s Administrative Costs. Through 2025, those are estimated at $150,000.

PJM is holding $6.1 million in collateral with which to cover this loss. PJM said in the notice that, as a reminder, the March 2022 positions will go to settlement.

PJM said that, after the March 2022 defaulted Hill FTR positions go to settlement, and as a result of the successful liquidation process for all future defaulted Hill FTR positions, there will be zero outstanding defaulted Hill FTR positions. PJM will provide a final update after the March 2022 positions are settled, "but at this time we do not expect there to be any default allocation cost to the PJM membership as a result of the defaulted Hill FTR portfolio," PJM said

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