Stakeholders Discuss DR Participation in Regulation Market
PJM’s Market Implementation Committee discussed a proposal to revise its governing documents to allow demand response (DR) resources to participate in the regulation market when there may be energy injected at the customer’s point of interconnection (POI).
Curtailment service providers (CSPs) would be required to have a net energy metering (NEM) agreement with the relevant electric distribution company (EDC) and explicit approval from that EDC to allow participation alongside injections. The same change also is part of PJM’s larger proposal to comply with FERC Order 2222, but some members have expressed a wish to have the capability implemented before 2028, when the Order 2222 implementation is set to go live.
PJM’s Pete Langbein said allowing DR participation at POIs with injection would require some software redesign.
Intelligent Generation CEO Jay Marhoefer said the company supported the proposal at the Distributed Resources Subcommittee (DISRS) because DR aggregators can get injection rights only when they have a wholesale market participation agreement (WMPA) or similar arrangement with PJM. When a DR resource provides regulation service, injection is allowed under an NEM tariff, but there no longer is uncounted energy and thus a WMPA no longer applies.
Representing DR providers, Bruce Campbell of Campbell Energy Advisors said it is arguable that a customer with a NEM agreement that includes the capability to inject energy cannot participate in the markets as DR. He said such configurations could be operated as DR when the injections are not wholesale energy.
1st Read on 3rd Phase of Hybrid Resource Rules
PJM’s Maria Belenky presented a set of proposed manual revisions to codify the third phase of PJM’s rules for hybrid resources, which would expand the rules to configurations in which non-inverter generation is paired with storage. (See “Third Phase of Hybrid Resource Rules Endorsed,” PJM MRC/MC Briefs: Nov. 21, 2024.)
For generation paired with storage, participation in the energy and ancillary service markets is based on PJM’s Energy Storage Resource Participation Model. For hybrids composed entirely of non-inverter resources, rules for participation are similar to those for wind and solar generation
The changes would allow the resource owner to decide whether the storage component of a hybrid should enter PJM’s market as open-loop capable, meaning it can charge from the grid, or closed-loop capable, limiting it to charging only from the generation components of the hybrid. Belenky said current practice dictates that if a storage resource is considered open-loop if it is physically capable of receiving energy from the grid, even if that does not reflect how the storage is operated.
Hybrids with a capacity obligation and composed entirely of inverter generation must meet their requirement to offer into the energy market by providing their economic maximum equal to or greater than the hourly forecast for each component of the hybrid. If there is a battery component, the offer should reflect the expected intermittent and storage output, including the “roundtrip efficiency of the battery.” The resource owner can use either PJM’s forecast or supply its own.
The changes also include adding a description of the formula used to determine lost opportunity cost (LOC) credits for hybrid resources that are instructed by PJM to charge to maintain reactive reliability. Resources are eligible for credits when locational marginal pricing (LMP) is lower than its offer.
The changes rewrite portions of Manual 11: Energy & Ancillary Services Market Operations, Manual 27: Open Access Transmission Tariff Accounting and Manual 28: Operating Agreement Accounting.
Stakeholders Endorse Market Suspension Rules
The MIC endorsed a slate of revisions to Manuals 6, 11, 28 and 29 to conform with a 2023 FERC order approving a PJM proposal to define how it proceeds with settlements under a market suspension. (See “First Reads on Manual Revisions,” PJM MIC Briefs: April 2, 2025.)
The filing established three sets of rules for determining real-time prices when suspensions last less than six hours, between six and 24 hours, or for longer periods. Shorter suspensions would average real-time prices for each hour before and after the outage; moderate-length outages would use day-ahead prices if available or an average of real-time prices for the intervals before and after the suspension began; and suspensions longer than a day would use an aggregate supply curve (ER23-1431).
For the day-ahead market, prices would be set to $0/MWh and real-time output and prices would be used to determine settlement.
Regulation compensation would be based on a market-clearing price calculated by PJM based on the average prices in the hour before and after a suspension lasting less than one day. For longer suspensions, the highest-cost resource in each hour would set the clearing price.
The price for synchronized, non-synchronized and secondary reserves would be based on the average price in the hour before and after a suspension for events shorter than six hours. If a suspension lasts between six hours and a full day, the day-ahead market-clearing prices would be used, and for events longer than a day, prices would be set to $0/MWh and LOC would be paid to resources.
PJM Presents on April 8 Reserve Shortage
PJM’s Brian Chmielewski presented information on a reserve shortage April 8 that caused shortage conditions to be declared in the RTO and Mid-Atlantic Dominion (MAD) subzone between 7 and 7:15 a.m. Colder-than-expected weather during the morning caused load to ramp up more quickly than forecast, limited ramping capability was available at the time and imports were scheduled to reduce by around 900 MW.
The event drove LMPs to $3,586.99/MWh at 7 a.m., with an RTO synchronized reserve deficit of 199.4 MW, a 792.6-MW primary reserve shortfall and 379.7 MW deficit in MAD, all of which was at the $850/MW penalty factor. Prices increased in the following 5-minute interval to $3,700/MWh before falling to $2,786.10/MWh at 7:10 a.m.
