Stakeholders Endorse Proposal to Add Transparency to ELCC

VALLEY FORGE, Pa. — The PJM Markets and Reliability Committee endorsed by acclamation a proposal intended to add transparency to the RTO’s effective load-carrying capability (ELCC) process and how the ratings it produces contribute to resources’ capacity accreditation. (See “PJM Presents Proposal to Add Transparency to ELCC,” PJM MRC/MC Briefs: April 23, 2025.)

Providing more information to generation owners about the amount of capacity their units can provide is one of several areas where stakeholders have sought to make changes through the ELCC Senior Task Force. The MRC endorsed a proposal in March to add two resource categories and limit the Capacity Performance deficiency penalty rate for units whose accreditation falls between a Base Residual Auction and Incremental Auction. (See PJM Stakeholders Endorse Proposals to Rework ELCC Accreditation.)

The transparency proposal would create an exception to PJM’s confidentiality requirements to allow market sellers to request data showing the historic performance of the resource through June 2012, even if that extends prior to the owner’s acquisition of the asset. Proponents argued those data are integral to understanding how PJM determines the inputs driving the unit’s ELCC rating.

Before rounds of ELCC analysis are initiated, pre-study stakeholder sessions would be held to review the assumptions and updates to data inputs PJM is considering. Additional sessions would be held once the analysis is complete to discuss the results. PJM also would publish an annual report outlining the assumptions, methodology and results of the ELCC analysis, including any sensitivities.

More sensitivities could be conducted after the analysis, such as developments in the load forecast, weather data or resource performance.

Independent Market Monitor Joe Bowring asked PJM to produce a legal opinion outlining its perspective that it can share confidential information from a prior resource owner to a new owner without permission from the former. PJM legal staff said their client is the RTO, not the Monitor, after which a member also requested more information on PJM’s legal reasoning.

Discussion of CETL Deferred

The MRC voted to delay consideration of an issue charge focused on a “disconnect” between PJM’s winter-skewed risk modeling and the use of summer peaks to calculate capacity emergency transfer limits for locational deliverability areas. (See “LS Power Seeks Issue Charge to Align CETL Calculation with Winter Risk,” PJM PC/TEAC Briefs: Oct. 8, 2024.)

LS Power Director of Project Development Tom Hoatson, who made the motion to defer, said he believes the issue is intertwined with the concept of a seasonal capacity market and suggested the two should be discussed together. He also said the stakeholders and PJM engineers who would lead the work are the same employees engaged with discussions on other areas of the ELCC paradigm, presenting workload challenges.

Greg Poulos, executive director of the Consumer Advocates of the PJM States (CAPS), said the issue charge, which was sponsored by LS Power, was well developed and broached an issue of importance to consumer advocates. He said they could support a delay of a few months, but not longer.

The motion to defer until “stakeholders undertake work on a seasonal capacity construct” was endorsed with the support of all sectors except end-use customers.

Stakeholders Torn on Further SATA Education

Stakeholders held mixed perspectives on whether to recommence work on an issue charge seeking to establish rules for storage acting as a transmission asset (SATA), with some feeling more education is warranted and others arguing it’s time to move on to proposal development.

PJM Director of Stakeholder Affairs Dave Anders said that, after a series of presentations at the Operating Committee in recent months, he believes the education component of the work has run its course and said the issue charge is slated for an endorsement vote at the MRC’s June 18 meeting. He added that approving the issue charge does not mean further education and stakeholder discussion cannot happen.

The committee voted in October 2024 to delay acting on the issue charge until PJM had completed education sessions at the OC, both to allow stakeholders to focus on several capacity market proposals being considered at the time and to bring them up to speed on a SATA proposal last considered in 2021. The OC’s sessions focused on the 2021 proposal, how SATA could impact operations and FERC’s regulatory authority. The issue of developing rules for SATA was brought by PJM in September 2024, nearly four years after members voted to delay further activities on the subject until market rules for storage had been established. (See “Vote on Issue Charge to Establish SATA Rules Deferred,” PJM MRC Briefs: Oct. 30, 2024.)

Constellation Energy’s Juliet Anderson said there are unanswered questions around where SATA would fall into the federal and state jurisdictions over transmission and distribution networks. She noted that the October 2024 deferral delayed action on the issue charge until education at the OC had been completed.

Bowring asked whether PJM believes it’s appropriate to proceed without a more complete understanding of how SATA could impact market operations. Anders responded that market impacts fall under the issue charge’s key work activity 6.

Poulos said most issue charges have a significant educational component, so it’s surprising to him there’s opposition to continuing that work here. He said SATA is a priority for advocates who see it as a valuable tool for resolving reliability issues, and they’re frustrated that barriers are being put up to having the subject discussed further.

Exelon Director of RTO Relations and Strategy Alex Stern said there have been several discussions over the past five years to determine whether storage can act as transmission. In that time FERC has issued policy statements, and other RTOs have developed their own rules, while PJM has been blocked artificially from advancing the discussion by stakeholders using pre-education as a pretext for delay, he said. Whether or not stakeholders want to proceed with establishing a SATA framework, he said, their position should be made clear and communicated to the states, which have been pushing for increased storage deployment.

“I’d just as soon like to know whether this is something we can have in the toolkit or not,” he said.

PPL’s Robin Lafayette said SATA has been discussed at more than 30 meetings and is clearly a tool PJM believes it needs to have available.

“Other ISOs and RTOs have found ways forward on this issue, and I do acknowledge some of the issues raised by some of my colleagues on interactions with the markets,” he said. “PPL strongly supports trying to find a way forward on this issue; even if it is a targeted, limited tool, it could be a valuable one.”

1st Read on Uplift Formula Proposal

PJM Senior Director of Market Settlements Lisa Morelli presented a first read on a proposal to rework how balancing operating reserve (BOR) credits are calculated, including a new metric to determine whether a resource is following dispatch signals. (See “Stakeholders Narrowly Endorse Uplift Changes,” PJM MIC Briefs: April 2, 2025.)

The proposal would replace the three desired megawatt metrics used to determine deviation charges with a new tracking ramp-limited desired (TRLD) metric, which would compare actual output to how a resource should be operating if it had followed dispatch instructions. Morelli said the existing metrics are limited to how dispatch instructions and resource output change over five-minute intervals, which can mask when a resource is deviating from instructions by small amounts over a long period, particularly because there is a 10% margin before a resource is found to be deviating.

The BOR credit formula also would be revised to take the lesser of real-time output or the TRLD, adjusted for a unit’s ramping parameters. The period for which a resource is eligible for uplift also would be realigned to when its commitment began and continue through either the minimum run time parameter or the end of the commitment.

Depending on how a unit operates, the proposal either could lead to increased uplift payments or higher deviation charges, Morelli said, adding that PJM and the Monitor, which jointly sponsored the proposal at the Market Implementation Committee, aimed to take a balanced approach to how uplift would be affected by the proposal, rather than just reducing the amount of uplift paid.

If endorsed, a soft launch would be rolled out at the end of 2025 or early 2026, starting with calculating how the TRLD would affect settlements and communicating that to market sellers through their Market Settlements Reporting System reports. Changes to actual settlements would not come for another year once the full implementation begins.

Gregory Pakela, manager of regulatory affairs for DTE Energy Trading, said the proposal could have significant impacts during periods of high system stress and asked if PJM could conduct backcasts on how it would have changed settlements during the two winter storms in early 2025, when conservative operations were initiated.

Morelli said PJM has conducted limited backcasting, but there’s a balance between the number of staff hours that fully recalculating results would take versus the benefits. She said PJM is comfortable that the proposal is worth moving forward with.

Vistra’s Erik Heinle said the phased implementation process allows market participants to have more understanding of how their resources would fare under the proposed paradigm. Having the opportunity to spend a year understanding how TRLD would determine when a unit is following dispatch and the ability to update the unit’s parameters based on that information is crucial, he said.