Stakeholders Endorse Changes to Storage Participation in Regulation Market

The Market Implementation Committee endorsed by acclamation a PJM proposal to allow demand response resources with behind-the-meter storage to participate in the regulation market when there is the capability for energy injections. (See “PJM Presents Education on Demand Response in Regulation Market,” PJM MIC Briefs: June 2, 2025.) 

The proposal would allow DR customers to participate as regulation-only resources when there is no load or a net injection at the point of interconnection, so long as they’ve received authorization from the relevant electric distribution company and it’s reflected in a net energy metering agreement. 

The change is part of PJM’s wider proposal to comply with FERC Order 2222, which is set to be effective Feb. 2, 2028 (RM18-9). 

Jay Marhoefer, CEO of Intelligent Generation, said tariff changes by certain EDCs that allow behind-the-meter storage to participate in the regulation market while injecting had the unintended consequence of voiding the PJM — and FERC-endorsed — process for allowing injection, either through a PJM interconnection service agreement (ISA) or wholesale market participation agreement (WMPA). 

Marhoefer said the proposal would recognize that certain utilities want to encourage regulation participation and can settle the injection. “There’s no engineering issue, there’s no technical issue, this is strictly an accounting issue,” he said. 

Independent Market Monitor Joe Bowring opposed the proposal as a one-off benefit to a small subset of market participants and argued that if the commission had intended for elements of PJM’s compliance filing to be implemented earlier, it would have reflected that in its order. 

PJM Presents Manual Revisions for Regulation Market Redesign

PJM presented a first read on a slate of manual revisions to conform with FERC’s approval of a redesign of the RTO’s regulation market (ER24-1772). The changes to the regulation market create one price signal with resources offering regulation up and down products, replacing a model with Regulation A for long deployments and Regulation D for fast response and bidirectional products offered by market participants. (See “PJM Presents Regulation Market Rework,” PJM MRC/MC Briefs: Dec. 20, 2023.) 

The changes to Manual 11: Energy & Ancillary Services Market Operations add detail to offer structure, DR participation, how regulation range limits affect resource clearing and lost opportunity cost (LOC) credits. PJM’s Joseph Tutino said the changes essentially create a new Section 3, expanding it by eight subsections. 

The Manual 15: Cost Development Guidelines revisions specify that cost increases for variable operations and maintenance (VOM) are zero for regulation resources also participating in the energy market, as those costs are recoverable in energy offers. It also updates references to regulation performance to instead read as regulation mileage. 

The Manual 28: Operating Agreement Accounting changes include the formula for the regulation clearing price credit and how shoulder interval opportunity costs are determined. 

First Read on Real-time Renewable Dispatch

PJM’s Vijay Shah presented a first read on a proposal to create a new Effective EcoMax parameter for wind and solar resources for dispatch in the real-time energy market. The proposal is set to be voted on by the MIC at its Aug. 6 meeting, followed by the Markets and Reliability Committee on Sept. 25 and Members Committee on Oct. 23. A FERC filing is envisioned in November or December. (See “2 Renewable Dispatch Packages Advance to MIC,” PJM MIC Briefs: June 2, 2025.) 

The parameter would use a forecast value of the resource’s capability for each five-minute interval, which is intended to better reflect how a unit will perform than the existing Eco Max parameter. Shah said PJM’s security-constrained economic dispatch is limited to dispatching resources up to Eco Max, which can prevent them from being set at their full output.  

Resources would be limited to ramping up to 20% of their installed capacity per minute to minimize volatility, which Shah noted still would allow them to increase to 100% in a five-minute interval. 

The proposal would retain curtailment flags for wind resources and establish them for solar as well. Curtailment flags for all resources are set to be removed in July. However, a Distributed Resources Subcommittee (DISRS) poll found 96% support for a variant of the proposal retaining them for renewables. 

During the June 2 MIC meeting, Shah said eliminating curtailment flags would require generation owners to follow their basepoints and avoid situations where intermittent resources with low marginal costs are curtailed because their bid-in parameters are lower than actual output, resulting in higher-cost units being committed. 

Monitor Proposes Rewrite of Offer Capping Issue Charge

The Independent Market Monitor proposed revisions to a problem statement and issue charge exploring how resources scheduled in advance of the day-ahead market have their offers capped to widen their scope to include transparency on how those resources are committed, how the commitments are communicated, which offers are used and how uplift is calculated, among other things. The original problem statement and issue charge were sponsored by PJM and supported by the Monitor in February. 

The changes add four key work activities to the issue charge: 

• • education on how PJM schedules resources ahead of the DA market, including triggers for those commitments, how market participants are notified, commitment instructions, inputs and models used to determine commitments, and constraints not included in unit parameters; 
  • consideration of more transparency on the process for advance commitments; 
  • updating the uplift calculation for units with multi-day commitments; and 
  • determining how units with advance commitments are treated in the DA market. 

Joel Romero Luna, market analyst with the Monitor, said the rules should be specific about the commitment instructions so generators know the amount of gas a resource should be procuring for a specific commitment. Leaving the instruction unclear can lead to resource owners buying more gas than needed and being compensated for fuel not used or can lead to resource owners not buying enough gas to match PJM’s expectations.