1st Read on Offer Capping of Advance Scheduled Resources
PJM’s Phil D’Antonio presented a first read on a proposal to cap resources committed ahead of the day-ahead market at their cost-based offer. The proposal is set to be voted on by the MIC at its September meeting, and additional manual, operating agreement and tariff language would need to be drafted and voted on subsequently. (See “Offer Capping Resources with Advance Commitments,” PJM MIC Briefs: March 5, 2025.)
Advance commitments have been used more widely since the institution of the conservative operations procedure, which allows PJM to schedule resources expected to be necessary to maintain transmission security during strained operating conditions, especially winter storms. The cost of that practice has been criticized by consumer advocates, and the use of out-of-market commitments has been opposed by some generation owners. (See PJM: ‘Conservative Operations’ Maintained Reliability During Jan. 2024 Storm.)
Paul Sotkiewicz, president of E-Cubed Policy Associates, said PJM’s governing documents only allow for offer capping resources with advance commitments to address transmission constraints, arguing that offer capping resources committed for other purposes violates the tariff and negatively impacts price formation.
“I think this is going down a very dangerous path,” he said.
PJM’s proposal states that the “PJM tariff and [Operating Agreement] allow for offer capping only for transmission constraints. Current [Manuals 11 and 13] language allows offer capping for units scheduled in advance of the day-ahead market but does not have supporting tariff and OA language.”
Offer Capping Issue Charge Revised
The committee endorsed by acclamation an expansion of the offer capping issue charge brought by the Monitor to include additional consideration of the treatment of resources with advance commitments in the day-ahead market, how uplift is calculated for resources committed for multiple days and additional transparency into how resources are scheduled.
The issue charge was renamed to reflect the wider scope, removing references to offer capping to instead read as “resource scheduling prior to the day-ahead energy market.” (See “Monitor Proposes Rewrite of Offer Capping Issue Charge,” PJM MIC Briefs: July 9, 2025.)
The revisions also add additional education on the triggers for allowing advance commitments, notifications that go out to stakeholders that such action has been taken, commitment instructions to resources, the inputs and models that determine commitment parameters and operational constraints not included in unit parameters, such as fuel inventory, gas nomination cycles and any run hour limitations associated with environmental permits.
Renewable Dispatch Proposal Endorsed
Stakeholders endorsed a PJM proposal to create a new Effective EcoMax parameter for wind and solar resources intended to better capture how they are capable of operating in real-time energy market dispatching. The proposal passed with 98.9% support. (See “First Read on Real-time Renewable Dispatch,” PJM MIC Briefs: July 9, 2025.)
The forecast for wind and solar output would be updated ahead of each five-minute interval, which then would feed into the Effective EcoMax parameter and update maximum output the generator can be dispatched up to. The existing EcoMax parameter limits security-constrained economic dispatch (SCED) based on the parameters submitted by resource owners, which can become stale and lead to units being curtailed below their potential.
The proposal was modified by PJM to retain curtailment flags for wind resources and establish them for solar as well; they had been set to be removed for all resources in July, but a Distributed Resources Subcommittee poll showed 96% support for allowing them for renewables.
Renewables would be limited to ramping at 20% of their ICAP per minute to minimize the volatility that can come from sudden shifts in renewable output. PJM’s Vijay Shah noted that still would allow those resources to go from 0 to 100% of their capability in a single interval.
Regulation Market Redesign Endorsed
The committee endorsed by acclamation a slate of manual revisions to conform with PJM’s regulation market redesign, which was approved by FERC in June 2024 (ER24-1772). (See “PJM Presents Manual Revisions for Regulation Market Redesign,” PJM MIC Briefs: July 9, 2025.)
The reworking of the market creates a single price signal with resources able to offer regulation up and down products, replacing a market model where participants offered bidirectional products to provide either Regulation A for long deployments or Regulation D for fast response. (See “PJM Presents Regulation Market Rework,” PJM MRC/MC Briefs: Dec. 20, 2023.)
The proposal includes revisions to Manual 11: Energy & Ancillary Services Market Operations, which detail offer structure, DR participation and lost opportunity cost credits; Manual 15: Cost Development Guidelines, including a stipulation that regulation resources also participating in the energy market do not receive variable operations and maintenance cost increases; and Manual 28: Operating Agreement Accounting, which outline the regulation clearing price credit formula.
