The PJM Markets and Reliability Committee endorsed by acclamation an issue charge to explore how the performance of demand response and price-responsive demand (PRD) resources can be improved.
According to the accompanying problem statement, the six load management deployments in this summer had a weighted average performance of 67%, which is “significantly lower” than was observed during tests conducted in the 2024/25 delivery year and the actual performance in past years. It states that shrinking reserve margins are likely to require more regular DR and PRD dispatching. The committee approved the document during its Nov. 20 meeting.
“PJM seeks to ensure that stakeholders understand the existing load management dispatch process (and PRD required response) and the measurement and verification calculations used to determine Capacity Performance and real-time energy settlements,” it says.
It notes that the circumstances under which DR and PRD could be used were expanded in the 2024/25 delivery year to allow deployments outside a performance assessment interval (PAI). When a PAI is not active, demand-side resources are not subject to CP penalties if they do not perform and they can use historic test results to replace actual performance during a non-PAI event.
The Independent Market Monitor has pointed to the lack of penalties and the ability to substitute actual performance with test results as part of its opposition to expanding load flexibility as part of the Critical Issue Fast Path (CIFP) process focused on how to address rapid large load growth.
“Demand-side response when called is effectively voluntary based on the relatively weak incentives to respond, despite the fact that the tariff states that reductions are required. If demand-side resources do not respond when called, any actual performance penalties can be overridden by test results, if the performance issue is not during a PAI event,” the Monitor wrote in its State of the Market report for the third quarter.
Greg Poulos, executive director of the Consumer Advocates of the PJM States, said the poor performance of demand-side resources casts a cloud over the CIFP proposals voted on by the Members Committee during its Nov. 19 meeting. (See related story, PJM Stakeholders Reject All CIFP Proposals on Large Loads.)
The issue charge envisions “solutions that will improve performance when load management is dispatched, or PRD is required to respond, and ensure applicable tariff requirements associated with performance are met.”
The expected changes the issue charge lists are fairly broad, leaving the door open to “process and/or system changes” and corresponding changes to the governing documents and manual language. Implementation is targeted for the 2028/29 Base Residual Auction, which is scheduled to be conducted in June 2026, and a tariff filing is expected in late April.
Paul Sotkiewicz, president of E-Cubed Policy Associates, said his client J-Power USA could not support the issue charge without a wider scope inclusive of how DR participates in the energy market. Adding a requirement that demand-side resources offer into the energy market should be on the table, he said.
Aaron Breidenbaugh, senior director of regulatory affairs at CPower Energy Management, said the energy and capacity markets do not always provide enough compensation to cover the costs of a curtailment. Trying to develop a cost-based offer structure for the resource class could take as long as a year.
