PJM presented a quick fix proposal Dec. 3 to address instances in which offline generators are committed as secondary reserves and granted lost opportunity cost (LOC) credits, despite governing document language stating resources not synchronized have zero LOC. The quick fix pathway allows for an issue charge to be brought concurrent with a proposed solution.

The issue charge focuses on instances in which a resource that is offline when it is dispatched as secondary reserves comes online before that commitment begins. According to the problem statement, real-time security constrained economic dispatch (RT SCED) commits resources 10 minutes before each interval, but settlement is focused on revenue quality meter data when the commitment begins. If the resource begins injecting energy before the interval begins, it would appear as being online and eligible for LOC credits by the settlement calculations.

The proposal would use resources’ output at the time they are committed by RT SCED to determine if they are offline and, if so, set the real-time secondary reserve opportunity cost at zero.

1st Read on Flexible Resource Definition Clarification Issue Charge

PJM presented a first read on a problem statement and issue charge to reconsider how a resource is defined as flexible and eligible for LOC credits when committed in the day-ahead energy market on an offer with flexible parameters, but could be dispatched on schedules that are not flexible in real time. Under such circumstances, intermediate term (IT) SCED may not be able to determine whether the resource is economic and dispatch it.

The problem statement gave an example of a resource with a flexible cost-based schedule and an inflexible price-based schedule, which is committed on the former in the day-ahead market due to it failing the three pivotal supplier test when a transmission constraint is modeled. If that constraint does not materialize, IT SCED would revert to the price-based offer but be unable to evaluate whether it is economic due to the difference in the parameter flexibility. The resource would not be committed and would receive LOC credits for the duration of its day-ahead commitment on the cost-based offer schedule.

“Opportunities exist to consider whether a resource should be considered flexible for commitment and lost opportunity cost purposes if there are differences in startup time, notification time and min run time parameters amongst the available schedules,” the problem statement reads.

PJM’s Susan Kenney said the issue charge would explore whether the parameters in each of a resource’s offers should be reviewed before it is considered eligible for LOC credits.

Stakeholders argued there may be a deeper issue with the dispatching software if economic resources able to operate are not being dispatched.

PJM’s Brian Chmielewski said the issue is that regardless of whether a unit committed on a flexible schedule in the day-ahead run is economic, real-time dispatching is limited to evaluating all offers based on those flexible parameters.

The issue charge includes education on the definition of flexible resources, how they are committed and when a unit is eligible for LOC credits. It envisions changes to the RTO’s governing documents and manuals addressing LOC eligibility for flexible resources, with work expected to take around three months starting in January 2026. Changes to how IT SCED selects schedules would be out of scope.

Fuel Cost Policy Issue Charge

PJM and the Independent Market Monitor brought an issue charge seeking to address the potential for market sellers to inflate cost-based offers by acquiring fuel cost estimates from an affiliated supplier.

“There may be inherent incentives for a fuel supplier to provide a fuel cost estimate to an affiliated market seller or designated agent of such market seller that may not be reflective of the expected fuel cost or the market price. Such an outcome could be used by market sellers that have market power (e.g., fail the three pivotal supplier test) to potentially manipulate the market by obtaining a fuel cost estimate from an affiliated fuel supplier that may not reflect market pricing of fuel costs. Such an approach would allow market sellers to set energy prices at an uncompetitive level,” the problem statement reads.

The issue charge scope is limited to how fuel cost policies reflect affiliated suppliers of fuel versus independent third parties, while broader changes to the policies would be out of scope.