PJM’s Market Implementation Committee passed by acclamation a PJM issue charge seeking to more thoroughly define how storage resources participate in the energy and ancillary service markets.
Much of the focus was on PJM’s obligation under FERC Order 841 to implement storage state of charge in its energy storage resource rules, as well as how lost opportunity costs (LOCs) are determined. The issue charge was revised after January’s first read spelling out that the LOC discussion should consider how the timing of PJM dispatch interacts with changing prices, emergency conditions and supply/demand balance.
The list of additional items for consideration was expanded to include cost-based energy offers, calculation of uplift, LOC rules for storage participating in energy and ancillary service markets, and whether pumped storage hydro resources should be part of the conversation. It also includes must-offer rules for storage resources with capacity commitments, intraday offers, cost-based offers and resource parameters.
The out-of-scope section includes changes to resource adequacy, performance assessment interval and effective load-carrying capability modeling for storage; surplus interconnection service; storage as a transmission asset; the pumped hydro optimizer; and peak shaving adjustments. A sixth key work activity was added for a possible second phase to explore out-of-scope topics.
The issue charge envisions governing document and manual revisions being drafted within six to nine months, which stakeholders said is an appropriate timeline given the numerous other market redesigns being considered.
Carl Johnson, representing the PJM Public Power Coalition, said it’s important that PJM’s planning and markets departments both be involved in the stakeholder discussion and remain aware of the changes being made. In particular, planning models should account for any changes to how storage resources offer into the energy market.
Constellation Proposes Dual-fuel Quick Fix
Constellation presented a quick fix proposal to revise the must-offer requirement for dual-fuel capacity resources to recognize that dual-fuel gas resources have a downtime when switching fuels. The quick fix process allows an issue charge and problem statement to be brought concurrent with a proposed solution. The proposal is set to be voted on by the MIC at its March 11 meeting.
The proposal would specify that a dual-fuel resource met its must-offer requirement so long as it submits offers including the primary and alternate fuels within “limitations or restrictions resulting from fuel switching time modeling within PJM’s software platforms.” The language would be added to the capacity resource offer rules in Manual 11: Energy & Ancillary Services Market Operations.
Stakeholders said there may be differences in how units switch fuels or in the details of that switching period. They said a broad change that applies to all dual-fuel resources could help avoid the must-offer requirement.
ARR and FTR Timeline
PJM laid out the schedule for the 2026/27 auction revenue rights (ARRs) and financial transmission rights (FTRs) markets. Stage 1A of the annual allocation begins on March 4 before moving on to stage 1B on March 10. Stage 2 begins on March 18.
Trading for ARRs begins on April 2, while the annual FTR auction starts April 8.
