On Feb. 28, the MRC endorsed changes to PJM’s system restoration procedures and methods for selecting black start units.

Reason for changes: The MRC acted in response to anticipated changes in PJM’s roster of black start units, Environmental Protection Agency regulations and a desire to increase cross-zonal coordination. Plant retirements are expected to eliminate one-third of PJM’s black start capacity by the end of 2015. The retirements are being driven by EPA mercury and air toxics (MATS) regulations and New Jersey’s High Electric Demand Day (HEDD) rules. The cost of complying with these environmental rules has undermined the economics of coal-fired generation  at a time of cheap natural gas.

PJM, the Market Monitor and stakeholders in the System Restoration Strategy Senior Task Force agreed on this unified proposal.

Impact: There are several major changes:

• The critical load definition is changed  to include all generation that can start within four hours. The previous definition was limited to “critical steam units with a hot start time of 8 hours or less.” This will increase the capacity targeted for use of cranking power by 70,000 MW.
• Potential black start units will be defined as those able to respond within three hours (up from the current 90 minutes), adding 64,000 MW of black start capability. About 2,000 MW of this total could act as black start units without plant modifications.
• Black start units in one zone will be allowed to help restart generation in neighboring zones, allowing more efficient use of existing resources.
• PJM will issue an RFP for black start generation every five years (see Manual 14D, Section 10: Black Start Generation Procurement). Minimum length of commitment will remain two years (or longer based on capital recovery time).

The proposal did not include changes in compensation for black start units or allocation of costs across zones, which will require OATT revisions and FERC approval.  A FERC filing is expected in the second quarter of 2013. The five-year request for proposals is expected to be issued in the third quarter, with contracts effective in April 2015.

The proposal was approved with no objections and three abstentions. It includes:

• Manual 12: Balancing Operations – Section 4.6: Wording edits.  Deleted Section 4.6.8 and 4.6.9 due to elimination of 3 BS unit per plant restriction
• Manual 14D: Generator Operational Requirements: Addition of five-year selection process
• Manual 27: Open Access Transmission Tariff Accounting: Updated Section 7 to reflect cost allocation changes and TO Revenue requirements for cranking paths
• Manual 36: System Restoration:
  • Minor updates to sections 6.2, Cranking Power and 8.1.1 Ascertaining System Status.
  • Created new section 9 on Cross Zonal Coordination.
  • Major edits to Attachment A to reflect changes in critical load, Black Start requirements and the reliability backstop process.
  • Minor changes to Attachment D – Drill Guide

PJM Contact: Chantal Hendrzak