Demand response (DR) providers will face increased scrutiny and be required to provide additional documentation under changes approved by the Market Implementation Committee March 6.
The new rules require Curtailment Service Providers (CSPs) bidding into the capacity auction to have a company officer sign a certification attesting to the company’s intent to physically deliver MWs. Bids will be made through an offer template to increase the consistency of information supplied. PJM also will increase its scrutiny of delivery zones in which CSPs’ bids exceed DR penetration thresholds.
Not Specific Enough
PJM’s transmission planners said the information currently provided by CSPs is not specific enough to allow modeling of the quantity and location of DR in reliability planning.
PJM staff also found that DR offered in the 2015/16 Base Residual Auction (BRA) exceeded 20% of the Preliminary Zonal Peak Load Forecast for some zones, raising concerns that DR providers’ bids are overly optimistic.
The MIC considered four proposals and voted to send two to the Markets and Reliability Committee for further consideration.
Zonal Screens
PJM staff’s proposal, which was endorsed by 81% of MIC voters, would “flag” a zone for increased scrutiny based on the higher of the following screens:
- maximum zonal DR penetration (percentage of zonal peak) as determined based on the “Expanded Business as Usual” scenario in a 2009 FERC study, or the
- maximum zonal registered DR from past delivery years (expressed as a percentage of zonal peak).
A zone will be flagged if the projected DR resources exceeds the screen. Once identified, zones will remain flagged for at least three years. CSPs bidding in a flagged zone will be required to provide additional information for their end-use customers. (For commercial and industrial customers: name and address, business segment, and electric distribution company account number if known. For residential customers: estimated number of customers, estimated nominated per customer capacity value.)
Overlapping MWs
Overlapping MWs — those offered by more than one CSP — will not clear in the auction unless supported by evidence, such as a letter from the customer.
The other three proposals considered by the MIC differed from PJM’s only on the application of the screen used to flag zones. Two proposals received less than 25% support.
The fourth, by Market Monitor Joseph Bowring, won support from 73% percent of voters and will be a secondary proposal before the MRC. Bowring’s proposal would calculate penetration levels net of megawatts bought back by CSPs or other participants, as determined based on previous auction results. “The idea is to determine megawatts which need to be documented more clearly,” Bowring explained. Megawatts that are bought back “are not going to physical.”
Bowring had offered his proposal as a “friendly” amendment to the PJM plan. PJM rejected the amendment, saying it could make it difficult for CSPs to fulfill their obligations through long term contracts.
PJM Contacts: Joe Callis, Jeff Bastian
