PJM will continue its current methods for calculating wind farms’ operating reserve charges and allocating costs of its wind forecasting tool.
The Intermittent Resources Task Force concluded a six-month review last month without reaching consensus on any proposed changes to the current methods.
The task force’s 2008 charter included an assignment to “recommend methodology for allocating wind production forecasting costs, and potential changes to how operating reserve charges are applied to intermittent resources.”
Balancing Operating Reserves (BOR) are calculated for wind resources the same as for non-intermittent resources: Resources can earn reserve credits by following dispatch instructions; those that fail to do so are ineligible to earn credits and are charged for deviations.
PJM’s wind power forecasting tool, used to ensure scheduling of sufficient generation in the day-ahead market, costs $135,600 annually. The cost is allocated RTO-wide, based on transmission use, through PJM’s monthly Schedule 9-1 charges.
“We wouldn’t have a need for this tool but for the wind technology and the issues it creates for the rest of the system,” said one member in a Market Implementation Committee discussion of the task force’s findings last week.
The task force concluded, however, that because accurate forecasts improve system reliability, the costs should continue to be spread among all market participants. A proposal to assess the costs solely to wind projects, with offsets in operating reserve charges, won support of only 10% of the task force.
Another member noted that the RTO-wide cost allocation is consistent with how PJM pays for its hydropower scheduling software.
Editor’s Note: PJM Insider is withholding the names and organizations of the speakers in accordance with the PJM Code of Conduct (Section 4.5 of Manual 34). The code prohibits quoting members by name or organization without their approval for all meetings other than those of the Markets and Reliability and Members committees.
