A proposed manual change on compensation for demand response prompted a protest from curtailment service provider Icetec Energy Services Thursday.
Icetec representative John Webster said one of the changes proposed by PJM goes beyond the ministerial detail included in manuals and should receive a full stakeholder hearing as a potential Tariff change. Webster said the change will have a “disproportionate impact on sophisticated end users with time-variable rates.”
PJM’s Pete Langbein, who presented the proposed manual change to the Markets and Reliability Committee Thursday, rejected Webster’s complaint, saying the changes are “absolutely consistent with the current Tariff.”
Under Order 745, PJM will compensate Economic DR at full Locational Marginal Price when it provides a net benefit to the system. Langbein said stakeholders asked for clarification on how PJM will apply the “net benefit” test.
In response, the Demand Response Subcommittee proposed that Manual 11: Energy & Ancillary Services Market Operations be revised to specify that compensation be limited to demand reductions executed in response to LMPs or PJM dispatch instructions and “that are not implemented as part of normal operations.”
The committee also recommended additional language identifying as ineligible for compensation: “Settlements based on load reductions from normal operations that would have occurred without PJM dispatch, or that would have occurred absent PJM energy market compensation.”
Webster said that addition will subject customers to a “motivational test” that will adversely impact those with time-variable rates — which he called “the next generation of demand response.”
