PJM’s Market Monitor told the Federal Energy Regulatory Commission last week that rule changes approved by PJM stakeholders to increase the flexibility of demand response are insufficient and that the commission should impose a must-offer requirement similar to that for generation resources.

Monitoring Analytics asked that its complaint (EL14-20) be merged into docket ER14-822, in which FERC is considering the proposed changes.

Current rules require PJM operators to provide two hours’ notice before dispatching DR. Under the proposal approved by PJM stakeholders in December, resources will be dispatchable in 30 minutes.

The new rules also limit the “Emergency DR” designation to resources using back-up generators that are subject to environmental permits. Other resources will be known as “Capacity DR.” In addition, the minimum event duration will be reduced from two hours to one hour and the strike price will be reduced. (See Members OK DR Dispatch Rules after Late Amendments.)

The Monitor said the proposed changes fail to address all of the disparities in PJM’s treatment of DR and other capacity resources. It said FERC should limit DR’s offer cap — now effectively $1,800/MWh — to the $1,000 allowed generators.

“The current rules allowing non comparable demand resources are unjust, unreasonable and unduly discriminatory, and PJM should be directed to take immediate action to correct this design flaw,” the Monitor wrote.

In a filing in December (ER13-2108), four Ohio utilities, FirstEnergy, AEP, Dayton Power & Light and Duke-Ohio, also called on FERC to impose a must-offer requirement on DR. The lack of such a requirement obscures the cost of energy in high demand periods, resulting in higher production costs and uneconomic dispatch of DR, the utilities said. A must-offer obligation would allow PJM operators to dispatch DR economically rather than as a block, they said. (See Generators: Ban Planned DR.)