By Suzanne Herel
FERC last week rejected a request by consumer advocates that it force PJM to update its 2015 peak load forecast using recent modeling enhancements to prevent over-procurement of resources in this year’s capacity auctions.
“While there will inevitably be some difference between PJM’s load forecast and the amount of capacity that PJM ultimately needs in a given delivery year, the record indicates that PJM has taken steps to ensure the reasonableness of the 2015 load forecast, including making a statistical adjustment based on a percentage of error it had seen in the load forecast over recent years, to account for the effects of energy efficiency programs,” the commission said (EL15-83). “The mere fact that PJM is working on a revised forecast methodology does not render the prior one unjust and unreasonable.”
The complaint was filed in June by a group that included industrial customers, environmental organizations, state regulators and consumer advocates. It said that using updated methodology released by PJM in December would reduce the peak load forecast for 2016/17, 2017/18 and 2018/19 by at least 7,000 MW, potentially saving consumers more than $600 million. (See Model Change Results in Lower Load Forecast for PJM.)
PJM responded that the revised forecasting model would not be complete and ready for use until November, after the Base Residual Auction and transition auctions had been held. It was approved by PJM’s Markets and Reliability Committee last week. (See related story, MRC Briefs.)
Last week’s order denied the consumers’ request that the auctions be delayed — a moot point since they have already occurred.
The commission also rejected the complainants’ request that PJM be compelled to reinstate a 2.5% “holdback” that was eliminated in FERC’s approval of the new Capacity Performance product.
“The commission specifically found in the Capacity Performance order that the holdback was not necessary to address load forecast errors,” FERC said. “The issue of whether it is appropriate to remove the 2.5% holdback is currently pending on rehearing of the Capacity Performance order and will be addressed in that proceeding.”