Markets and Reliability Committee

Demand Response Providers Seek Expanded Availability

VALLEY FORGE, Pa. — A group of demand response providers in PJM proposed adding two hours to the availability window that binds when the resource can be deployed by the RTO at the Markets and Reliability Committee meeting Feb. 22, arguing the current structure may be unfairly limiting DR participation in the capacity market. 

The availability window currently confines DR dispatch to between 6 a.m. through 9 p.m. during the winter, which would be expanded to 11 p.m. under the proposal. The summertime availability window of 10 a.m. through 10 p.m. would remain unchanged. 

Bruce Campbell of Campbell Energy Advisors said PJM’s assessment of winter risk has changed over the past decade and that there is untapped potential for load to contribute to meeting increased reliability risks identified in winter evenings. The shortcomings of the availability window, Campbell said, were highlighted by the revised risk modeling approach that was proposed out of PJM’s Critical Issue Fast Path (CIFP) process and approved by FERC in January. He argued that limiting DR participation when it can perform could violate FERC Order 719. 

The changes were proposed under PJM’s “quick-fix” process, which allows a problem statement, issue charge and solution to be considered concurrently. Campbell said the expedited process is being sought to allow the changes to be in place prior to the commencement of the 2025/26 Base Residual Auction. The proposal is sponsored by CPower, Enel North America, the PJM Industrial Customer Coalition (ICC), NRG Solutions and the Advanced Energy Management Alliance. 

Susan Bruce of the PJM ICC said the magnitude of the drop in the effective load-carrying capability (ELCC) class rating for DR following the CIFP changes came as a surprise for industrial participants, some of whom may rethink whether it remains a fit for them. She argued that the diminished ELCC rating, which is a major input in determining resource accreditation, sends market signals that DR’s reliability contributions aren’t needed at a time when PJM staff are sounding long-term resource adequacy concerns. Values that PJM presented during a Feb. 21 Planning Committee meeting showed DR’s ELCC rating going from 95% to 77%. 

Manuel Esquivel, Enel’s manager of RTO affairs for the PJM region, said the proposal is not trying to reverse the RTO’s ELCC class ratings after the results have been published. Rather, it is meant to correct an issue that was raised throughout the CIFP process, including during stakeholder deliberations, in communications with the PJM Board of Managers and in comments to FERC on the filings. 

Calpine’s David “Scarp” Scarpignato said market changes affecting the ELCC values for one generation class would likely lead to changes for all resources, and with the auction months away, participants need certainty about their assets’ accreditation. 

Adam Keech, PJM vice president of market design and economics, said that when the reliability contribution of one resource changes for a single season, the balance risk between summer and winter will shift. Any other resource types that have stronger performance in one season would then see a change in their annual accreditation as their ability to match the risks on the grid varies. 

The issue charge also includes a third phase — following education and increasing winter availability — to explore either creating a DR product without an availability window or eliminating it for all DR. 

Campbell said there were some discussions about proposing shifting DR to be committable all day, but some providers were concerned about the number of customers that may not have load that can be curtailed at night. 

Other MRC Business

PJM’s Zhenyu Fan presented a quick-fix proposal to revise Manual 11 to reflect existing practices for interface pricing points, a mechanism that groups buses together when calculating LMPs for energy imports to, or exports from, external areas. The revisions also would include a recommendation from the Independent Market Monitor to align manual language to reflect the tariff requirement that PJM monitor interfaces at least annually. Fan said the most recent analysis does not suggest that any changes to interface weighing is required. 

PJM’s Michele Greening presented proposed revisions to the RTO’s tariff and Operating Agreement endorsed by the Governing Document Enhancement and Clarification Subcommittee (GDECS) mainly focused on clarifications and corrections. But several stakeholders said the recommended changes appeared to be more substantial than they believe is appropriate to implement through the GDECS process. Language that failed to receive unanimous support at the subcommittee include definitions relating to generation interconnection requests and the storage component of hybrid resources. 

Members Committee

TOs Considering Handing PJM Transmission Planning Filing Rights

The Transmission Owners Agreement-Administrative Committee (TOA-AC) is considering revising the Consolidated Transmission Owners Agreement (CTOA) to move filing authority over transmission planning from the Operating Agreement to the tariff, which would grant PJM the unilateral right to bring planning matters to FERC.  

Ratification of the changes would require agreement of the transmission owners and the PJM Board of Managers. 

The proposed revisions also would establish a dispute resolution process under which TOs first would attempt to resolve disputes through meetings with PJM or the board and initiating a nonbinding mediation process overseen by an alternate dispute resolution coordinator if talks were unsuccessful. The mediation process would be followed by regulatory or judicial resolution if necessary. 

Presenting the proposal to the Members Committee, Exelon Director of RTO Relations Alex Stern said allowing PJM to make planning-related filings as it sees necessary would bolster the independence of the board, increase PJM’s flexibility in reacting to needs it identifies and facilitate its goals in implementing long-term planning. He said the intent is for PJM to have independent planning authority, with stakeholders providing input. All other RTOs have comparable filing rights, he said. 

An example of the type of initiative PJM could undertake with the new authority, Stern said, would be proactively creating a process to plan and construct transmission in support of offshore wind. 

Steve Nadel of PPL said it’s highly irregular for the stakeholders to have filing rights under Federal Power Act Section 205 over planning. 

“By restoring filing rights to the utility, which is PJM, no one would lose any rightly granted authority,” he said. “This is designed and intended to be a restoration of the correct allocation of authority.” 

Reading the unanimous comments of the Organization of PJM States Inc., President Kent Chandler, also chair of the Kentucky Public Service Commission, said the revisions appear overly broad and asked the PJM board to wait until the end of March before making any decision on agreeing to the changes to allow stakeholders to provide fully informed comments. 

Speaking for himself, Chandler said the changes would erode the board’s independence, allow TOs to build more costly projects over more efficient routes and would not benefit consumers. 

Referencing a provision that would institute an annual meeting between PJM and the CTOA parties to discuss the agreement, the PJM ICC’s Bruce said TOs may retain higher access to the RTO to sway how it uses the proposed filing rights even if all stakeholders are on the same advisory footing under the language. 

“We’re not getting the same access, if you will, between PJM and the transmission owners. … We will not have, for example, a state of the union, if you will, meeting,” Bruce said. 

While she said consumers often want to see PJM take a more authoritative stance, Bruce said she’s concerned that granting PJM sole Section 205 filing authority could make investors wary of the RTO, as they could lose some control over assets at the intersection of planning and markets. 

Vitol’s Jason Barker asked how it can be ensured that proper stakeholder deliberation is held when planning and markets overlap, to which Stern said PJM would have to use the added authority responsibly. Stern acknowledged there is concern associated with affording PJM greater independence from all stakeholders, including TOs. However, the TOs believe those concerns are outweighed by the benefits, Stern said.

John Horstmann, senior director of RTO affairs for Dayton Light and Power, said the TOA-AC is scheduled to discuss the proposal March 15 and could vote on approval that day. He said the CTOA is an agreement between PJM and member TOs, making approval an issue to be decided by the board and TOA-AC rather than the MC. 

Jackie Roberts, federal policy adviser to the West Virginia Public Service Commission, questioned the pace of considering approval in the next month and urged the TOs to give members and state commissions more time to understand the implications of the changes. 

“I have heard no reason why this is a hair-on-fire must-do-right-now proposal,” she said. 

Board Chair Mark Takahashi said he sees value in expanding PJM’s filing rights, speaking as an individual board member, but the board has not considered the details of the proposal yet. He said the board will meet Feb. 28 to discuss it further, adding it will not be rushing to a decision. 

“There’s a lot to do here with planning and we really want to work with stakeholders and members,” he said. 

The proposed amendments were brought by the American Electric Power Service Corp., AES Ohio, Exelon Corp. and PPL Electric Utilities Corp. In a letter to the TOA-AC, the TOs argued that granting PJM filing authority over planning would give it the independence needed to face new challenges. 

“The sponsors also recognize points expressed by PJM states and stakeholders that PJM is too reactive and not able to advance important regional transmission planning reforms. The timing is right to refresh the CTOA to best position PJM, and the region, to meet the challenges of today and tomorrow. These revisions enhance PJM’s independence to conduct regional transmission planning within its existing scope of responsibilities and place PJM on similar footing with other RTOs,” they wrote. 

“It is critical that PJM has every tool at its disposal,” Stern said. “With generation deactivations accelerating, energy demands increasing and a portfolio of new generation waiting to interconnect, PJM’s ability to ensure future reliability and affordability for customers is critical and would be enhanced by PJM having Federal Power Act Section 205 rights over the transmission planning protocol.”