PJM Presents Issue Charge on Black Start Compensation
PJM’s Glen Boyle presented an issue charge focused on the potential for compensation for generators providing black start service to fall to zero in net cost of new entry (CONE) values in the 2025/26 Base Residual Auction (BRA).
The problem statement says the drop in black start compensation would be an unintended consequence of a drop in net CONE that is likely to continue, or continue to go lower, in the following delivery year. Compensation is determined by multiplying net CONE, the amount of black start service provided and a 0.01 modifier for hydroelectric generators or 0.02 for combustion turbines and fuel-assured black start units.
“This significant drop in revenues for resources on the Base Formula Rate may lead to black start units withdrawing from providing Black Start Service. This could result in reliability concerns or use of the reliability backstop if black start requirements can’t be met,” the problem statement says.
Since black start is a voluntary service, Boyle said PJM is concerned that without proper compensation, generation may exit the market and leave PJM unable to procure resources for all zones.
Stakeholders Endorse Expansion of Lost Opportunity Cost Credits for Renewables
The Market Implementation Committee endorsed revisions to Manual 28: Operating Agreement Accounting to include solar, hybrid and energy storage resources in the lost opportunity cost (LOC) credit calculation. The formula was developed for wind generation and is being expanded in accordance with FERC’s approval of PJM’s second phase of its hybrid resource rules (ER23-2484). (See “PJM Presents Conforming Revisions to Manual 28,” PJM MIC Briefs: Oct. 9, 2024.)
The calculation multiplies the LOC deviation by real-time locational marginal prices, minus the total LOC offer, all of which is then divided into 12 months. The deviation is based on actual forecast output.
PJM Drafting Second Cluster of CIFP Manual Revisions
PJM’s Skyler Marzewski presented the RTO’s timeline for seeking revisions to several manuals to implement aspects of its capacity market changes drafted through the Critical Issue Fast Path (CIFP) process last year and approved by FERC in January. (See FERC Approves 1st PJM Proposal out of CIFP.)
The changes include summer and winter capability testing, which would be codified in Manual 18: generation operational testing. That would require revisions to manuals 14D, 18 and 28, and attestation requirements for dual-fuel units, which would come with changes to Manual 11.
The manual revisions are set to go for first reads and endorsement votes at the MIC and Operating Committee in the first quarter of 2025, with an endorsement vote possible at the Markets and Reliability Committee at its April meeting. The changes are intended to go into effect at the start of the 2025/26 delivery year.
PJM Details Path Forward on Reactive Power
PJM Assistant General Counsel Thomas DeVita outlined PJM’s plan to remove the reactive power compensation component of the energy and ancillary service (EAS) offset in accordance with FERC’s order that RTOs cannot charge transmission customers for receiving reactive power within a standard range (RM22-2).
PJM was one of three RTOs granted a longer compliance filing timeline to allow for a transition mechanism for eliminating those revenues from its markets. But the commission specified that removing the reactive component from the EAS offset would need to be done in a separate docket apart from the compliance filing.
DeVita said PJM plans to seek that change as part of a Federal Power Act Section 205 filing being written to revise the reference resource and treatment of reliability-must-run units in the capacity market. (See “OPSI Speakers Discuss Future Auction Design,” Panels Debate PJM Capacity Market Design at OPSI Annual Meeting.)
Changes to the Tariff and Consolidated Transmission Owners Agreement would be required and are expected to be effective for the 2026/27 delivery year.
