The Markets and Reliability Committee rejected three proposals to revise aspects of PJM’s effective load-carrying capability (ELCC) accreditation model, which has been criticized as opaque and lacking incentives for resource owners to invest in boosting performance. 

The PJM proposal, which received 30.7% sector-weighted support, would introduce a “forgetting factor” to weigh resource performance during more recent performance assessment intervals (PAIs) more heavily. The RTO said that would allow modeling to more quickly reflect improvements made to units without fully erasing historic data or relying on counterfactuals. It also would align the days performance is drawn from with the respective weather and load scenarios, establish winter capacity ratings and produce detailed documentation on how the ELCC model functions. 

When building load models for future delivery years, the historic weather data is shifted six days backward and forward to develop 13 scenarios for each year back to the 1993/94 delivery year. PJM’s Pat Bruno walked the committee through an example where the analysis for Aug. 9, 2026, would draw weather data from each year between 1994/95 and 2024/25, with each year including data from Aug. 3 through Aug. 15. He said those extra days effectively have downplayed the correlation between resource performance, weather and load. 

The winter capability portion of the proposal would create parallel installed capacity (ICAP) and capacity interconnection rights (CIRs) for the winter by analyzing how resource outages and capability differ with ambient conditions and how that output is deliverable during those months. Resources with capacity commitments would see their energy market must-offer requirements and seasonal capability tests based on their winter ICAP rating. 

Several generation owners argued that including higher winter ratings when determining the output a resource is expected to be able to provide during a PAI could result in units with higher capability in the winter being penalized for not being able to match that performance during a summer event. 

Bruno said annual ratings are meant to reflect possible output across all risk hours in a delivery year, including periods where a resource is expected to over- and under-perform. He compared it to the accreditation for solar resources including the possibility of a PAI occurring during the night. He said the incremental winter capability would add a significant amount of supply to the 2028/29 Base Residual Auction (BRA), between 800 MW to 1 GW, largely by improving the capability of wind resources. 

Sensitivity analysis PJM ran on its proposal using the 2026/27 auction as a base case found that the alignment of the weather rotation data would increase the installed reserve margin (IRM) by 3.3%, shift seasonal loss of load hours (LOLH) toward the winter by 18% and reduce the unforced capacity (UCAP) margin by 4 GW. Winter ratings would decrease the IRM by 1.1%, reduce the winter share of LOLH by a third and increase the UCAP margin by 1.8 GW. The performance weighting factor would have minimal impact on the IRM, while increasing the winter LOLH by 4%. 

Stakeholder perspectives on the proposal were mixed, with many arguing there is not sufficient understanding of how ELCC functions nor the outcomes the proposed changes might have. Consumer advocates and some generation owners also said it overstates weather and correlated outage risks. Supporters said it is not a panacea for their concerns with ELCC, but one step toward improving the paradigm. It received the strongest support from the other suppliers sector, at 54.5% voting to endorse, followed by generation owners at 45.8%, transmission owners at 42.9%, end-use customers at 5.9% and electric distributors at 4.2%. 

Paul Sotkiewicz, president of E-Cubed Policy Associates, said he doesn’t believe there’s sufficient transparency on the functioning of the ELCC modeling to vote on changes to its methodology, noting the Board of Managers has directed PJM to bring on a consultant to review ELCC and “identify additional recommended enhancements.” He said the 0.2 value for the exponential smoothing used in the performance weighting is arbitrary and the proposal overall aims to address correlated outage risks he does not believe exist. (See “Board Overrides Stakeholder Rejection of Auction Parameters, Directs Hiring of Consultant,” PJM Board Initiates CIFP Addressing RA, Large Loads.) 

Gregory Pakela, manager of regulatory affairs for DTE Energy Trading, said the RTO’s proposal ignores changes PJM has made in its operating procedures that have had a significant impact on resource performance and system risks, namely the addition of capacity performance (CP) and advance commitments through conservative operations. While the correlated outage risks may continue to exist with gas generation, he said that should be further investigated through a study before making market changes. 

James Wilson, a consultant for several consumer advocates, said the aligning of weather and performance days further exacerbates overstated extreme weather risks caused by outlier data associated with winter storms in January 1994. 

Dominion’s Jim Davis said the proposal provides a reasonable incremental improvement to ELCC and asked that PJM continue pursuing transparency improvements allowing resource owners to verify their accreditation regardless of the outcome of the MRC’s endorsement. 

“We shouldn’t let the perfect be the enemy of the good here,” he said. 

LS Power’s Tom Hoatson said the company has had success replicating the ELCC modeling and managed to produce results similar to PJM’s, making the methodology less of a black box. While there are additional improvements the RTO can make to ELCC, he said the proposal would be an improvement, particularly the winter CIR component. 

ODEC Proposes to Reduce Winter Storm Elliott and Polar Vortex Weighting

The Old Dominion Electric Cooperative (ODEC) offered an alternative adopting the changes in PJM’s proposal and reducing the probability of the Monte Carlo simulation built into the ELCC model selecting performance data from the December 2022 Winter Storm Elliott or the 2014 polar vortex by 33%. The proposal received 63% sector-weighted support, with electric distributors unanimous in their endorsement, 94.1% of end-use customers in support, 58.3% of other suppliers, 37.5% of transmission owners and a quarter of generation owners. 

Reducing the weight of those storms aims to reflect that PJM has made changes to its operations around winter storms which reduce the likelihood of the poor performance seen during those events from recurring, ODEC’s Mike Cocco said, pointing to the addition of CP and conservative operations. Including the data from those storms without some acknowledgment of the changes PJM has made would result in overly conservative accreditation and create a paper capacity shortage on top of a burgeoning actual shortage. 

He compared the 24% forced outage rate during Elliott with the 9% outage rate observed during the 2025 Martin Luther King Day storm. Both events had similar weather patterns and occurred during a holiday weekend, periods where gas procurement has proved challenging, but the latter saw a 63% lower forced outage rate he attributed to advance resource commitments PJM secured through the conservative operations protocol. 

PJM Senior Vice President of Operations Mike Bryson said the RTO engaged in a lot of review after Elliott and made operations improvements but can’t quantify those impacts. 

Pakela argued that PJM’s proposal ostensibly appears more sophisticated than ODEC’s, but the same results could be reached by changing the arbitrary 0.2 exponential smoothing value. While PJM has pushed back on approaches that would rebalance the winter-skewed risk modeling toward the summer, he said there have been several pre-emergency operations declarations, shortage pricing events and load management deployments in summer 2025. 

Even though there have not been any PAIs, there were reserve shortage events not captured in the ELCC modeling which he says support a shift toward summer risk, particularly given the growing concerns around large load growth pushing summer peaks higher. 

PJM Vice President of Market Design and Economics Adam Keech said while there may be more summer capacity deployments, the magnitude and duration of winter events tend to be much greater. 

Monitor Proposes Alternative Approach to ELCC

A proposal from the Independent Market Monitor would jettison all elements of PJM’s proposal and replace it with three components: remove all unit performance data from Elliott and the polar vortex from the ELCC modeling on the grounds they are not indicative of future resource performance, make ELCC unit-specific and include the full winter capability of thermal resources. 

For new resources, accreditation would continue to be based on a class average with unit-specific data rolled in over time, similar to the precursor to ELCC — equivalent forced outage rate demand (EFORd). 

Vistra’s Erik Heinle argued eliminating performance data would disincentivize good performance by sending a signal that PJM will erase data from events with large-scale under-performance. 

Bowring said PJM changed its operational approach after the commitment and dispatch mistakes of Elliott that led to the poor performance during the storm. 

“Given those changes, illustrated by PJM’s conservative operations during Polar Vortex 2025 in January, the performance during Elliott is not a useful risk metric,” he said. 

He said PJM’s “forgetting factor” arbitrarily changes weights rather than relying on logic and actually increases the weight of Elliott in the ELCC calculations. He added PJM’s ELCC for gas-fired combined cycles is only 75% based on Elliott performance data, while that ELCC is 96% on a forward-looking basis. 

“No one other than PJM thinks that combined cycles are only 75% reliable,” Bowring said. 

Bowring also said while it is appropriate to recognize the increased winter capability of thermal resources, PJM’s approach would arbitrarily increase the measured capability of thermal resources year-round, exposing generators to the risk of not meeting their maximum winter output even during the summer when maximum output is appropriately lower. 

The Monitor’s proposal received 35.8% sector-weighted support, with end-use customers unanimously supporting it and all other sectors voting with a quarter or less in support.