Stakeholders Endorse Manual Revisions on DR and DERs

The Market Implementation Committee endorsed a package of revisions to Manual 18: PJM Capacity Market to eliminate the availability window and rework how the winter peak load (WPL) for demand response resources is determined and detail how distributed energy resources will participate in the capacity market under the RTO’s implementation of FERC Order 2222.

The proposal to model DR in all hours was approved by the MIC during its Feb. 5 meeting, replacing a ruleset that looked only at the reduction capability of DR resources between 6 a.m. and 9 p.m. in the winter and 10 a.m. to 10 p.m. in the summer under the effective load-carrying capability modeling.

Curtailment service providers argued that limiting the time in which a customer is considered available doesn’t account for those with flat load profiles and the resource class’s ability to react to risk being concentrated across a wider range of winter hours. Skeptics said the change could result in DR participants being paid to curtail overnight, when they are more likely to already be offline.

There also was disagreement over when the change should be implemented; CSPs advocated for targeting the 2026/27 Base Residual Auction to allow them to respond to an expected spike in clearing prices, while others argued there was little time before the start of pre-auction activities. The MIC endorsed implementation for the 2027/28 BRA. (See “Expanded Demand Response Modeling Endorsed,” PJM MIC Briefs: Feb. 5, 2025.)

The changes also redefine the WPL to measure each DR participant’s load at 9 a.m., which is the hour PJM argued best matches DR performance with system needs. The RTO argued that continuing to derive the class-wide WPL from each customer’s peak at any hour within the availability window overstates the curtailment capability since those peaks are not expected to coincide. (See PJM Stakeholders Endorse More Detailed Demand Response Modeling.)

PJM Plans to Request 1-year Extension of RMR Resources Participating in Capacity Market

Associate General Counsel Chen Lu told stakeholders that PJM is preparing to ask FERC to extend tariff language allowing it to model the output of Talen Energy’s 1,289-MW Brandon Shores coal plant and 843-MW H.A. Wagner oil-fired units as supply in the capacity market. The commission approved including the units as price-takers in the 2026/27 BRA and the subsequent auction, which would be extended to apply to the 2028/29 auction under PJM’s proposal.

The two generators have been operating on reliability-must-run agreements compensating them for continuing to operate past their desired deactivation dates while transmission upgrades are completed to allow the units to deactivate reliably. (See FERC OKs Changes to PJM Capacity Market to Cushion Consumer Impacts.)

As the capacity market has tightened, several stakeholders argued that if resources operating on RMR agreements are being paid to be available to mitigate transmission violations, their reliability contribution should be reflected in the capacity market.

The temporary nature of the filing and its focus on two generators was intended to allow PJM’s Deactivation Enhancements Senior Task Force more time to draft a pro forma RMR agreement that explicitly allows the RTO to dispatch them in response to a capacity emergency. A draft of such an agreement was presented at the Sept. 18 task force meeting.