Co-located Load Issue Charge Endorsed

PJM members endorsed an issue charge at last week’s Market Implementation Committee meeting to study the treatment of generation with co-located load after making modifications to its key work activities stemming from concerns over the scope of the issue.

The issue charge, sponsored by Exelon and Brookfield Renewable, received 207 votes in support (92%) with 29 abstentions. Jason Barker of Exelon reviewed the problem statement and issue charge first presented at the December MIC meeting. (See “Capacity Offer Opportunities,” PJM MIC Briefs: Dec. 1, 2021.)

Exelon has seen growing consumer interest in co-locating new, large interruptible commercial loads behind the meter of existing generation resources. Customers are asking for low-cost physical energy supply from generator resources with specific characteristics, such as carbon-free physical energy supply.

“We see a gap in the rules that could, if filled, both facilitate commercial transactions and customer choice,” Barker said. “The fast-curtailment capability of these resources is the innovation that is driving the need for rule reform.”

The issue charge includes investigating market rule changes to support new interconnection configurations for co-located load. Key work activities feature education regarding current capacity offer requirements for existing generation resources and interconnection requirements for “new, large, fast-response interruptible commercial load.”

Debate over the issue charge at the MIC meeting led to the addition of two more key work activities. They include examining federal and state “jurisdictional bounds” that could impact co-located load configurations and the potential impact of co-located load configurations on generator capacity capability.

The key work activities were also broken into two phases, with the examination of the potential provision of ancillary services facilitated by highly interruptible, co-located load coming in the second phase once work in the first phase is completed.

Work on the issue is expected to take six months at the MIC.

Independent Market Monitor Joe Bowring questioned the issue charge, saying he was “highly skeptical.” Bowring said the issue would represent a “really radical change” to the capacity market and should be considered as part of the work being done at the Resource Adequacy Senior Task Force.

PJM Monitor Joe Bowring | © RTO Insider LLC

He also said the thinking that this is a narrow issue that will make commercial opportunities available to a subset of customers is “not really relevant.” He said the potential also exists that all effective load-carrying capability (ELCC) calculations will have to be redone because the current calculations already account for the generation resources.

“One person’s benefit is another person’s cost,” Bowring said. “It’s changing the definition of capacity, converting a baseload resource to an interruptible resource. Should an interruptible resource have the same ELCC, the same capacity value to the market, as a baseload resource?”

Bowring also said by dedicating low-carbon nuclear output to a new load that would not otherwise exist, additional emitting resources would need to operate to meet PJM load, causing carbon emissions in the RTO to increase.

Barker said Exelon and Brookfield disagree that the issue charge presents a “radical change” in the capacity market and that it would not change the definition of capacity. Absent any changes, PJM could see the “loss of economic development” or a loss of emissions-free resources from the grid, he said.

“We just have to evolve with the changing needs of the customer base,” Barker said.

Aaron Breidenbaugh, director of regulatory affairs for Centrica Business Solutions, said that when he first brought the issue to his company, commenters said it “seems like a solution in search of a problem.” Breidenbaugh said what was being proposed in the issue charge could be done through the “existing demand response construct” in PJM’s capacity market or through the purchase of renewable energy credits.

“I’m wondering why we need to create this exception,” Breidenbaugh said.

Barker said customers have expressed a desire to move away from DR and have also asked for a physical supply of a clean energy resource, rather than just purchasing RECs. He added that customers with no grid interconnection are not permitted to participate in PJM’s DR programs.

“I strongly disagree that this is an exception,” Barker said. “This is a reform and an evolution because we haven’t seen these types of commercial loads seek this type of service before.”

De-energized Bus Replacement Revisions Endorsed

Stakeholders unanimously endorsed manual revisions related to five-minute dispatch and pricing.

Vijay Shah, lead engineer in PJM’s real-time market operations department, reviewed revisions to Manual 11: Energy and Ancillary Services Market Operations designed to incorporate enhancements to the dead bus replacement logic for assigning prices to de-energized pricing nodes (pnodes). The revisions were first discussed at the December MIC meeting. (See “De-energized Bus Replacement,” PJM MIC Briefs: Dec. 1, 2021.)

The revisions were intended to provide increased transparency in the logic and how it performs replacements for de-energized buses, Shah said. PJM is required to produce LMPs for all pnodes in the RTO’s network model for all intervals, including de-energized pnodes.

Shah said PJM wants to use new logic based on Dijkstra’s algorithm, an industry standard, to find a suitable replacement for de-energized pnodes. He said the algorithm uses the “least impedance path” to find a suitable source, and it’s to be implemented in both day-ahead and real-time market clearing engines.

The manual changes include updated language to reflect the new logic.

Shah highlighted a change to section 9.1.1: Intraday Offers Optionality that was not included in the first read at the December MIC, which clarifies language to state that a generation resource’s fuel-cost policy only needs to be updated when opting in to intraday updates for the cost-based schedule.

PJM will seek final endorsement at the Jan. 26 Markets and Reliability Committee meeting, and the new dead bus replacement logic would take effect March 1.

Minimum Run Time Guidance Endorsed

An issue charge addressing pseudo-modeled combined cycle minimum run time guidance won unanimous stakeholder support.

Tom Hauske, principal engineer in PJM’s performance compliance department, reviewed the problem statement and issue charge first presented at the December MIC meeting. (See “Minimum Run Time Guidance,” PJM MIC Briefs: Dec. 1, 2021.)

Hauske said PJM and the Monitor brought the issue forward as a result of the “disaggregation of many multiple block combined cycles” into individual pseudo-model market units, or virtual modeled combined cycle units. Market sellers can currently model a combined cycle unit as multiple pseudo units composed of a single combustion turbine and a portion of a steam turbine.

If the market units of a pseudo-modeled unit are dispatched at different times on parameter-limited schedules, Hauske said, the potential exists for one or more of the pseudo-modeled units to operate “for some period beyond the minimum run time parameter limit for an identical non-pseudo-modeled combined cycle unit.”

Key work activity in the issue charge included stakeholders developing guidance for market sellers regarding offering operating parameters for pseudo-modeled combined cycle units through education on the issue. Expected deliverables include revisions to Manual 11 or other relevant PJM governing documents.

Hauske said PJM wanted to use the CBIR (consensus-based issue resolution) Lite process in Manual 34 to develop any manual changes and have final endorsements by the March 23 MRC meeting because the RTO’s unit-specific parameter adjustment process starts on Feb. 28. PJM must provide a determination on the requests by April 15.

“We do want to have some sort of guidance in place during this period before it ends in case there’s any impact on any unit out there,” Hauske said. “We’re looking at a very limited-scope item.”

The committee began interest identification and the development of design components and solution options on the matrix after the vote.