PJM Proposes Creation of Fifth CONE Area

VALLEY FORGE, Pa. — PJM last week proposed creation of a new cost of new entry (CONE) area for the Commonwealth Edison (ComEd) zone during discussions about how to account for local factors in calculating net CONE.

PJM’s Gary Helm said the discussion arose out of concerns raised in the RTO’s quadrennial review filing at FERC about the impact of the Illinois Climate and Equitable Jobs Act on net CONE. An issue charge and problem statement were adopted following the approval of that filing to evaluate how asset life and net CONE are determined. (See “Amortization Period,” FERC Approves PJM Quadrennial Review.)

“What we are looking at proposing here in this package is addressing that specific item through making ComEd, that [locational deliverability area], its own CONE area. So we currently have four CONE areas; this would be a fifth,” Helm said. He added that PJM is also considering what other areas could be impacted by approved state and local legislation or other localized factors.

Stakeholders Continue Discussion on Co-located Load Packages

Several packages seeking to create new rules for generators with co-located load were discussed by the Market Implementation Committee during its May 10 meeting. PJM’s Tim Horger worked with package sponsors to create a comparison of the five current proposals. (See “Discussion on Co-located Load Packages,” PJM MIC Briefs: April. 12, 2023.)

Much of the ongoing discussion of the proposals has centered on configurations in which the co-located load isn’t directly connected with the grid and whether those loads should be considered FERC jurisdictional or falling under state regulation. The discussion has also focused on whether generators should be permitted to retain their full capacity interconnection rights (CIRs) for the balance of their output consumed by the load and what service fees, if any, should be allocated to the load or generator.

The Independent Market Monitor proposal would follow the status quo of requiring generators to reduce their CIRs corresponding to the co-located load consumption, while the other four would not. The PJM, Constellation/Brookfield and Exelon packages specify that CIRs can be retained so long as the load is capable and willing to curtail within 10 minutes and that output be able to shift over to the grid.

The Advanced Energy Management Alliance (AEMA) package considers all co-located load to be FERC jurisdictional and as taking services from the grid. It would permit generators to retain their full CIRs.

The Constellation/Brookfield proposal is the only one to not charge any grid services to the configuration. The PJM package would assess regulation, reserve and black start fees to the entire load by assigning them to the generator. Exelon’s would consider the generator to be a load-serving entity for the co-located load and levy all LSE credits and charges. The Monitor proposal would include charges for regulation, reactive power, frequency control, reserves and black start via the generator, and the AEMA proposal includes all firm point-to-point transmission charges.

All proposals except the Monitor’s would permit the inclusion of curtailment costs in their market-based energy market offers, but not their cost-based offers. The monitor would not permit any inclusion.

The Constellation/Brookfield and Exelon proposals are silent on configurations in which the load is receiving service from the grid, while the AEMA proposal has the same rules for all configurations.

Under configurations with grid service, both the PJM and Monitor proposals would require CIRs to be reduced and consider the load to be FERC-jurisdictional. The Monitor also applies all LSE charges and credits, while PJM does not.

Exelon presented minor changes to its proposal since its last presentation, clarifying that the co-located load could participate as either demand response or price-responsive demand, incorporating PJM feedback to lengthen the initial public notice to 10 days and adding a provision to grandfather PJM’s market rules for co-located load configurations that were approved by the relevant electric retail regulatory authority prior to 2024.

MIC Chair Foluso Afelumo said the committee will likely be continuing first reads at the June meeting to accommodate a data center developer that plans to present an additional package at that meeting. Voting on endorsement could begin at the July meeting.

PJM will also give additional thought to how voting will be structured, as four of the proposals have separate provisions for co-located load with and without service from the grid, while the AEMA proposal addresses both.

Other MIC Business

• The committee endorsed by acclamation a PJM problem statement, issue charge and proposal to clarify that smoothened supply curves will only be generated after Base Residual Auctions and not Incremental Auctions. Tariff revisions will move on for consideration at the Markets and Reliability Committee and the Members Committee. The proposal was brought under the quick fix process, allowing solutions to be voted on simultaneous with the problem statement and issue charge. (See “First Read on Smooth Supply Curve Quick Fix,” PJM MIC Briefs: April. 12, 2023.)
• Stakeholders endorsed revisions to Manual 11 to allow PJM to reduce the Transmission Constraint Penalty Factor under a set of circumstances when it is believed the penalty cannot incentivize actions that would reduce constraints. The proposal codifies a package previously approved by stakeholders and a FERC order in March. (See FERC Approves PJM Proposal to Reduce Congestion Penalty During Grid Upgrades.)
• The MIC endorsed revisions to Manuals 11, 27 and 28 to add market rules for hybrid resources. The proposal will go before the MRC for endorsement on May 31, followed by a FERC filing with a requested effective date of June 1.
• Stakeholders endorsed revisions to Manual 15, which PJM’s Glen Boyle described as minor updates to clarify current processes related to heat input guidelines and the IMM Opportunity Cost Calculator.
• The Consumer Advocates for PJM States gave a first read on a proposal to amend the issue charge for the Reactive Power Compensation Task force, reducing the items considered out-of-scope to permit discussion of “any existing FERC approved or pending reactive service rates.”