By Rory D. Sweeney

VALLEY FORGE, Pa. — PJM would have to implement programs adhering to specific rules and strict oversight in order to include summer demand reductions in its load forecasts, stakeholders learned last week.

Staff unveiled a proposal for implementing the demand reductions initiative, which has been driven by ratepayer representatives, at an Aug. 15 meeting of the Summer Only Demand Response Senior Task Force. Participation would be restricted to demand response programs approved by a state or regional regulator, and, to avoid double-counting, customers included in the programs would be barred from also participating as DR or price-responsive demand in PJM’s markets during the same delivery year. Instead of receiving a direct payment, their value would be included as avoided capacity costs for the entire zone through a shift in the variable resource requirement curve used in the Base Residual Auction and Incremental Auctions for the delivery year.

Programs would need to indicate several factors by Aug. 31 prior to the delivery year’s BRA, including:

• A threshold on PJM’s temperature-humidity index to trigger interruption;
• A duration in hours;
• The number of megawatts that can be curtailed per hour;
• The months an interruption can occur; and
• All historical add-backs for the programs.

PJM’s Tom Falin said the add-backs are necessary to “start with a clean load history.”

“Our concern is that some of this peak shaving may already be reflected in the load history,” he said.

Measurement and verification of the curtailment will also be important to confirm that what gets included in the load forecast is what actually occurs to ensure “as accurate a load forecast as possible.”

Staff’s initial forecast reduction will be based on a modified load history that assumes perfect curtailment performance since 1998. After three years of actual monitoring, the forecast will transition to using a three-year rolling average. But performance during the first two summers will be “key,” Falin said, because “we’re going to take the performance result for that summer and assume that would have happened for the previous 18 years.”

EnerNOC’s Brian Kauffman presented an alternative proposal that would allow summer DR to participate in both load forecast adjustment (LFA) and as Capacity Performance resources. To avoid double-counting, Kauffman offered several proposals on measurement and verification, add-backs and payment rules to differentiate between megawatts committed under the LFA versus CP versus energy markets.

PJM staff were immediately against the idea, but Kauffman implored them to “first explore this and determine if it’s impractical.”

The Independent Market Monitor’s Skyler Marzewski offered a revised proposal that would prohibit participation in multiple markets and exclude add-backs. PJM’s Andrew Gledhill said “we’re going to have to get the accounting right” because there might be potential for gaming.

Eric Matheson with the Pennsylvania Public Utility Commission withdrew his proposal but provided a presentation on timing conflicts between state peak-shaving programs, such as Pennsylvania’s Act 129, and PJM’s requirements.

PJM’s Rebecca Carroll said the group’s next meeting on Aug. 29 will cover dual registrations in capacity and energy programs, and whether load-reduction offers can be increased and decreased in IAs or just increased. Staff are hoping for a vote in time to review it at the group’s Sept. 19 meeting and report to members at the September meeting of the Markets and Reliability Committee.

Staff also confirmed that any changes the group develops wouldn’t be able to be implemented until the 2020 BRA.