By Suzanne Herel
FERC last week denied five requests for changes in PJM’s treatment of demand response, rebuffing filings by the Independent Market Monitor, DR providers, industrial customers and Public Service Enterprise Group.
The commission rejected an allegation by the Monitor that PJM doesn’t treat DR in a way comparable with generation capacity resources. The Monitor said it should be subject to a must-offer requirement in the day-ahead energy market as well as the energy offer cap (EL14-20). (See Monitor Asks FERC for Must-Offer on Demand Response.)
“The commission has … explained that comparability does not require that generation resources and demand response resources be subject to the same operational parameters in every circumstance,” FERC said.
Viridity Energy had filed a complaint that PJM’s compensation provisions are discriminatory to capacity-only resources because an end-use customer that registers with one curtailment service provider (CSP) for capacity and a second CSP for energy does not receive a guaranteed energy payment when called to reduce load in response to an emergency.
FERC cited reliability issues and the avoidance of double payments in denying the complaint (EL12-54).
The commission said the differences in compensation were justified by the need to avoid errors in measurement and verification by customers represented by two different CSPs from inadvertently or intentionally submitting duplicate offers for the same megawatts covering the same time period. “Duplicate offers, as PJM notes, could create reliability problems by erroneously indicating to PJM’s operators that they will be getting twice the demand reduction that is actually available during an emergency condition. As PJM further notes, market participants, in this circumstance, could be required to pay twice for the same reduction.”
EnergyConnect and Comverge were denied rehearing of a May 2014 order accepting rules increasing the operational flexibility of DR. FERC also found that PJM’s compliance filing satisfied the requirements of the May order (ER14-822).
The commission also denied a rehearing request from the PJM Industrial Customer Coalition regarding a January 2014 order that capped PJM’s procurement of certain limited-availability DR products. The order noted that PJM’s limited and extended summer DR products will be eliminated as a result of the new Capacity Performance rules (ER14-504).
Finally, FERC denied a rehearing request from PSEG that challenged a requirement that DR providers submit certain information before the Base Residual Auction proving their ability to perform when needed (ER13-2108). In part, the commission found that the general statement of obligation applies to all capacity resources and is not specific to DR.
Chairman Norman Bay said that the Supreme Court upholding FERC’s jurisdiction over DR has allowed the commission to begin clearing a backlog of DR cases. “There were a number of DR matters that could not be resolved until the Supreme Court issued its decision,” he said.