PJM has created a closed loop interface to capture the pricing of demand response in a transmission sub-zone spanning the Pennsylvania-Ohio border near New Castle, Pa. The interface, which took effect July 1, will be used in real-time when load management is deployed in the area, part of the ATSI zone.

PJM officials said DR may be necessary during outages anticipated with the construction of system upgrades. The upgrades, a result of plant retirements in the area, are expected to be completed in spring 2015.

The interface won’t be used in Financial Transmission Rights auctions or other modeling.

Difficult to Forecast

PJM’s Rebecca Carroll told the Operating Committee that operators will attempt to model the interface in the day-ahead market when possible. “But being able to forecast that is going to be very difficult,” she said, noting that operators generally don’t know whether they will be dispatching DR until a few hours before it is needed.

PJM’s Joe Ciabbatoni said PJM now has a formally documented process for establishing pricing interfaces. “`There should be more of these [interfaces] bubbling up” in the future, he said.

Mike Bryson, executive director of system operations, said that based on the lessons of the unexpected September 2013 heat wave, PJM will be more “proactive” in identifying areas where it may declare subzones for pricing DR. PJM created a closed loop interface in ATSI to capture DR prices that hit the maximum of $1,800/MWh on Sept. 10, when the RTO found itself unprepared for a late summer heat wave that pushed demand over 144,000 MW. (See PJM Surprised by September Heat Wave.)

Bryson said officials also will consider recalling and rescheduling planned outages related to the New Castle upgrades when it anticipates high load days.

In May, the Federal Energy Regulatory Commission rejected PJM’s call for sub-zonal dispatch inside an operating day, saying the RTO had failed to prove the change would not result in “prohibitive costs” to DR providers. Bryson said the order allows sub-zonal dispatch ordered the day before and voluntary compliance with in-day dispatches.

On July 8, the commission said it will take another look at the issue after DR providers Comverge and EnergyConnect contended even next-day sub-zonal dispatch would be a hardship.

Notification Process Sought

At the Market Implementation Committee Wednesday, Bruce Bleiweis of DC Energy and Barry Trayers of Citigroup Energy asked PJM to provide more lead time and transparency when it considers new pricing interfaces.

Bleiweis said PJM should post a public notice when it identifies an issue that may result in an interface. “We feel that’s a superior process to not knowing there was an issue internally discussed,” he said.

Trayers suggested a formal notification process similar to that for creation of special protection schemes.