In a highly unusual move, members Thursday balked at endorsing proposed manual changes governing when Economic demand response qualifies for payment.
The changes to Manual 11 received only 57% in a sector-weighted vote of the Markets and Reliability Committee, with no End Use Customers and less than half of Other Suppliers voting in support.
Most Generation Owners and Transmission Owners voted in support of the changes, which would have specified that demand reductions are eligible for compensation only when they “are not implemented as part of normal operations.”
Ineligible for compensation would be load reductions “that would have occurred without PJM dispatch, or that would have occurred absent PJM energy market compensation.”
No Policy Change
PJM’s Pete Langbein said the manual changes were intended to explain the RTO’s existing interpretation of FERC Order 745. “This is not changing our operative practice,” he said.
Susan Bruce, counsel for the PJM Industrial Customer Coalition, said that additional clarification was needed on PJM’s interpretation of the order, which requires PJM to compensate Economic DR at full Locational Marginal Price when it provides a “net benefit” to the system.
“We have some industrial customers who are really struggling with how to ensure they’re compliant,” she said. “One person’s view of normal operations might be different than another’s.”
Contradicts Order 745
John Webster, of Icetec Energy Services, said the new language would give PJM too much latitude in determining the motives of DR participants and when they should be compensated. He said any revisions should be made through Tariff changes and subject to full stakeholder review.
“From our perspective, it’s contradictory to Order 745,” he said. “There’s no process in place that would allow for that [after-the-fact] analysis.”
Questioned after the meeting, PJM Executive Vice President for Operations Mike Kormos and MRC Secretary Dave Anders said they weren’t sure whether the RTO would use its discretion to add the revisions to the Manual without stakeholder endorsement, or where the issue would go from here.
Manual Changes Approved
Changes to three other manuals won stakeholder endorsements with little discussion:
- Manual 7: PJM Protection Standards — These revisions are intended to align the manual with the PJM Relay Subcommittee’s Protective Relaying Philosophy and Design Guidelines. They include changes to section 7 (Line Protection) and section 8 (Substation Transformer Protection).
- Manual 40: Training and Certification Requirements — These changes, part of the annual update to meet NERC standards, revise data retention requirements and clarify continued training requirements for transmission operators and initial training requirements for new entities.
- Manual 21: Rules and Procedures for Determination of Generating Capability — These changes strengthen the rules for summer verification testing of steam generation units and provide a transition mechanism for those who haven’t been providing appropriate testing results to PJM. (See Transition Period OKd for Seasonal Verification Rules.)
