The Market Implementation Committee will consider changes to PJM’s real-time pricing mechanism, which RTO officials say is depressing energy and reserve prices.
The Markets and Reliability Committee approved PJM’s request for a problem statement and issue charge by acclamation Thursday.
The initiative would allow system operators to increase reserve requirements under certain circumstances, such as when operators are carrying additional resources to cover units at risk of being shut down because of environmental limitations or mechanical problems. Requirements also could be boosted when operators have data quality concerns or are uncertain about load or interchange.
The revised methodology could increase reserve and real-time energy prices while reducing uplift.
Officials said the need for changes was illustrated during the September heat wave. On Sept. 10, operators under-forecast load by more than 4,000 MW and overestimated the availability of Tier 1 Synchronized Reserves.
On the 11th, uncertainties over the load forecasts and availability of reserves led operators to deploy more demand response than was ultimately needed. Load rose sharply in the morning of the 11th, exceeding forecasts through early afternoon but peaking earlier and much lower than expected.
Adam Keech, director of wholesale market operations, said PJM staff hopes to implement at least some changes by May 1. “We need to draw a line in the sand and say we need to make changes before next summer,” he said.
