The Markets and Reliability and Members committees approved the following measures with little discussion at their meetings last week.
Markets and Reliability Committee
Installed Reserve Margin
Reason for changes: The IRM, which determines PJM’s capacity targets in the base auction, is revised annually.
Impact: The committee endorsed PJM staff’s recommendation to increase the IRM to 16.2% for delivery year 2014/15 (up from 15.9% in the 2012 analysis) and margins of 15.7% for delivery years 2015 through 2018. The change is a result of the increasing alignment of the RTO’s peak demand with demand outside of the region.
Previous Coverage: Increased Installed Reserve Margin OKd for 2014
Members Committee
Coordinated Transaction Scheduling
The committee approved Tariff and Operating Agreement changes to create the Coordinated Transaction Scheduling (CTS) product.
Reason for changes: CTS is designed to reduce uneconomic power flows between PJM and NYISO.
Impact: The new product will allow traders to submit “price differential” offers that would clear when the price difference between New York and PJM exceeds a threshold set by the bidder. Pending approval by the NYISO board and FERC, CTS will take effect no sooner than September 2014 — later if the Markets and Reliability Committee is not satisfied with the accuracy of the forecasts generated by PJM’s Intermediate Term Security Constrained Economic Dispatch (IT SCED) application.
Previous Coverage: New NYISO Product OKd
Demand Response Registration Process
Members approved Tariff and Operating Agreement revisions to simplify the process for registering demand response customers.
Reason for changes: Current rules require Curtailment Service Providers to submit customer names to both the electric distribution company (EDC) and load serving entity (LSE). The EDC and LSE have 10 days to approve or deny the registration. If either rejects the application — for example because they were mistakenly associated with the customer — the process has to begin from the start.
The change was motivated in part by FERC Order 745, which reduced the LSE’s role in the registration process.
Impact:
Emergency Registration: The LSE will be removed from the review and notification process; EDCs will continue to do reviews under “Relevant Electric Retail Regulatory Authority” rules.
Economic Registration: The LSE will remain involved but PJM will make administrative changes to simplify the review process. The EDC and LSE review process will be separated to eliminate unnecessary reviews.
Previous Coverage: Simplified DR Registration Process OKd
Synchronized Reserve (SR) Performance
Members approved increased penalties for under-performing Tier 2 synchronized reserve providers. “It better aligns the refund with what the resource earned,” explained Stu Bresler, PJM vice president of market operations.
Reason for changes: The changes are intended to improve performance of SR resources, which currently produce only 75% of promised reserves. The Independent Market Monitor called for changes in the State of the Market report. The current penalties, written when SR calls occurred about every three days, have lost their effectiveness now that calls occur about once every two weeks.
Impact:
- Remove the “contiguous” hours statement from the same-day penalty.
- Retroactive obligation to refund the shortfall for all of the hours the resource was assigned over the immediate past interval.
- Interval duration is the average number of days between events as determined by a review of the last two years, or number of days since resource last failed to provide the amount of Tier 2 Synch Reserve assigned, whichever is shorter.
- Eliminates from the penalty calculation the conversion of shortfall MW to MWh.
PJM has committed to providing generators with near real-time feedback on their performance starting in January.
Previous Coverage: OC Hears New Proposal on Synchronized Reserve Penalty; Delays Vote
