An overworked transformer and the mobilization of demand response were the focus last week as members and PJM staff continued to discuss the mid-July heat wave.

PJM officials gave lengthy briefings to the Operating and Market Implementation committees, explaining their decisions to relieve an overload on the AEP transformer in the west and their mobilization of demand response in the PECO and PPL zones in the east.

The RTO said it will create a “Frequently Asked Questions” report to address the many issues raised by its response to the six-day heat wave, which resulted in the fourth-highest peak demand in PJM history on July 18. “We intend to kind of shake the tree” for lessons learned, said Mike Bryson, executive director of system operations.

Among the issues to be reviewed will be interchange volatility, demand response flexibility (lead time, minimum run time, offer price), the quality of generator data and the creation of localized interfaces.

Several members asked why demand response set real time prices in FirstEnergy’s ATSI control zone July 18 — peaking at about $1,800 — but not in the PECO and PPL zones, where DR also was mobilized. RTO prices hit $465 at 2 p.m. but plummeted to $52 at 3 p.m. before returning to more than $200 between 4 and 6 p.m. (See Imports, Not DR, Caused Heat Wave Price Crash.)

Jason Barker, wholesale market development director for Exelon, said the heat wave highlighted the need for a reserve product that allows the conservative operations employed by PJM dispatchers to be reflected in prices. “It blows our mind that we’re seeing $52 prices when you have gigawatts [of demand response and peakers dispatched] with prices much higher,” he said.

AEP/ATSI

AEP’s formerly anonymous South Canton #3 transformer became an unexpected constraint on July 18 although the problem hadn’t been foreseen in PJM’s day-ahead projections, PJM officials said.

The high loads became acute at the transformer because of an unplanned outage of more than 1,500 MW of generation east of the transformer. “If that [generation] had been on line we wouldn’t have had this problem,” said PJM’s Chris Pilong.

Load on the transformer increased steadily from 9 a.m., briefly exceeding its “Normal Limit” of about 1,900 MVA at about 1 p.m.

PJM officials called on demand response in the neighboring ATSI control zone to maintain flows through the transformer.  “It was the biggest bang for your buck,” Pilong said.

Operators also created a temporary interface in the ATSI zone (see map) so that the region had a single LMP reflecting the DR prices.

“It was creating a constraint that accurately reflected the actions the operators took,” explained Adam Keech, director of wholesale market operations.

“The idea is to represent the physical reality that operators were dealing with,” said Stu Bresler, PJM vice president of market operations.

Keech said he wasn’t certain PJM had manual language covering “on the fly” creation of a localized interface. “I’m not sure if we’ve done this before,” he said.

DR Call

While it was the need to unload a constraint that led to the call for DR in the west, it was capacity limits across the system that led to the call for 1,000 MW of DR in PECO & PPL, officials said.

PJM must call for all DR in a zone because its rules don’t allow a call for fractional contributions from zones. “Because it was 1,000 MW we needed we chose PECO and PPL,” Bryson said. “If we needed more we would have called additional zones.”

The Pepco zone was rejected for a DR call because of a water main break in the Washington D.C. suburb of Prince George’s County that threatened to leave thousands without water for days.

If they had to call on demand response again on Friday, Pilong said “we most likely would have looked at different zones from PPL and PECO” because of the annual limits on DR calls for individual providers.

Officials said they expected DR to set energy prices across the entire RTO at their maximum of $1,800. The assumption proved wrong because of an unexpected influx of imports.

RTO LMPs hit $465 at 2 p.m. then plunged to $52 at 3 p.m. before returning to more than $200 between 4 and 6 p.m. The fall in prices came as net interchange jumped from less than 4,700 MW to nearly 7,700 MW.

When the imports arrived, PJM operators unloaded generation that was more expensive.

Keech said 2:40 p.m. to 4:40 p.m. was the minimum run time for demand response. From 4:40 p.m. to 5 p.m., he said, operators discussed whether to release DR.  “We decided we didn’t need DR. We didn’t want $1,800 prices.”