The Operating Committee voted last week to consider certification requirements for resources providing Tier 2 synchronized reserves and increased penalties for those that fail to perform.
Tier 2 resources, which include combustion turbines operating at low capacity and demand response that can drop load, receive payments for being available to provide synchronized reserves when required — currently about three times per month.
No Guarantee of Performance
The resources are required to respond within 10 minutes but there is no certification process to ensure performance. “Right now I have absolutely no way of knowing if they have the capability” promised, said Kim Warshel, who presented the problem statement for PJM.
Tier 2 generation and demand resources each provided only 70% of the MWhs requested for events lasting 10 minutes or longer between 2009 and 2012. For all events over that period, DR provided only 53% of requested MWhs while generation provided 64% of requests.
Resources that fail to perform lose revenue for the hour of the call and also must provide reserves for three days without compensation.
In contrast with Tier 2 resources, which are paid regardless of whether they are called upon, Tier 1 resources are not paid except when they deliver the service. Tier 1 resources (generators following economic dispatch that are only partially loaded and can increase output within 10 minutes) are not required to perform when called upon.
Bruce Campbell, representing DR provider EnergyConnect, said PJM should consider both tougher penalties and higher incentives to improve performance. Campbell said the three-day no-compensation penalty, initiated when PJM was calling on synchronized reserves every three days, is no longer in “alignment” with PJM’s reduced calls of once every 10 days.
The Operating Committee will consider the need for additional validation processes, disqualification criteria for poor performers and a requalification process for those disqualified.
The committee will recommend potential modifications to Manual 12 and the Tariff. Work is expected to be complete by Oct. 1.
