VALLEY FORGE, Pa. — The Markets and Reliability Committee endorsed a proposal to rework how demand response (DR) resources are modeled in PJM’s effective load carrying capability (ELCC) framework, most significantly by replacing the availability window with round-the-clock profiling of DR load.

The proposal received 74% sector-weighted support and was approved by the Members Committee Feb. 20 as part of its consent agenda. (See “Expanded Demand Response Modeling Endorsed,” PJM MIC Briefs: Feb. 5, 2025.)

The revisions to the Reliability Assurance Agreement and Manual 20A are envisioned to more accurately align the capability of DR resources with the times reliability risks are most pronounced, particularly in the winter when a greater share of risks lie outside the 6-9 a.m. seasonal availability window. PJM’s Pat Bruno said about 17% of loss of load hours fall outside the availability window, having a significant impact on DR accreditation.

The package also would redefine the winter peak load (WPL) for DR participants to be measured at a set hour PJM believes best reflects the resource class’s overall ability to match system needs. Because individual resources’ WPL are measured at their highest point, regardless of time, adding them up to form a class-wide peak load would overstate the amount of curtailment capability there is, because those peaks would not necessarily coincide.

The third component would model the expected curtailment capability each DR resource is expected to provide by hour to reflect lower potential overnight in the ELCC and risk modeling analyses.

Bruno said the proposal would improve reliability, increase DR parity with generation by recognizing capability in all hours, capture more load and reduction capability, and improve the incentives for curtailment service providers to sign up customers that have more capability to curtail throughout the day.

The proposal targets implementation in the 2027/28 Base Residual Auction (BRA), which DR providers and consumer advocates argued waits too long to unlock the resource’s potential to mitigate tightening supply and demand in the capacity market. An alternative would have made the changes effective for the 2026/27 BRA. But some stakeholders argued that would complicate planning parameters and rules already subject to many changes with just months before the auction is set to be run in July. Bruno said PJM preferred the alternative to realize the reliability and risk modeling benefits sooner.

Calpine’s David “Scarp” Scarpignato said any change to the timeline on which planning parameters would be published would disrupt the ability for load serving entities to engage in bilateral transactions ahead of the auction, noting that the “R” in BRA stands for residual in recognition of its role in procuring capacity not secured through those trades.

“Even when it’s in our financial interest, we don’t always propose moving these parameters around,” he said. “You’re screwing up the market when you’re moving these timelines around like people are talking about.”

Had the alternative been endorsed, Bruno said PJM would have sought expedited treatment at FERC to minimize any impact on the planning parameters. Were that not granted, he said PJM could either publish two sets of parameters with and without the changes or delay publishing specific parameters that could be impacted by the filing. Those parameters are the installed reserve margin, forecast pool requirement, accredited unforced capacity factor, RTO-wide reliability requirement, and the capacity emergency transfer objective.

CPower’s Aaron Breidenbaugh said the proposal goes beyond paper changes to the amount of capacity DR could provide. Eliminating the availability window would require participating consumers to be ready to curtail at any time, he said, including hours they are not accustomed to thinking about.

“There’s going to be a lot of effort to try to accommodate that, but that’s exactly where the reliability benefit comes from,” he said.

Susan Bruce, representing the PJM Industrial Customer Coalition, said the 74% support for the package undercounted support for the actual changes proposed. Because the MRC votes on the main motion first and alternatives are considered only if that fails, she said some consumers voted in opposition in an effort to have an opportunity to vote on the faster implementation included in the alternate.

Market Monitor Joe Bowring opposed the PJM proposal. He noted that PJM does not use DR’s actual performance during the same critical hours that are used for all other capacity resources.

“The experience with DR during Winter Storm Elliott demonstrated that customer loads were already very low when DR was called and that DR provided only a very limited response,” he said in an email to RTO Insider. “PJM is crediting DR with an ELCC higher than gas fired combined cycles because PJM is assuming a response that is not supported by the data. PJM treats DR as an emergency only resource unlike all other capacity resources.

“PJM does not know the nodal location of DR. PJM simply ignores increases in DR load above WPL for DR when it is called. PJM fails to apply the same DR ELCC method for the summer as it proposes to apply in the winter. There is no reason to make an expedited and inadequately supported change to the DR ELCC while ignoring other ELCC issues. All ELCC issues are interdependent and should be part of an overall review,”

Bowring said the Monitor estimated that DR resources would be paid about an additional $235 million under the new ELCC if the next auction clears at the maximum price, an increase of about 36%. He agreed with PJM’s proposed use of a single coincident peak hour, elimination of the aggregate scaling factor and expansion of the performance obligation to all hours of the year.