MIC moves price responsive demand proposals forward

On Nov. 8, after a lengthy discussion, stakeholders at the Market Implementation Committee voted to move two proposals on price responsive demand further along in the stakeholder process.

The Demand Response Subcommittee developed several price responsive demand proposals, which would revise price responsive demand rules to better conform with the capacity performance market structure.

The PJM proposal received 83 percent of the vote, and Package C, which is nearly identical to the PJM proposal, received 62 percent of the vote. A third proposal, from Monitoring Analytics, PJM’s independent market monitor, did not achieve the minimum vote required (50 percent) to move forward and therefore will not be present for voting at the Markets & Reliability Committee meeting Dec. 7.

The PJM proposal leverages some of the demand response rules that were updated for capacity performance for PRD (i.e., load reduction from supply or demand side is still a load reduction and required in summer and winter).

Package C is the same as the PJM proposal, but the trigger used to assess penalties is only a performance assessment interval (formerly the performance assessment hour), while the PJM proposal uses the combination of both the performance assessment interval and the locational marginal price greater than the PRD energy curve.

Some key demand response rules were updated with the implementation of Capacity Performance, but PRD rules were not reviewed or updated because no market participant was using PRD at that time. Price responsive demand is the ability of consumers to control their capacity costs by changing their electricity use in response to wholesale energy prices.

Stakeholders also approved the amended charter for the new Distributed Energy Resources Subcommittee. Members have been working on DER issues through special sessions of the MIC. The revised charter, which garnered 92 percent of the vote, included stakeholder language on state/local jurisdictional agency standards and protocols to ensure safety and reliability. This charter will go to the Dec. 7 MRC for further voting.

Brian Chmielewski, senior analyst – Market Simulation, presented a first read of multiple proposals to address the modeling, performance and surplus allocation of financial transmission rights. The discussion and proposed solutions for the three issues have been worked in special sessions of the MIC.

The first proposal considers modeling enhancements for future transmission expansions. Current long-term FTR modeling practices do not account for future transmission system upgrades; future upgrades can have significant impacts on congestion revenue. Much of the discussion centered on the modeling methodology for low-frequency, high-impact upgrades (pages 7-14). Low-frequency, high-impact focuses the scope of the power flow study to only future upgrades with significant impacts on congestion.

The other two proposals concerned auction case performance and FTR surplus allocation. The MIC’s next special session on this topic is Nov. 20.

 Stakeholders discussed two working issues at length – market path/interface pricing point alignment and transmission penalty factors, including interests, design components and proposed solutions. Stakeholders are encouraged to review and add to all parts of the matrices.

Other Committee Business 


  • Financial transmission rights credit requirements for transmission upgrades
  • Revisions to Manuals 11, 18, 27, 28 and 29 (implementation of five-minute settlements)

First Read

  • Stakeholder problem statement and issue charge to address the aggregation of summer and winter demand response megawatts for the capacity performance annual requirement

Additional Updates