MRC Approves Capacity Auction Parameters; Reviews Load Forecast Model Changes

 The reserve margin used in the Reliability Pricing Model capacity auction was one of the topics discussed at the October 22 meeting of the Markets and Reliability Committee.  The committee endorsed the 2015 recommended planning parameters, which incorporates the reserve margin.

Among other topics, the MRC also reviewed an update of the PJM load forecast model and manual revisions which reflect energy efficiency in the peak load forecast. The MRC is scheduled to vote on them at the November meeting.

Tom Falin, manager – Resource Adequacy Planning, presented the installed reserve margin study, which will re-set the IRM and forecast pool requirement for delivery years 2016-2017, 2017-2018 and 2018-2019 and will establish an initial IRM for 2019-2020, the first base residual auction with Capacity Performance.

Falin said the Resource Adequacy Analysis Subcommittee will also reevaluate the fundamental assumptions for the 2016 IRM study.

Jeff Bastian, manager – Capacity Market Operations, reviewed proposed manual revisions to accommodate EE resources in the capacity market when EE is incorporated into the peak load forecast. Bastian used input from a special MRC session to revise aspects of the original proposal; there will be another special MRC meeting to further discuss the complexities of the issue.

Eric Hsia, manager – Performance Compliance, presented a resolution for manual revisions to alleviate challenges caused by dynamic regulation resources, known as RegD.

The proposal provides a temporary solution for periods when PJM needs to apply an administrative cap that limits certain RegD  megawatt commitments. The solution reduces or eliminates RegD over-procurement.

To develop more permanent solutions to the issues Hsia presented, PJM established the Regulation Market Issues Senior Task Force. The MRC approved both the resolution and the task force charter.

The MRC also endorsed the following:

  • Revisions to Manual 14B: Regional Transmission Planning Process on winter reliability criteria
  • Tariff revisions for the 2016-2017 third incremental auction concerning PJM’s sale or purchase of capacity (necessitated by the Capacity Performance transition auctions)
  • Draft charter for the Governing Documents Enhancement & Clarification Subcommittee

The MRC did not endorse draft manual language and tariff revisions associated with Tier 1 Compensation, nor did it endorse an alternate proposal from ODEC. Current rules will stay in place.

PJM also presented Virtual Transactions in the PJM Energy Markets, the whitepaper recently published by PJM staff as an educational and issue identification tool. PJM expects the stakeholder process to drive ideas and recommendations.