New Way to Estimate Demand Response in Load Forecast

A proposal that would change the way future demand response is estimated in the annual PJM load forecast, which is used in planning studies, will be brought to the Markets and Reliability Committee for endorsement next month. The proposal was presented at the MRC meeting on Feb. 26.

PJM proposes to change the demand response planning assumption to represent the average amount of demand response committed in recent past years. Currently, the demand response assumption is based on the amount of demand response that clears the annual Reliability Pricing Model auction. The average amount of committed demand response would be tracked as a percentage of the forecast peak load.

The demand response assumption is a key element of the load forecast. The assumption is factored into transmission planning and RPM’s definition Capacity Emergency Transfer Limit and Capacity Emergency Transfer Objective – defining import requirements and limits into a locational deliverability area.

Tom Falin, manager – Resource Adequacy Planning for PJM, said that, based on current high CETO/CETL margins, the change was unlikely to affect zone prices in the capacity auction. Falin also noted the new methodology would not affect the determination of capacity obligations.

Both the MRC and the Planning Committee were asked to endorse the change.