Planning Committee Sends IRM Study Results to MRC

At its October 8 meeting, the PJM Planning Committee endorsed results of the 2015 installed reserve margin study. The recommendation now moves to the Markets and Reliability Committee for its October 22 meeting.

The IRM is a component that factors into setting the amount of reserves to be procured at the next capacity auction. Calculations this year for the amount of reserves required to maintain reliability resulted in a proposed increase from the current IRM.

There was extended discussion prior to the vote. Some stakeholders expressed concern about whether Capacity Performance will affect IRM; others thought that changes in the IRM are not necessary at this time.

There will be further discussion prior to the MRC; PJM pledged to provide the stakeholders more information in the hopes of alleviating those concerns.

Although the IRM will increase by 0.8 percent, the more meaningful factor is the Forecast Pool Requirement, derived from the IRM. Under RPM, the FPR is the actual factor that determines the demand curve in the Base Residual Auction. The FPR will increase modestly but represents about the median value for FPRs for the past 28 auctions. It is expected that the effect of the increase in FPR, offset by a decreased load forecast, will mean a net savings to consumers and entities who serve them.

The committee also reviewed of manual language revisions on proposed load forecast modeling change.

The revision adds variables that reflect trends in energy efficiency and newer weather history in weather variables.