Members Endorse PJM Proposal To Modify Capacity Accreditation Process for Renewable Resources

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The Members Committee on Wednesday endorsed a consensus package of reforms designed to more closely integrate Capacity Interconnection Rights into PJM’s capacity accreditation process for resources whose output is intermittent, such as wind and solar generation, and for limited-duration resources, such as storage.

The move is part of PJM’s effort to proactively prepare for a rapidly evolving resource mix, as more and more renewable resources request to connect to the grid. These changes are intended to better align renewable resource output levels considered in the capacity accreditation process with the actual output levels that are tested in the PJM planning process.

It also was the next logical step following PJM’s adoption of Effective Load Carrying Capability (ELCC), a new method of determining the amount of capacity that variable and limited-duration resources can sell into PJM’s capacity market.

PJM’s use of that method was approved by the Federal Energy Regulatory Commission (FERC) on July 30, 2021.

As PJM awaited FERC’s approval of ELCC, it began engaging stakeholders in special sessions of the Planning Committee, guided by a problem statement and issue charge approved in April 2021, to examine the implications of the ELCC method on Capacity Interconnection Rights (CIRs) for variable, intermittent and limited-duration resources.

As its name implies, CIRs reflect the rights of a generation capacity resource to input generation into the transmission system at the point of interconnection where the generating facilities connect to the grid.

The proposal endorsed Wednesday was among five to emerge from the stakeholder process, which consisted of more than 25 meetings.

At the Jan. 10 meeting of the Planning Committee, the consensus package received 82% support, making it the only proposal to earn more than 35% of the committee’s vote. That made it the only proposal with enough support to move it on to the Markets & Reliability Committee (MRC).

At the MRC meeting Wednesday, the consensus package received the equivalent of 91% support (4.529 out of 5) in a sector-weighted vote. At the ensuing Members Committee meeting – where the proposal was debated alongside an alternative motion by LS Power – it received 89% (4.438 out of 5) support.

The proposal now goes to the PJM Board of Managers, to be followed by a filing with FERC. If approved by FERC, PJM expects the changes to be implemented for the 2025/2026 Base Residual Auction (BRA), which is scheduled for June.

Among the highlights of the proposal:

  • The package would cap ELCC resource output at current CIR deliverability levels in the “upstream” capacity accreditation process performed by PJM staff.
  • Generators, including those with an Interconnection Service Agreement, would need to re-enter the interconnection queue if they desire higher CIR levels.
  • Wind and solar resources would have the ability to request, retain and be studied at much higher CIRs than they can today.
  • For a limited transition period while their interconnection requests for higher CIRs are being processed, an annual transmission capability study will be conducted prior to each BRA to allocate eligible resources any excess “headroom” on the transmission system to be used for purposes of capacity accreditation.

At the MRC meeting, Ken Seiler, Vice President – Planning, thanked stakeholders for their work over nearly two years. He noted that PJM had taken feedback from a Jan. 13 page turn of the proposed revisions to the Tariff and Reliability Assurance Agreement.

Following the MRC vote, committee Chair Stu Bresler, Sr. Vice President – Market Services, also thanked stakeholders for their perseverance in reaching consensus. “This was a very difficult issue,” he said. “Thank you for your engagement over the past many months.”