MIC Looks at Balancing Ratio, Kentucky EE


PJM presented a proposal to address the average balancing ratio used in the base residual auction at the Market Implementation Committee Sept. 15.

The balancing ratio is calculated during a performance assessment hour to determine each generation capacity resource’s obligation to deliver energy.

The default offer cap is determined by averaging all balancing ratios for all performance assessment hours for the three calendar years preceding the base residual auction. Since there haven’t been performance assessments hours yet during this period, it is not possible to determine an average. There are no Tariff provisions that cover that situation.

The proposal calls for using the same balancing ratio in the 2021/2022 auction as was used in the 2020/2021 BRA – 78.5 percent.  To implement the change, PJM needs to file with the Federal Energy Regulatory Commission by early November to align with the current timeline in the Tariff for unit-specific offer cap elections.

PJM also provided an informational update on energy efficiency in Kentucky.

PJM reviewed its commitments to the Kentucky commission relating to the integration of the three PJM utility companies located in the state (AEP, DUKE and EKPC).  In light of those commitments and recent guidance from the Kentucky Commission, PJM intends to make a Section 205 filing at FERC for a prospective waiver of its tariff, relating to the participation of unauthorized energy efficiency in Kentucky.  PJM will asks the FERC for a ruling and effective date 60 days after filing.

The waiver will be limited in scope – applying only to Kentucky and only until the FERC rules on the Advanced Energy Economy petition, or otherwise provides jurisdictional guidance.  The decision does not disrupt past market activities – EE resources that have cleared in the past auctions will be able to satisfy existing obligations.

Other Committee Business

Stakeholders approved (with 72 percent) conforming revisions to Manual 11: Energy & Ancillary Services, associated with the implementation of intraday offers.  Generators can opt-out or opt-in to intraday offers, as long as the specifications for triggering cost offer updates are clearly defined in the fuel cost policy.  PJM is offering intraday offer education on Sept. 15.


  • Revisions to Manual 6: Financial Transmission Rights, regarding FTR forfeiture (passed with 82 percent)
  • Revisions to Manual 28: Operating Agreement Accounting regarding the implementation of intraday offers (passed by acclamation)

The proposal package for annual revenue requirements for new black start units – Phase 2 (minimum tank suction levels) failed, with 52 percent against. There was not stakeholder support for re-examining the issue.

First Readings

 Working Issues and updates