PJM Files Proposal with FERC to Reform Reserve Pricing

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PJM on Friday filed a proposal with the Federal Energy Regulatory Commission to revamp its energy reserve pricing rules to fairly value resources that play a vital role in the reliability of the bulk power grid.

These reserves help balance generation and demand during times of unexpected generation loss, increase in electricity use or variable output of generation resources like wind and solar.

PJM’s current rules do not accurately value reserves for their reliability nor drive consistent response when the resources are called upon.

“PJM’s proposal represents a major step forward in the design of the market,” said Stu Bresler, senior vice president of Operations and Markets. “These resources are not just critical to reliability today and in the future, they will provide the backup flexibility needed so that the grid is prepared for the continued integration of alternative sources of energy.”

PJM filed its proposal under Section 206 of the Federal Power Act, after stakeholders could not reach the needed two-thirds sector consensus on a proposal over the course of the past year. (See Members Engage in Uncommon Preview of FERC filing to Revise Reserve Pricing Rules.)