PRD, Resource Adequacy among MRC Topics 


In a morning filled with debates – some lengthy – PJM and stakeholders discussed how the Capacity Performance construct will accommodate price responsive demand at the Markets & Reliability Committee meeting Oct. 26.

The Demand Response Subcommittee has developed several price responsive demand proposals, which would revise price responsive demand rules in light of the Capacity Performance market structure.

Some key demand response rules were updated with the implementation of Capacity Performance, but PRD rules were not reviewed or updated because no market participant was using PRD at that time. PJM received and approved PRD plans for the first time in January 2017 for the 2020/2021 Delivery Year, however. If the PRD requirements do need to be changed to comply with CP, then changes adopted before the 2018 Base Residual Auction will help reduce impact on members in 2021/2022 Delivery Year and beyond.

Pete Langbein, manager – Demand Response Operations, pointed out that, while there still are aspects to explore, these changes are targeted for resources with the ability to do something on an annual basis, with provisions that are directly related to Capacity Performance. The subcommittee did not undertake any initiatives outside the scope of the issue charge (passed at the June Market Implementation Committee meeting, along with the problem statement).

Rami Dirani discusses the offer verification process with stakeholders

Stakeholders also endorsed by acclamation (with 13 objections, two abstentions) proposed revisions to Manual 11: Energy & Ancillary Services associated with the offer verification process and offer capping logic for the implementation of the Federal Energy Regulatory Commission’s Order 831: Energy Offer Verification. Monitoring Analytics, the market monitor for PJM, offered some specific details of where it differs from proposed Manual 11 revisions.

Chantal Hendrzak, executive director – Market Evolution, said that PJM plans to file with the FERC because there is some ambiguity from the Federal Energy Regulatory Commission. If the FERC instructs PJM to implement the process, it wants to be ready; PJM is unlikely to implement until it hears from the FERC.

Stakeholders endorsed by acclamation several provisions on the balancing ratio that had generated discussion at previous stakeholder meetings.

Updates on the Tariff provisions for calculation of the balancing ratio that will be used in determination of the market seller offer cap for use in the 2018 Base Residual Auction passed with no objections and 10 abstentions. The problem statement and issue charge concerning the balancing ratio for subsequent auctions passed with no objections and one abstention.

Tom Falin, director – Resource Adequacy Planning, gave a progress report from the Resource Adequacy Analysis Subcommittee on winter season resource adequacy and capacity requirements (problem statement and issue charge).

Tom Falin

PJM reviews and updates its current load forecasting and planning models and methodologies as necessary to ensure the ability to accurately evaluate the amount of capacity needed in winter periods to achieve an acceptable level of resource adequacy risk. Currently, PJM is assessing winter generation performance, addressing concerns such as those raised during the polar vortex and ensuring that actual and modeled generator maintenance schedules are consistent. PJM then will evaluate the winter load forecasting model and identify any areas for improvement.

Stakeholders devoted a chunk of time to debating the particulars of the Ohio Valley Electric Corporation (OVEC) integration into PJM. OVEC is not a member of any RTO, and its reliability coordinator function is performed under agreement with MISO. OVEC has been building a business case for integration;

PJM has vetted the integration of OVEC in planning, operations and markets.

Suzanne Daugherty, senior vice president, CFO and treasurer, announced that PJM subsidiary PJM Technologies, Inc. has been chosen to help the Chinese province of Zhejiang develop a wholesale electricity market for the province, including market design and market rules. PJM will also provide training, program planning and implementation advice. The electric system of Zhejiang province (located between Shanghai and Hong Kong in southeast China) is approximately 45 percent the size of PJM’s electric system in terms of installed generation and load served.


Other Endorsements/Approvals

  • The 2017 Installed Reserve Margin study results
  • Manual 11: Energy & Ancillary Services and proposed revisions to the Operating Agreement (OA) and Tariff (capping of intraday offers)
  • Revisions to Manual 14B: Regional Transmission Planning Process (contingency definitions)
  • Revisions to Manual 19: Load Forecasting and Analysis (load drop estimates and periodic review)
  • Revisions of the OA for PJM sharing of restoration planning generator data with transmission owners. PJM may provide confidential generator data for any generator that is or will be modeled in a transmission owner’s energy management system and is or will be identified in a transmission owner’s restoration plan. The information is limited to reliability-related functions.

Other First Readings

Suzanne Daugherty, vice president and CFO, with John Farber of the Delaware Public Service Commission; Farber is retiring.

Informational Updates

Members Committee Meeting 

As part of the consent agenda, members approved three issues that were endorsed at the Markets & Reliability Committee earlier in the day, as well as Operating Agreement definition changes that were approved at the September MRC meeting.