Tuesday, March 26, 2019

FERC OKs PJM Plan to Prevent Shortchanging of DR Value

By Rory D. Sweeney

FERC approved PJM’s proposal to revise its Reliability Assurance Agreement (RAA) to exclude atypically low usage winter peak days from load-serving entities’ winter peak load (WPL) calculations (ER19-142). The revision, which was requested by East Kentucky Power Cooperative, eliminates the potential that demand response resources might be shortchanged in the load curtailment they can provide. (See “Now is the Winter of Our Discontent (with DR Rules),” PJM Market Implementation Committee Briefs: Sept. 13, 2017.)

East Kentucky Power Cooperative headquarters | EKPC

PJM calculates an end-use customer’s DR capability by taking the lesser of its total peak load contribution, which measures summer capability, or its WPL.

The WPL, which is usually lower, is calculated by averaging the customer’s peak hourly loads during traditional daytime hours on the five days with the highest daily unrestricted peak loads from December through February, known as the five coincident peaks (5CPs).

However, one or more of the 5CPs can have little or no load because of load-management actions, offline factories or meter malfunctions. Such reductions reduce the WPL, which will likely reduce the calculation for the resource’s potential load reduction.

To avoid this, PJM will allow customers to exclude up to two CP days when the peak hourly loads for each of those days are individually below 35% of the average peak hourly load for all the location’s winter 5CP day. The 35% threshold represents 1% of all submitted peak load days.

The commission’s Dec. 17 order said the new rules “should more accurately reflect end-use customers’ actual loads during peak winter periods.” It rejected the Independent Market Monitor’s argument that the proposal would arbitrarily increase the calculated WPL.

“Similarly, we are unpersuaded by the Market Monitor’s argument that failure to also eliminate high-load days renders the winter peak load calculation arbitrary. There is no evidence in the record that identifies any particular circumstances or events that may cause abnormally high-load days that are not representative of actual peak loads and, when used to calculate winter peak load, lead to an inaccurate representation of a demand resource’s capability to reduce its winter load.”