PJM Files “Stop-Gap” Proposal for Demand Response Participation in Capacity Market

In the wake of a federal appeals court vacating the Federal Energy Regulatory Commission’s Order 745, the role of demand response in wholesale markets is up in the air. Despite this uncertainty, PJM still has a responsibility to ensure the grid’s reliability and its markets’ efficiency.

PJM has filed with the FERC a “stop-gap” or “temporary detour” proposal that will allow demand response to continue to participate in PJM’s capacity market (called the Reliability Pricing Model) in a way that is consistent with the appeals court’s ruling. PJM will only implement these changes if the United States Supreme Court denies the Commission’s petitions to review the case, which is ultimately about the FERC’s jurisdiction over demand response as a product.

The filing is available on PJM’s website.

Learn more about demand response on the PJM Learning Center.

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The Polar Vortex, One Year Later

Well here we are again, facing another cold snap.

At this time a year ago, the PJM region and the eastern U.S. were in the throes of the bitter cold of the Polar Vortex. On Jan. 7, 2014, the cold drove demand for electricity to PJM’s highest-ever winter usage. Eight of the 10 highest winter peaks in PJM happened in last January’s extreme cold.

The Polar Vortex in 2014 uncovered issues that needed to be addressed – especially poor generator performance that meant capacity was not available when needed to meet high consumer demand in the extreme cold.

In fact, 22 percent of the generation in PJM was unavailable to serve consumers on coldest day of the year. More than 40,000 megawatts of the 180,000 megawatts in the PJM fleet were not able to deliver power when the region needed it most.

Against the backdrop of extreme weather, industry change and the coal-to-natural gas fuel transition, PJM developed its Capacity Performance plan. It establishes a pay-for-performance standard for power supplies: Generators will be required to deliver energy whenever PJM declares that emergency conditions exist. If they don’t, they’ll be assessed payments that will go to generators which over-perform. PJM filed the plan on Dec. 12, 2014, for approval by the Federal Energy Regulatory Commission.

This is not the traditional capacity definition, in which resources commit to deliver energy when called on – if they are available.

Capacity Performance is a “no-excuses” approach. It sets a new standard that requires generators to perform when PJM calls on them in system emergencies, in hot or cold weather. It directly links capacity payments and performance. It’s an insurance policy to ensure the reliability of the system that provides essential electricity to 61 million people.

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The Gift of Perfect Dispatch

So far in 2014, PJM has saved its members $144 million in production costs using a process called “Perfect Dispatch.”

Perfect Dispatch measures the ability of PJM’s dispatch operations to minimize system production costs while still meeting reliability needs. The “perfect dispatch” for a given day is the hypothetical commitment of generators and dispatch that would result in the lowest production cost while maintaining reliability, and can only happen if all system conditions (such as the load forecast, generator availability and performance, and transmission outages and constraints) occur exactly as predicted.

While that’s not realistically achievable, it still acts as a great baseline to measure performance.

PJM scores how close to “perfect” its operations are by comparing its actual production costs to the optimal figure, setting goals each year to meet a certain percentage of Perfect Dispatch. Because of PJM’s size, even small improvements in dispatch performance can produce large savings for members. Since it was introduced in 2008, Perfect Dispatch has yielded more than $986 million in savings to PJM members.

Beyond monetary savings, Perfect Dispatch reduces wear, tear and emissions from generation resources because they are used more efficiently. You can learn more about how PJM works to protect reliability fairly and efficiently in the PJM Learning Center.

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Giving Thanks for Those Working Over Thanksgiving

As we look back and celebrate the things we’re thankful for over this Thanksgiving, PJM is especially thankful for our personnel who will be working tirelessly over the holiday to help keep the lights on.

We also want to recognize and thank the medical and emergency services professionals and volunteers as well as men and women in the armed services working selflessly over the holiday to care for and protect us at home and overseas.

Have a safe and happy Thanksgiving!

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PJM ‘Going the Distance’

In the giving spirit of the season, the image below represents the many ways that PJM gives back to the community. PJM employees walked, ran and biked approximately 8,703 miles for charities; logged more than 1,500 volunteer hours; and served nearly 4,000 meals at local shelters. See how else we are “going the distance” for our communities – Visit community.pjm.com.

PJM Gives

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PJM Prepared for Winter Demands

With the recent chill throughout the region PJM serves, we’ve already had a little taste of what this winter could bring.

Looking at the winter ahead, we’re confident there is sufficient capacity to meet our forecasted peak demand. As we mentioned on Wednesday, PJM has already set a new record peak demand for the month of November.

PJM started focusing on this winter’s preparedness early in the year while studying the lessons learned from the Polar Vortex in January 2014. The steps PJM has been taking include more testing of generating equipment beforehand, improving operating procedures and improving coordination with the gas pipeline industry.

The times of day and ways people use electricity also varies with the weather and with the seasons. The graphs below show examples of PJM’s demand curves (which track electricity usage throughout the day) during different seasons. PJM’s Learning Center has more about load and demand changes with the seasons. We also have a video that explains more about the subject.

Load-Curves

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Fall Chill Brings Record November Usage

As temperatures plummeted throughout the country, it looks like PJM set a new a record peak demand on Tuesday for the month of November, serving 121,986 megawatts at 7 p.m. eastern. While this number is a preliminary reading (the official number will come in sometime later), it does speak to Tuesday and today’s unusual cold.

If you’re interested in keeping track of PJM’s daily peaks and load forecast, PJM posts these numbers daily on its Twitter page.

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An MRI for the Electric Grid

In the same ways doctors and specialists use the latest medical technologies to detect potential problems in our bodies, PJM uses new technologies to detect potential problems on the grid.

Using a U.S. Department of Energy grant, PJM’s member transmission owners have installed more than 370 synchrophasors in more than 100 substations in 10 states. Synchrophasors take high-speed measurements of voltage, current and frequency.

Similar to how an MRI shows a more-detailed picture of the human body than an X-ray, synchrophasors give a more detailed, comprehensive look at the electric grid than current tools allow. The technology combined with advanced analytical software is an excellent tool for analyzing disturbances on the grid and is a powerful tool for system planning as well as monitoring and anticipating future disturbances.

To learn more about synchrophasors, check out the PJM Learning Center.

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PJM’s Grid 20/20 Explores Resource Diversity

The world’s largest and fastest fuel switch, evolving federal policies and the increasing use of non-traditional generation are driving the power industry to recognize the greater need for resource diversity, said PJM Interconnection President and CEO Terry Boston at PJM’s Grid 20/20: Focus on Resource Diversity forum.

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PJM President and CEO Terry Boston

Held last week in Washington D.C., the event also welcomed Federal Energy Regulatory Commission Chairman Cheryl LaFleur and featured two panels that discussed shifting trends in resource types.

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FERC Chairman Cheryl LaFleur

“We’re facing a big change from the normal pace at which the grid evolved,” noted Boston in his opening remarks. “Looking back 80 years, typically it has taken a decade for a new fuel to emerge as a major source of generation.”

Boston explained that PJM’s current capacity mix is 40 percent coal, 30 percent natural gas, 19 percent nuclear and 11 percent “other,” including renewable resources. Those percentages are changing as the industry rapidly moves to natural gas as a primary fuel.

In her keynote address, FERC Chairman LaFleur said that competitive energy markets have for the most part done a good job attracting new generation and noted that the nation is at a key point in the development of electricity markets.

Diverse panelists from ISO New England, FirstEnergy Solutions, Calpine, Hydro Quebec, Duke Energy, Edision Electric Institute, AEP, Illinois Citizens Utility Board and Hawaiian Electric engaged in a lively discussion about their insights and experience on resource diversity.

More information is available at grid2020.pjm.com.

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Solar and Electric Vehicle Charging Station Pilot Recognized

PJM Interconnection supports a number of advanced technology pilots. It’s great when one of them is honored by the electricity industry. Recently, PJM, TimberRock Energy Solutions, General Motors and OnStar received PV America’s Project of Distinction award for 2014 at its annual conference.

Spearheaded by TimberRock, GM and OnStar, the project worked to integrate solar power, energy storage, smart grid functionality and advance vehicle-to-grid capabilities at an electric vehicle charging station at GM’s E-Motor Plant in White March, Md. In the pilot, the individual resources were aggregated as a single capacity resource that could be dispatched to both the host site or to PJM to provide services such as frequency regulation.

The participating companies continue to work to integrate the project with PJM to participate in its frequency regulation market.

Photo courtesy of TimberRock Energy Solutions.

Photo courtesy of TimberRock Energy Solutions.

PJM frequently works with its members and other innovators to support pilot projects that explore how their technologies and services can integrate with the grid to make it more reliable and efficient. If you’d like to learn more about pilots in PJM, check out the Learning Center.

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