A regional transmission organization (RTO), the Pennsylvania-Jersey-Maryland Interconnection (PJM) coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

The State of the PJM Market from The Current

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About the PJM Market

PJM operates the Reliability Pricing Model (RPM), a forward capacity market into which capacity resources participate by selling their available capacity to help PJM meet its forecasted load needed to ensure reliability in each delivery year.

The RPM is made up of four auctions. The Base Residual Auction (BRA) is the first and largest auction PJM conducts and is held three years in advance of the delivery year. 

PJM also conducts three Incremental Auctions (IA). IAs take place once a year and allow PJM to adjust their load forecast. They also allow other market participants to buy and sell capacity as needed.   

Once a RPM commitment has cleared any one of the four auctions, the market participant is then obligated to deliver that capacity on June 1 of the designated delivery year. 

Demand Response Programs in PJM

To help maintain its grid reliability, PJM offers the following demand response programs, which pay organizations for using less energy when the grid is stressed or electricity prices are exceptionally high.

Capacity Performance (CP) – PJM’s capacity demand response program helps the grid maintain year-round reliability by reducing demand through curtailment events. Organizations that participate in the Capacity Performance program can earn money for being available to use less energy when the grid is stressed.

Participants pick a fixed level of consumption (Firm Service Level or FSL). When called upon by the grid operator, they will consume no more than that amount.

PJM’s Synchronized Reserves Program – is available 24/7/365 and helps the grid react to short-term disturbances. Each hour, customers may offer a price at which they’re willing to be available to curtail if needed. 

If their offer is accepted, they receive at least their offer price and must be on-call to curtail for up to 30 minutes to within 8 minutes of an event notification.

Peak Demand Management in PJM – Peak Demand Management or peak-shaving is the practice of an organization reducing its demand during times of peak grid stress to lower its capacity charges. 

Energy Efficiency in PJM – PJM pays businesses for permanent load reduction resulting from energy efficiency projects they have completed or will be completed in the future. The program pays organizations capacity revenue for up to four years following the completion of a qualified project.

PJM’s Economic Load Response – programs are available 24/7/365 and allow participating businesses to manage their electricity use in response to conditions in the wholesale energy market. Participants are notified when wholesale electricity prices are high and reduce their electric consumption, thereby minimizing the impact of price spikes, reducing the need for expensive capacity generation, and helping keep prices stable in the market.

PJM’s Frequency Regulation Program – is available 24/7/365. Resources in the Frequency Regulation market must be able to respond within seconds to fluctuations between generation and consumption on the PJM grid.

Participating organizations earn money for being available to rapidly increase and decrease their usage in response to a dynamic signal and are measured on their ability to perform when signaled.

Backup Generators in PJM – Properly permitted, your backup generator can play a key role in your organization earning revenue with demand response and saving money with demand response.

CPower’s team of engineers can assess your generator and determine if it complies with the EPA’s rules for demand response participation to support the grid. If it does, CPower has the authority to officially certify your generator’s compliance with the EPA’s regulations, thereby clearing it for demand-side energy management participation.

PJM Program Parameter Overview