PJM Reports "Poor Generator Response" Led to "Operational Issues" on Day Firm Load Shed

In seeking various changes to demand response rules and requirements at FERC, PJM reported that it yet again experienced "poor generator response" during a time when the grid was stressed.

Specifically, PJM said in the FERC filing that on September 10, 2013, "PJM under-forecasted the load by 4,000 MW and experienced operational issues due to poor generator response during a Synchronized Reserve Event as well as numerous transmission contingencies due to the combination of unseasonably hot weather and both generation and transmission facilities experiencing planned and unplanned maintenance outages."

September 10 was, in fact, one of the recent days during which PJM was forced to curtail firm load -- despite the billions paid to capacity suppliers for "resource adequacy."

Separately, in a recently released "Technical Analysis of Operational Events and Market Impacts During the September 2013 Heat Wave," PJM reported that, "Although the synchronized reserve event lasted for more than an hour, PJM did not observe generation response greater than approximately 400 MW. Generation response within the first 10 minutes of initiating the synchronized reserves was approximately 200 MW compared to the available 1,655 MW of synchronized reserves."

PJM also reiterated in the FERC filing that the grid was challenged by, "generation and transmission facilities experiencing planned and unplanned maintenance outages." (emphasis added)

In the FERC filing, PJM goes on to describe numerous deficiencies with its administratively called demand response capacity resources and procedures. PJM noted that deficiencies in the current administrative construct led to the payment of $38 million to demand resources which were no longer needed due to changing system conditions, with PJM noting, "much of these costs could have been avoided had PJM's market rules not required a two hour notification time and a two hour minimum duration [for the demand resources]."

While PJM proffers over a half a dozen tariff changes to fix these problems, we question whether more administrative rules and requirements are a solution. Contrast this to the highly successful ERCOT energy-only market, which places a greater emphasis on suppliers' and loads' response to price signals drive behavior, not administrative dispatch.