PJM Interconnection, which oversees wholesale electricity market operations for the mid-Atlantic region, is undergoing reforms to improve how the market values and prices generation capacity to ensure reliability. Policy Integrity submitted comments focused on PJM's proposed shift to a seasonal capacity market design and other proposed changes to reliability metrics.
The key points made in the comments are:
- PJM's proposal to shift to a seasonal capacity market, with seasonal targets and accreditation values, is likely to improve cost-effectiveness compared to the current annual design. Seasonal parameters would better capture seasonal fluctuations in supply and demand.
- PJM's proposal to adopt a new Expected Unserved Energy (EUE) reliability metric would allow reliability targets to be set more carefully by accounting for both the frequency and magnitude/duration of possible shortages.
- PJM's plan to refine its Effective Load Carrying Capability analysis for all resource types would help reliability planning better incorporate uncertainties in supply availability.