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GEN-301

Introduction to PJM Load Response. GEN-301. What is Load Response?. “ Load response is a highly useful and beneficial tool to reduce costs and maintain reliability during peak periods when generation supplies may be scarce.” According to the April 30,2002 FERC Order. PJM Load Response .

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GEN-301

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  1. Introduction to PJM Load Response GEN-301 ©2006 PJM

  2. What is Load Response? “Load response is a highly useful and beneficial tool to reduce costs and maintain reliability during peak periods when generation supplies may be scarce.” According to the April 30,2002 FERC Order ©2006 PJM

  3. PJM Load Response EMERGENCY ECONOMIC Designed to provide a method by which end-use customers may be compensated by PJM for reducing load during an emergency event. Designed to provide an incentive to customers or curtailment service providers to reduce consumption when PJM LMP prices are high. Load Response = Demand Side Response (DSR) ©2006 PJM

  4. Registered MW of Load Reduction(through 2006) ©2006 PJM

  5. 2006 Monthly MWh Reductions - Economic ©2006 PJM

  6. 2006 Monthly Site Participation – Economic ©2006 PJM

  7. 2006 Monthly Net CSP Credits – Economic ©2006 PJM

  8. Participation Growth – Economic ©2006 PJM

  9. Comparison of Revenue Opportunitiesfor Demand Response Current vs. Revised ©2006 PJM

  10. Types of Load Response Who Offers Load Response Programs? • Utility Sponsored • Curtailment Service Provider Sponsored • Load Serving Entity Sponsored • Independent System Operator Sponsored ©2006 PJM

  11. Roles of PJM Market Participants Generator: PJM Member that owns, or leases, facilities for generation of electric energy that are located within the PJM Control Areas. Load Serving Entity: PJM Member, including Load aggregator or power marketer, serving end-users within the PJM Control Area, to sell electric energy to end-users with the PJM Control Areas. End Use Customer Electric Distribution Company : PJM Member that owns, or leases, electric distribution facilities that are used to provide electric distribution service to electric load within the PJM Control Areas. Curtailment Service Provider: PJM Members that will act on behalf of end-use customers who wish to participate in PJM market opportunities. ©2006 PJM

  12. Options to Participate EMERGENCY ECONOMIC** Day Ahead Market • CSP Submit Day Ahead Bid in eMKT • PJM Notifies CSP via eMKT • Obligated in Real Time if Bid clears Real Time Market • CSP Notifies PJM via email one hour prior to reduction • Voluntary Curtailment Dispatched by PJM in Real Time • CSP Submits operational info via eSuites • PJM Notifies CSP via email Energy Only Option • PJM sends notification of event via email to CSP • Energy payment • Voluntary Curtailment Full Emergency Option • PJM sends notification of event via email to CSP • Energy payment and capacity credit • Mandatory Curtailment **Except Real Time LMP Based Customer ©2006 PJM

  13. Payment to Load Reducers EMERGENCY ECONOMIC ** PJM pays Zonal LMP • Resource is made whole to its offer value, which includes: • Minimum dispatch price • Minimum down time • Shutdown costs • Full Emergency participants also receive capacity credit If Zonal LMP < $75/MWh, • PJM pays Zonal LMP - Retail Rate (Retail Rate = Generation + Transmission) If Zonal LMP > = $75/MWh, • PJM pays Zonal LMP **Except Real Time LMP Based Customer ©2006 PJM

  14. DrugCo Site # 1 – Real Time Load Curtailment when zonal LMP < $75 RT LMP less than forecast Hour 12 Scheduled MW Reduction = 5 Actual MW Reduction = 4 Real Time Hourly Zonal LMP = $40 Retail Rate (GT) = $35 (RT LMP – GT) * MW = $5 * 4 MW = $ 20 PJM LSE #1 (EDC) LSE #3 (RT LMP – GT) * MW= $5 * 4 MW = $20 GenCo LSE #2 CSP Customer X% of $ ©2006 PJM

  15. DrugCo Site # 1–Dispatched by PJM in Real Time Imagine If….. Customer wants to be Dispatched by PJM • Shutdown Costs = $1,500 • Minimum Down Time = 6 Hours • MW Reduction = 5 MW • Retail Rate (G&T) = $35 /MWh Example: ) ( $ 1,500 6 Hours 1 5 MW + = $85.00 $ 35 /MWh * Action Customer Decides to allow PJM to Dispatch in Real Time Customer submits operational info to PJM (Bid Price ($87) > Marginal Cost) PJM Forecasts Real Time LMP > $87.00 Hours 12 – 18 PJM dispatches load reduction ©2006 PJM

  16. DrugCo Site # 1 – Dispatched by PJM in Real Time when zonal LMP > $75 Hour 12 Bid Price = $87.00 Bid Quantity (MW) = 5 Real Time Hourly Zonal LMP = $90 Actual MW Reduction = 4 Retail Rate (GT) = $35 RT LMP greater than Bid Price (.1667 * GT) * MW= $ 5.83 * 4 MW =$23.34 (.6667*GT)* MW= $23.83 * 4 MW = $93.34 PJM LSE #3 (RT LMP-GT) * MW= $ 55 * 4 MW = $220 LSE #1 (EDC) (.1667 * GT) * MW= $ 5.83 * 4 MW =$23.34 RT LMP * MW= $ 90 * 4 MW = $360 LSE #2 GenCo Load Ratio Shares w/in zone: LSE #1: 66.67% LSE #2: 16.67% LSE #3: 16.67% CSP Customer X% of $ ©2006 PJM

  17. Payments, Costs, & Risks ©2006 PJM

  18. Payments, Costs, & Risks ©2006 PJM

  19. New User Interfaces for Demand Response • Curtailment Service Provider (CSP) Home Page • Registration • Settlement • Real Time Load Reduction Notification ©2006 PJM

  20. Home ©2006 PJM

  21. Registration ©2006 PJM

  22. Customer Management ©2006 PJM

  23. Notifications ©2006 PJM

  24. Notifications ©2006 PJM

  25. Settlement ©2006 PJM

  26. Settlement ©2006 PJM

  27. Questions?? PJM Load Response ©2006 PJM

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