Understanding PJM Capacity Demand Response Changes

Use this helpful tool to better understand the upcoming changes in PJM’s Emergency Capacity Demand Response market

PJM and its Emergency Capacity Demand Response programs have seen many changes over the past 10 years, and 2018 will be no exception.  Beginning June 1, PJM’s Limited, Extended Summer, and Annual DR programs will be discontinued in favor of new Base Capacity and Capacity Performance (CP) programs.

The following matrix provides detailed overviews of PJM’s 2018/19 program year capacity programs, letting you compare the soon-to-be-retired programs to the 2018/19 offerings. We’ve also prepared a handy pricing chart that shows how much you can potentially earn with these new programs. We hope the program matrix and pricing chart will give you a solid understanding of the changes and opportunities ahead.

Looking beyond the 2018/19 program year, Base Capacity will be retired at the end of the 2019/20 season, leaving CP as PJM’s only emergency capacity demand response program. CP has, at times, been described as being of lesser value for participants. We believe that CP may actually be more lucrative for participants, and not quite as complicated (or as off-putting) as some have proposed. We explore Capacity Performance in greater detail in our white paper, “PJM Capacity Performance is Here. Don’t Believe the Myths”, and our webinar, “Myth Busting: Living in a PJM Capacity Performance World.” We hope you’ll make use of these valuable resources.

PJM Capacity Programs

Limited Extended Summer Base Capacity (Base) Capacity Performance (CP) Summary
Program lifecycle No longer available after June 1, 2018 No longer available after June 1, 2018 Available only for the summer 2018 and summer 2019 program years. No longer available as of summer 2020 Will be the only PJM capacity product starting summer 2020 As of June 1, 2018, Base and CP will be the only capacity DR programs available. In summer 2020, CP will be the only available program.
Participation Period Jun - Sep. 12 PM - 8 PM. Excludes weekends and national holidays Jun - Oct, May: 10 AM - 10 PM Jun - Sep: 10 AM - 10 PM Jun - Oct, May: 10 AM - 10 PM. Nov - Apr: 6 AM - 9 PM CP will require year-round commitment*. Participants will be able to enroll in summer participation in the Base Capacity program until summer 2020.
Number of Events Maximum 10 events Unlimited events Unlimited events Unlimited events Both Base and CP will have an unlimited number of potential events. While we have not seen any mandatory events since 2013 or voluntary events since the Polar Vortex in 2014, the programs allow for numerous events to be called.
Event Duration Maximum 6-hour duration Maximum 10-hour duration Max 12-hour duration Jun-Oct, May: 12-hour duration Nov - Apr: 15-hour duration Event durations are longer in both Base and CP versus the Limited and Extended programs. "Winter" event durations hours for CP are 15, compared to the 12 hour max hours of "summer" duration.
Lead Time and Energy Rate 30-min: $1,849/MWh 30-min: $1,849/MWh 30-min: $1,849/MWh 30-min: $1,849/MWh The Energy Rate remains the same for event lead times. As with the previous programs, a shorter lead time leads to higher energy rates.
60-min: $1,425/MWh 60-min: $1,425/MWh 60-min: $1,425/MWh 60-min: $1,425/MWh
120-min: $1,100/MWh 120-min: $1,100/MWh 120-min: $1,100/MWh 120-min: $1,100/MWh
Metering Requirements Minimum 1-hour utility grade interval meter Minimum 1-hour utility grade interval meter Minimum 1-hour utility grade interval meter Minimum 1-hour utility grade interval meter As with previous programs, a minimum 1-hour utility grade interval meter is required to participate.

*Year-round does not mean you cannot participate if you do not have a winter load. Contact us to find out more.

Pricing by Zone Base Capacity vs. Capacity Performance in the 2018/19 Season


Learn more about CP and the PJM market in our On-Demand PJM Webinar Series, which features content fully explaining the CP program, as well as many other demand management programs offered by CPower. You can also find blog posts and more on our Knowledge Hub.