Understanding PJM Capacity Performance in 2020
CPower is committed to helping you maximize your revenue in the PJM Capacity Performance Program
At CPower, we’re happy to be your trusted partner for demand-side energy management. We wanted to keep you up-to-date about your upcoming transition from the Base Capacity program to PJM’s Capacity Performance program.
WHAT’S CHANGING
In June 2020, PJM will retire the existing Base Capacity demand response program, making PJM Capacity Performance the sole emergency capacity program available to customers participating in demand response. The PJM Capacity Performance program requires year-round availability, instead of summer-only availability. In order to create a more reliable energy market year round, PJM introduced this program in 2017 (you can read more about PJM’s reasons for the change here). On the chart below, we’ve outlined the details about the Capacity Performance program, including zonal prices for the 2020/21 power year.
WHAT WE ARE DOING AND WHAT TO EXPECT
Good news. CPower is working with PJM to make this program easier to participate in than in previous years, enabling customers to enroll with different values for the summer and winter seasons. As a CPower customer, you can remain participating in emergency demand response even if you do not have a winter or summer curtailable load. Your CPower account team will be in touch to discuss your summer and winter load drop capabilities and participation. We will work with you to maximize your ability to participate, assess any additional opportunities, and answer any questions you may have.
Capacity Performance
| Program Details | |
|---|---|
| Minimum Size | 100kW minimum load reduction (this may be aggregated across multiple sites in a zone). |
| Event History | There have been no events since the 2014 Polar Vortex, and no mandatory events since 2013. While historically rare, events are possible during both summer and winter seasons. There is no maximum number of events for this program. |
| Event Window | Summer (June 2020 - October 2020, May 2021) : 10am - 10pm, events can last up to 12 hours. Winter (November - April): 6am - 9pm, events can last up to 15 hours. |
| Notification | Customers will be notified 30 minutes ahead of an event. Some customers may qualify for 60 or 120 minute lead times, but longer lead times will reduce emergency energy payments (see chart). Notifications via SMS, phone, and email. |
| Capacity Payments | Customers will earn a capacity payment based on the value of capacity in their zone (see rate chart) and the difference between their adjusted seasonal Peak Load Contribution (PLC) and their Firm Service Level (FSL) during events. Customers may have different FSL and PLC values during the Summer (Jun - Oct, May) and Winter (Nov - Apr) seasons. |
| Energy Payments | Customers earn hourly Emergency Energy payments (30 minute lead time $1,849; 60 minutes $1,425, 120 minutes $1,100) for their load drop contribution during events. |
| Compliance | Mandatory year-round. Summer season is June 2020 - October 2020 + May 2021, Winter season is November - April. |
| Settlements | Customers will be paid, adjusted for any under performance, 60 days following each program year quarter (Nov, Feb, May, Aug). |
| Consequences of Non-Performance | Failure to perform during an event will result in Capacity payments reduced by an hourly noncompliance rate (see chart) for each hour of noncompliance during an event. |
| Testing | Mandatory 1-hour test. Failure to comply with the annual performance test will result in loss of revenue for the noncompliance amount. |
| Enrollment Deadline | May 1, 2020. |
| Metering | 1-hour utility grade interval meter required. |
$/MW - Year Rates for Capacity Performance in 2020/21
| LDA | ZONE | Summer | Winter | Annual |
|---|---|---|---|---|
| EMAAC | AECO | $34,568 | $34,004 | $68,572 |
| DPL | $34,568 | $34,004 | $68,572 | |
| JCPL | $34,568 | $34,004 | $68,572 | |
| PECO | $34,568 | $34,004 | $68,572 | |
| PSEG | $34,568 | $34,004 | $68,572 | |
| RECO | $34,568 | $34,004 | $68,572 | |
| MAAC | BGE | $15,831 | $15,573 | $31,404 |
| PEPCO | $15,831 | $15,573 | $31,404 | |
| METED | $15,831 | $15,573 | $31,404 | |
| PENELEC | $15,831 | $15,573 | $31,404 | |
| PPL | $15,831 | $15,573 | $31,404 | |
| RTO | AEP | $14,082 | $13,852 | $27,934 |
| APS | $14,082 | $13,852 | $27,934 | |
| ATSI | $14,082 | $13,852 | $27,934 | |
| DAY | $14,082 | $13,852 | $27,934 | |
| DEOK | $23,920 | $23,530 | $47,450 | |
| DOM | $14,082 | $13,852 | $27,934 | |
| DUQ | $14,082 | $13,852 | $27,934 | |
| EKPC | $14,082 | $13,852 | $27,934 | |
| COMED | COMED | $34,614 | $34,050 | $68,664 |
Examples (Base Capacity 2019/20 vs Capacity Performance 2020/21)
An industrial facility outside of Philadelphia (PECO) currently participates in Base Capacity with a 3.0 MW load drop. Working with CPower to review their curtailment plans, they discover they can continue to participate at 3.0 MW during the summer, and 2.0 MW during the winter in the Capacity Performance program.
2019/20 Base Capacity Program (PECO)
$36,516 x 3.0 MW = $109,548*
2020/21 Seasonal Performance Program (PECO)
$34,568 x 3.0 MW + $34,004 x 2.0 MW = $171,712*
A commercial building in Chicago (ComEd) has the capacity to curtail 1.5 MW during the summer season, performing well in the Base Capacity product over the last few years. Working with CPower to identify winter curtailment opportunities, the same building can drop 1.0 MW in the winter season.
2019/20 Base Capacity Program (ComEd)
$66,894 x 1.5 MW = $100,341*
2020/21 Seasonal Performance Program (ComEd)
$34,614 x 1.5 MW + $34,050 x 1.0 MW = $85,971*
* Revenue paid by PJM, prior to contracted revenue share with CPower
Learn more about Capacity Performance and the PJM market in our PJM State of the Market webinar, which discusses the changes in capacity demand response as well as many other demand management programs offered by CPower. You can also find blog posts and more on our Knowledge Hub.