Dive Brief:

  • The PJM Interconnection’s rules effectively block large-scale residential demand response aggregation, potentially increasing energy and capacity prices, CPower Energy Management said in a complaint filed with the Federal Energy Regulatory Commission.

  • The PJM’s tariff is unjust and unreasonable because it prevents curtailment service providers, or CSPs, from competing with other market participants to provide demand response residential service and because it potentially allows utilities to exercise market power, CPower said in the complaint filed Thursday.

  • There is “huge latent potential” for large-scale residential demand response in PJM, Ken Schisler, CPower senior vice president of regulatory and government affairs, said. “Every residential home in PJM probably has a smart device or smart appliance with the capability to participate in demand response programs. They just don’t have a way to get that to market.”

Dive Insight:

While increased residential demand response in PJM could increase grid reliability and lower energy and capacity prices, CSPs are unable to tap those resources because of a Catch-22 in PJM’s rules, according to CPower.

Utilities don’t give CSPs needed information from their advanced metering infrastructure systems that is required for aggregations of thousands of residential DR customers to take part in PJM’s markets, CPower said. At the same time, PJM’s rules bar CSPs from using approved statistical sampling rules for DR residential participation in the grid operator’s energy and capacity markets if they have smart meters, according to the company.

AMI utility meters have been mainly designed for utility retail billing needs and for distribution system management purposes, and often lack the capability to meet PJM’s “extensive” wholesale demand response measurement, verification settlement, and compliance requirements, the LS Power subsidiary said.

In cases where the AMI meters could provide the needed customer information to CSPs, utilities have “consistently demonstrated limited cooperation or limited ability to cooperate” or have refused to provide CSPs with the data at a scale that would enable CSP participation in PJM’s markets, CPower said.

Further, existing AMI may be ill-suited to providing the needed information as the Internet of Things is expanding demand response opportunities, CPower said.

FERC should order PJM to let CSPs and utilities use statistical sampling of interval metering equipment to meet the grid operator’s measurement and verification requirements, which is already allowed for non-AMI meters, CPower said. The requirements are used to determine how much demand response is expected to be available and how much is delivered.

CPower said it failed to advance its concerns through PJM’s stakeholder process.

PJM is reviewing the complaint, according to Jeffrey Shields, a spokesman for the grid operator.

PJM operates the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states, and the District of Columbia.