PJM©2013

Uplift in PJM

Adam Keech

Director, Market Operations

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PJM©2013 2

Uplift in PJM

• Presentation focused on

bid cost guarantee for

resources scheduled by

PJM

• Early 2014 numbers are

high – Polar Vortex

– Gas prices

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Month Day Ahead Real-Time Reactive Opportunity Cost Total

Jan 5,928,134 67,758,162 23,604,234 11,481,302 108,771,833

Feb 4,980,867 62,395,543 17,624,984 4,730,662 89,732,056

Mar 6,302,475 10,288,210 14,350,137 7,127,313 38,068,135

Apr 5,712,618 17,635,540 13,670,581 5,781,873 42,800,612

May 5,403,220 14,006,295 17,214,142 8,518,358 45,142,016

June 6,584,357 10,816,722 22,055,238 7,029,836 46,486,153

July 8,306,004 23,655,288 19,633,772 19,492,274 71,087,338

Aug 4,159,470 8,819,526 27,827,070 5,666,954 46,473,020

Sept 6,005,482 19,918,883 27,534,906 10,974,087 64,433,358

Oct 2,473,705 9,505,540 41,721,300 3,085,323 56,785,868

Nov 2,799,522 15,565,028 42,743,907 2,144,870 63,253,327

Dec 5,224,275 34,868,398 43,464,829 1,108,647 84,666,150

2013-Total $63,880,129 $295,233,135 $311,445,100 $87,141,499 $757,699,866

PJM-2013

PJM©2013 3

Very Localized

• Some statistics from 2013:

– Day Ahead Uplift Top 10 = 60% of total Day Ahead

• Top 5 units are 55% of total

– Real-Time Uplift Top 10 = 58% of total Real-Time

• Top 5 units are 46% of total

– Reactive Uplift Top 10 = 62% of total Reactive

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PJM©2013 4

Where most of it comes from…

• Units scheduled for reliability and sitting at min

– For reactive or thermal constraints • Output above minimum not needed to resolve constraint

• Longer than required min run times

• High incremental cost at min and no load costs

– Startup cost not as big of a problem

• Ineligible to set LMP under PJM rules

• 4-hour problem with a 24-hour solution

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PJM©2013 5

Emergency Uplift Costs

• Emergency Uplift Costs

– Emergency DR

– Emergency purchases

• Stakeholder group tasked with short and long term

changes during peak periods

– Better management of interchange

– Scheduling and operating to increased reserve requirements

– Short term discussions underway

• Mixed feedback

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PJM©2013 6

RTO Load, LMP and Interchange on July 18th, 2013

Average Interchange Increases

64% from HE14 to HE15 $28

$77$95

$74 $78$101

$298

$465

$52

$232$250

$266

$173

$130

96,033 MWRTO Valley

158,156 MWRTO Peak

160,285 MW with Estimated Demand Response

-$100

$0

$100

$200

$300

$400

$500

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Hour Ending

RTO Total LMP

RTO Hourly MW Load (Preliminary)

RTO Load w/ Economic & Emergency DR

RTO Net Actual Interchange

4,686 MW

7,692 MW

Emergency DR

14:40 - Emergency Load Management ImplementedPECO, PPL, ATSI Zones

Cancelled 18:00

15:00 - Emergency Load Management ImplementedAEP Canton Subzone

Cancelled 18:00

PJM©2013 7

What’s been done?

• Leaner scheduling practices

– Schedule less large units • More reliance on CTs where possible

• Charges for this reason have dropped precipitously since (Reactive charges mostly)

– Higher prices for short durations, less uplift

– Local issues still may require running uneconomic generation • Can we price this out?

• SENECA Interface has been implemented (Closed Loop Interfaces)

– Transmission topology solution as well

• Planning upgrades scheduled for June 2014 for Cleveland Area

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PJM©2013 8

Closed Loop Interfaces - Cleveland

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PJM©2013 9

Pricing Solutions

• Extend existing logic for price-setting of inflexible units to

generators sitting min for a transmission constraint

(reactive/voltage or thermal) to set LMP

– Already done in PJM for CTs that are not dispatchable

• Model and bind the constraints these generators are

running for in real-time and day-ahead

– Likely closed-loop interfaces

• Ensure these facilities are modeled appropriately in

ARR Allocations and FTR Auctions

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PJM©2013 10

Thermal Uplift Issues

• Closed-loop interfaces and/or binding thermals at levels

significantly less than their rating

– This can create significant (additional) FTR funding problems

• ARR allocation methodology results in over-allocation in

some cases

– Binding facilities where there are more FTRs than the flow on the

line will create underfunding

– Stage 1A infeasible facilities

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PJM©2013 11

Thermal Uplift Issues

• PJM has reviewed problem areas to schedule more

optimally

• Several paths

– Live with the uplift (attempt to minimize)

– Bind the facilities and live with the underfunding

• Allocate underfunding on these facilities differently?

– Change the ARR allocation to limit over-allocating and bind the

facilities

• Allocate underfunding on these facilities differently?

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PJM©2013 12

Energy Market Uplift Senior Task Force

• EMUSTF

– Tasked with overall review of uplift credit and charge

calculations

– Current allocation has some drawbacks

– Cost causality versus consistency?

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PJM©2013 13

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