ER26-3380-000 · 2026-07-31 · PJM Interconnection, L.L.C.
Attachment A - Marked Tariff Records.pdf
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Attachment A
Revisions to the
PJM Open Access Transmission Tariff
and PJM Reliability Assurance
Agreement
(Marked/Redline Format)
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Definitions – C - D
Canadian Guaranty:
“Canadian Guaranty” shall mean a Corporate Guaranty provided by an Affiliate of a Participant
that is domiciled in Canada, and meets all of the provisions of Tariff, Attachment Q.
Cancellation Costs:
“Cancellation Costs” shall mean costs and liabilities incurred in connection with: (a) cancellation
of supplier and contractor written orders and agreements entered into to design, construct and
install Attachment Facilities, Direct Assignment Facilities and/or Customer-Funded Upgrades,
and/or (b) completion of some or all of the required Attachment Facilities, Direct Assignment
Facilities and/or Customer-Funded Upgrades, or specific unfinished portions and/or removal of
any or all of such facilities which have been installed, to the extent required for the Transmission
Provider and/or Transmission Owner(s) to perform their respective obligations under Tariff, Part
IV and/or Part VI.
Capacity:
“Capacity” shall mean the installed capacity requirement of the Reliability Assurance Agreement
or similar such requirements as may be established.
Capacity Emergency Transfer Limit:
“Capacity Emergency Transfer Limit” or “CETL” shall have the meaning provided in the
Reliability Assurance Agreement.
Capacity Emergency Transfer Objective:
“Capacity Emergency Transfer Objective” or “CETO” shall have the meaning provided in the
Reliability Assurance Agreement.
Capacity Export Transmission Customer:
“Capacity Export Transmission Customer” shall mean a customer taking point to point
transmission service under Tariff, Part II to export capacity from a generation resource located in
the PJM Region that has qualified for an exception to the RPM must-offer requirement as
described in Tariff, Attachment DD, section 6.6(g).
Capacity Import Limit:
“Capacity Import Limit” shall have the meaning provided in the Reliability Assurance
Agreement.
Capacity Interconnection Rights:
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“Capacity Interconnection Rights” shall mean the rights to input generation as a Generation
Capacity Resource into the Transmission System at the Point of Interconnection where the
generating facilities connect to the Transmission System.
Capacity Market Buyer:
“Capacity Market Buyer” shall mean a Member that submits bids to buy Capacity Resources in
any Incremental Auction.
Capacity Market Seller:
“Capacity Market Seller” shall mean a Member that owns, or has the contractual authority to
control the output or load reduction capability of, a Capacity Resource, that has not transferred
such authority to another entity, and that offers such resource in the Base Residual Auction or an
Incremental Auction.
Capacity Performance Transition Incremental Auction:
“Capacity Performance Transition Incremental Auction” shall have the meaning specified in
Tariff, Attachment DD, section 5.14D.
Capacity Resource:
“Capacity Resource” shall have the meaning provided in the Reliability Assurance Agreement.
Capacity Resource with State Subsidy:
“Capacity Resource with State Subsidy” shall mean (1) a Capacity Resource that is offered into
an RPM Auction or otherwise assumes an RPM commitment for which the Capacity Market
Seller receives or is entitled to receive one or more State Subsidies for the applicable Delivery
Year; (2) a Capacity Resource that has not cleared an RPM Auction for the Delivery Year for
which the Capacity Market Seller last received a State Subsidy (or any subsequent Delivery
Year) shall still be considered a Capacity Resource with State Subsidy upon the expiration of
such State Subsidy until the resource clears an RPM Auction; (3) a Capacity Resource that is the
subject of a bilateral transaction (including but not limited to those reported pursuant to Tariff,
Attachment DD, section 4.6) shall be deemed a Capacity Resource with State Subsidy to the
extent an owner of the facility supporting the Capacity Resource is entitled to a State Subsidy
associated with such facility even if the Capacity Market Seller is not entitled to a State Subsidy;
and (4) any Jointly Owned Cross-Subsidized Capacity Resource.
Capacity Resource Clearing Price:
“Capacity Resource Clearing Price” shall mean the price calculated for a Capacity Resource that
offered and cleared in a Base Residual Auction or Incremental Auction, in accordance with
Tariff, Attachment DD, section 5.
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Capacity Storage Resource:
“Capacity Storage Resource” shall mean any Energy Storage Resource that participates in the
Reliability Pricing Model or is otherwise treated as capacity in PJM’s markets such as through a
Fixed Resource Requirement Capacity Plan.
Capacity Transfer Right:
“Capacity Transfer Right” shall mean a right, allocated to LSEs serving load in a Locational
Deliverability Area, to receive payments, based on the transmission import capability into such
Locational Deliverability Area, that offset, in whole or in part, the charges attributable to the
Locational Price Adder, if any, included in the Zonal Capacity Price calculated for a Locational
Delivery Area.
Capacity Transmission Injection Rights:
“Capacity Transmission Injection Rights” shall mean the rights to schedule energy and capacity
deliveries at a Point of Interconnection of a Merchant Transmission Facility with the
Transmission System. Capacity Transmission Injection Rights may be awarded only to a
Merchant D.C. Transmission Facility and/or Controllable A.C. Merchant Transmission Facilities
that connects the Transmission System to another control area. Deliveries scheduled using
Capacity Transmission Injection Rights have rights similar to those under Firm Point-to-Point
Transmission Service or, if coupled with a generating unit external to the PJM Region that
satisfies all applicable criteria specified in the PJM Manuals, similar to Capacity Interconnection
Rights.
Charge Economic Maximum Megawatts:
“Charge Economic Maximum Megawatts” shall mean the greatest magnitude of megawatt power
consumption available for charging in economic dispatch by an Energy Storage Resource Model
Participant or Open-Loop Hybrid Resource in Continuous Mode or in Charge Mode. Charge
Economic Maximum Megawatts shall be the Economic Minimum for an Energy Storage
Resource or Open-Loop Hybrid Resource in Charge Mode or in Continuous Mode.
Charge Economic Minimum Megawatts:
“Charge Economic Minimum Megawatts” shall mean the smallest magnitude of megawatt power
consumption available for charging in economic dispatch by an Energy Storage Resource Model
Participant or Open-Loop Hybrid Resource in Charge Mode. Charge Economic Minimum
Megawatts shall be the Economic Maximum for an Energy Storage Resource or Open-Loop
Hybrid Resource in Charge Mode.
Charge Mode:
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“Charge Mode” shall mean the mode of operation of an Energy Storage Resource Model
Participant or Open-Loop Hybrid Resource that only includes negative megawatt quantities (i.e.,
the Energy Storage Resource Model Participant or Open-Loop Hybrid Resource is only
withdrawing megawatts from the grid).
Charge Ramp Rate:
“Charge Ramp Rate” shall mean the Ramping Capability of an Energy Storage Resource Model
Participant or Open-Loop Hybrid Resource in Charge Mode.
Cleared Capacity Resource with State Subsidy:
“Cleared Capacity Resource with State Subsidy” shall mean a Capacity Resource with State
Subsidy that has cleared in an RPM Auction for a Delivery Year that is prior to the 2022/2023
Delivery Year or, starting with 2022/2023 Delivery Year, the MWs (in installed capacity)
comprising a Capacity Resource with State Subsidy that have cleared an RPM Auction pursuant
to its Sell Offer at or above its resource-specific MOPR Floor Offer Price or the applicable
default New Entry MOPR Floor Offer Price and since then, any of those MWs (in installed
capacity) comprising a Capacity Resource with State Subsidy have been, the subject of a Sell
Offer into the Base Residual Auction or included in an FRR Capacity Plan at the time of the
Base Residual Auction for the relevant Delivery Year.
Closed-Loop Hybrid Resource:
“Closed-Loop Hybrid Resource” shall mean a Hybrid Resource without a storage component, or
that does not operate by charging its storage component from the grid.
Cold/Warm/Hot Notification Time:
“Cold/Warm/Hot Notification Time” shall mean the time interval between PJM notification and
the beginning of the start sequence for a generating unit that is currently in its cold/warm/hot
temperature state. The start sequence may include steps such as any valve operation, starting feed
water pumps, startup of auxiliary equipment, etc.
Cold/Warm/Hot Start-up Time:
For all generating units that are not combined cycle units, “Cold/Warm/Hot Start-up Time” shall
mean the time interval, measured in hours, from the beginning of the start sequence to the point
after generator breaker closure, which is typically indicated by telemetered or aggregated State
Estimator megawatts greater than zero for a generating unit in its cold/warm/hot temperature
state. For combined cycle units, “Cold/Warm/Hot Start-up Time” shall mean the time interval
from the beginning of the start sequence to the point after first combustion turbine generator
breaker closure in its cold/warm/hot temperature state, which is typically indicated by
telemetered or aggregated State Estimator megawatts greater than zero. For all generating units,
the start sequence may include steps such as any valve operation, starting feed water pumps,
startup of auxiliary equipment, etc. Other more detailed actions that could signal the beginning of
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the start sequence could include, but are not limited to, the operation of pumps, condensers, fans,
water chemistry evaluations, checklists, valves, fuel systems, combustion turbines, starting
engines or systems, maintaining stable fuel/air ratios, and other auxiliary equipment necessary
for startup.
Cold Weather Alert:
“Cold Weather Alert” shall mean the notice that PJM provides to PJM Members, Transmission
Owners, resource owners and operators, customers, and regulators to prepare personnel and
facilities for expected extreme cold weather conditions.
Collateral:
“Collateral” shall be a cash deposit, including any interest thereon, or a Letter of Credit issued
for the benefit of PJM or PJMSettlement, in an amount and form determined by and acceptable
to PJM or PJMSettlement, provided by a Participant to PJM or PJMSettlement as credit support
in order to participate in the PJM Markets or take Transmission Service. “Collateral” shall also
include surety bonds, except for the purpose of satisfying the FTR Credit Requirement, in which
case only a cash deposit or Letter of Credit will be acceptable.
Collateral Call:
“Collateral Call” shall mean a notice to a Participant that additional Collateral, or possibly early
payment, is required in order to remain in, or to regain, compliance with Tariff, Attachment Q.
Co-Located Resource:
“Co-Located Resource” shall mean a component of a Mixed Technology Facility that operates in
the capacity, energy, and/or ancillary services market(s) as a separate resource from the other
components of such facility.
Commencement Date:
“Commencement Date” shall mean the date on which Interconnection Service commences in
accordance with an Interconnection Service Agreement.
Committed Offer:
The “Committed Offer” shall mean 1) for pool-scheduled resources, an offer on which a resource
was scheduled by the Office of the Interconnection for a particular clock hour for an Operating
Day, and 2) for self-scheduled resources, either the offer on which the Market Seller has elected
to schedule the resource or the applicable offer for the resource determined pursuant to Operating
Agreement, Schedule 1, section 6.4, and the parallel provisions of Tariff, Attachment K-
Appendix, section 6.4, or Operating Agreement, Schedule 1, section 6.6, and the parallel
provisions of Tariff, Attachment K-Appendix, section 6.6, for a particular clock hour for an
Operating Day.
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Completed Application:
“Completed Application” shall mean an application that satisfies all of the information and other
requirements of the Tariff, including any required deposit.
Compliance Aggregation Area (CAA):
“Compliance Aggregation Area” or “CAA” shall mean a geographic area of Zones or sub-Zones
that are electrically-contiguous and experience for the relevant Delivery Year, based on Resource
Clearing Prices of, for Delivery Years through May 31, 2018, Annual Resources and for the
2018/2019 Delivery Year and subsequent Delivery Years, Capacity Performance Resources, the
same locational price separation in the Base Residual Auction, the same locational price
separation in the First Incremental Auction, the same locational price separation in the Second
Incremental Auction, the same locational price separation in the Third Incremental Auction.
Component DER:
“Component DER” shall mean any resource, within the PJM Region, that is located on a
distribution system, any subsystem thereof, or behind a customer meter, and is used in a DER
Aggregation Resource by a DER Aggregator to participate in the energy, capacity, and/or
ancillary services markets of PJM through the DER Aggregator Participation Model. A
Component DER may not exceed 5 MW.
Composite Energy Offer:
“Composite Energy Offer” for generation resources shall mean the sum (in $/MWh) of the
Incremental Energy Offer and amortized Start-Up Costs and amortized No-load Costs, and for
Economic Load Response Participant resources the sum (in $/MWh) of the Incremental Energy
Offer and amortized shutdown costs, as determined in accordance with Tariff, Attachment K-
Appendix, section 2.4 and Tariff, Attachment K-Appendix, section 2.4A and the PJM Manuals.
Conditional Incremental Auction:
“Conditional Incremental Auction” shall mean an Incremental Auction conducted for a Delivery
Year if and when necessary to secure commitments of additional capacity to address reliability
criteria violations arising from the delay in a Backbone Transmission upgrade that was modeled
in the Base Residual Auction for such Delivery Year.
Conditioned State Support:
“Conditioned State Support” shall mean any financial benefit required or incentivized by a state,
or political subdivision of a state acting in its sovereign capacity, that is provided outside of PJM
Markets and in exchange for the sale of a FERC-jurisdictional product conditioned on clearing in
any RPM Auction, where “conditioned on clearing in any RPM Auction” refers to specific
directives as to the level of the offer that must be entered for the relevant Generation Capacity
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Resource in the RPM Auction or directives that the Generation Capacity Resource is required to
clear in any RPM Auction. Conditioned State Support shall not include any Legacy Policy.
CONE Area:
“CONE Area” shall mean the areas listed in Tariff, Attachment DD, section 5.10(a)(iv)(A) and
any LDAs established as CONE Areas pursuant to Tariff, Attachment DD, section
5.10(a)(iv)(B).
Confidential Information:
“Confidential Information” shall mean any confidential, proprietary, or trade secret information
of a plan, specification, pattern, procedure, design, device, list, concept, policy, or compilation
relating to the present or planned business of a New Service Customer, Transmission Owner, or
other Interconnection Party or Construction Party, which is designated as confidential by the
party supplying the information, whether conveyed verbally, electronically, in writing, through
inspection, or otherwise, and shall include, without limitation, all information relating to the
producing party’s technology, research and development, business affairs and pricing, and any
information supplied by any New Service Customer, Transmission Owner, or other
Interconnection Party or Construction Party to another such party prior to the execution of an
Interconnection Service Agreement or a Construction Service Agreement.
Congestion Price:
“Congestion Price” shall mean the congestion component of the Locational Marginal Price,
which is the effect on transmission congestion costs (whether positive or negative) associated
with increasing the output of a generation resource or decreasing the consumption by a Demand
Resource, based on the effect of increased generation from or consumption by the resource on
transmission line loadings, calculated as specified in Operating Agreement, Schedule 1, section
2, and the parallel provisions of Tariff, Attachment K-Appendix.
Consolidated Transmission Owners Agreement, PJM Transmission Owners Agreement or
Transmission Owners Agreement:
“Consolidated Transmission Owners Agreement,” “PJM Transmission Owners Agreement” or
“Transmission Owners Agreement” shall mean the certain Consolidated Transmission Owners
Agreement dated as of December 15, 2005, by and among the Transmission Owners and by and
between the Transmission Owners and PJM Interconnection, L.L.C. on file with the
Commission, as amended from time to time.
Constraint Relaxation Logic:
“Constraint Relaxation Logic” shall mean the logic applied in the market clearing software
where the transmission limit is increased to prevent the Transmission Constraint Penalty Factor
from setting the Marginal Value of a transmission constraint.
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Constructing Entity:
“Constructing Entity” shall mean either the Transmission Owner or the New Services Customer,
depending on which entity has the construction responsibility pursuant to Tariff, Part VI and the
applicable Construction Service Agreement; this term shall also be used to refer to an
Interconnection Customer with respect to the construction of the Customer Interconnection
Facilities.
Construction Party:
“Construction Party” shall mean a party to a Construction Service Agreement. “Construction
Parties” shall mean all of the Parties to a Construction Service Agreement.
Construction Service Agreement:
“Construction Service Agreement” shall mean either an Interconnection Construction Service
Agreement or an Upgrade Construction Service Agreement.
Contingent Facilities:
“Contingent Facilities” shall mean those unbuilt Interconnection Facilities and Network
Upgrades upon which the Interconnection Request’s costs, timing, and study findings are
dependent and, if delayed or not built, could cause a need for restudies of the Interconnection
Request or a reassessment of the Interconnection Facilities and/or Network Upgrades and/or
costs and timing.
Continuous Mode:
“Continuous Mode” shall mean the mode of operation of an Energy Storage Resource Model
Participant or Open-Loop Hybrid Resource that includes both negative and positive megawatt
quantities (i.e., the Energy Storage Resource Model Participant or Open-Loop Hybrid Resource
is capable of continually and immediately transitioning from withdrawing megawatt quantities
from the grid to injecting megawatt quantities onto the grid or injecting megawatts to
withdrawing megawatts). Energy Storage Resource Model Participants or Open-Loop Hybrid
Resource operating in Continuous Mode are considered to have an unlimited ramp rate.
Continuous Mode requires Discharge Economic Maximum Megawatts to be zero or correspond
to an injection, and Charge Economic Maximum Megawatts to be zero or correspond to a
withdrawal.
Control Area:
“Control Area” shall mean an electric power system or combination of electric power systems
bounded by interconnection metering and telemetry to which a common automatic generation
control scheme is applied in order to:
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(1)
match the power output of the generators within the electric power system(s) and
energy purchased from entities outside the electric power system(s), with the load within the
electric power system(s);
(2)
maintain scheduled interchange with other Control Areas, within the limits of
Good Utility Practice;
(3)
maintain the frequency of the electric power system(s) within reasonable limits in
accordance with Good Utility Practice; and
(4)
provide sufficient generating capacity to maintain operating reserves in
accordance with Good Utility Practice.
Control Zone:
“Control Zone” shall have the meaning given in the Operating Agreement.
Controllable A.C. Merchant Transmission Facilities:
“Controllable A.C. Merchant Transmission Facilities” shall mean transmission facilities that (1)
employ technology which Transmission Provider reviews and verifies will permit control of
the amount and/or direction of power flow on such facilities to such extent as to effectively
enable the controllable facilities to be operated as if they were direct current transmission
facilities, and (2) that are interconnected with the Transmission System pursuant to Tariff, Part
IV and Part VI.
Coordinated External Transaction:
“Coordinated External Transaction” shall mean a transaction to simultaneously purchase and sell
energy on either side of a CTS Enabled Interface in accordance with the procedures of Operating
Agreement, Schedule 1, section 1.13, and the parallel provisions of Tariff, Attachment K-
Appendix.
Coordinated Transaction Scheduling:
“Coordinated Transaction Scheduling” or “CTS” shall mean the scheduling of Coordinated
External Transactions at a CTS Enabled Interface in accordance with the procedures of
Operating Agreement, Schedule 1, section 1.13, and the parallel provisions of Tariff, Attachment
K-Appendix.
Corporate Guaranty:
“Corporate Guaranty” shall mean a legal document, in a form acceptable to PJM and/or
PJMSettlement, used by a Credit Affiliate of an entity to guaranty the obligations of another
entity.
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Cost of New Entry:
“Cost of New Entry” or “CONE” shall mean the nominal levelized cost of a Reference Resource,
as determined in accordance with Tariff, Attachment DD, section 5.
Costs:
As used in Tariff, Part IV, Part VI and related attachments, “Costs” shall mean costs and
expenses, as estimated or calculated, as applicable, including, but not limited to, capital
expenditures, if applicable, and overhead, return, and the costs of financing and taxes and any
Incidental Expenses.
Counterparty:
“Counterparty” shall mean PJMSettlement as the contracting party, in its name and own right
and not as an agent, to an agreement or transaction with a Market Participant or other entities,
including the agreements and transactions with customers regarding transmission service and
other transactions under the PJM Tariff and the Operating Agreement. PJMSettlement shall not
be a counterparty to (i) any bilateral transactions between Members, or (ii) any Member’s self-
supply of energy to serve its load, or (iii) any Member’s self-schedule of energy reported to the
Office of the Interconnection to the extent that energy serves that Member’s own load.
Credit Affiliate:
“Credit Affiliate” shall mean Principals, corporations, partnerships, firms, joint ventures,
associations, joint stock companies, trusts, unincorporated organizations or entities, one of which
directly or indirectly controls the other or that are both under common Control. “Control,” as that
term is used in this definition, shall mean the possession, directly or indirectly, of the power to
direct the management or policies of a person or an entity.
Credit Available for Export Transactions:
“Credit Available for Export Transactions” shall mean a designation of credit to be used for
Export Transactions that is allocated by each Market Participant from its Credit Available for
Virtual Transactions, and which reduces the Market Participant's Credit Available for Virtual
Transactions accordingly.
Credit Available for Virtual Transactions:
“Credit Available for Virtual Transactions” shall mean the Market Participant’s Working Credit
Limit for Virtual Transactions calculated on its credit provided in compliance with its Peak
Market Activity requirement plus available credit submitted above that amount, less any unpaid
billed and unbilled amounts owed to PJMSettlement, plus any unpaid unbilled amounts owed by
PJMSettlement to the Market Participant, less any applicable credit required for Minimum
Participation Requirements, FTRs, RPM activity, or other credit requirement determinants as
defined in Tariff, Attachment Q.
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Credit Breach:
“Credit Breach” shall mean (a) the failure of a Participant to perform, observe, meet or comply
with any requirements of Tariff, Attachment Q or other provisions of the Agreements, other than
a Financial Default, or (b) a determination by PJM and notice to the Participant that a Participant
represents an unreasonable credit risk to the PJM Markets; that, in either event, has not been
cured or remedied after any required notice has been given and any cure period has elapsed.
Credit-Limited Offer:
“Credit-Limited Offer” shall mean a Sell Offer that is submitted by a Market Participant in an
RPM Auction subject to a maximum credit requirement specified by such Market Participant.
Credit Support Default:
“Credit Support Default,” shall mean (a) the failure of any Guarantor of a Market Participant to
make any payment, or to perform, observe, meet or comply with any provisions of the applicable
Guaranty or Credit Support Document that has not been cured or remedied, after any required
notice has been given and an opportunity to cure (if any) has elapsed, (b) a representation made
or deemed made by a Guarantor in any Credit Support Document that proves to be false,
incorrect or misleading in any material respect when made or deemed made, (c) the failure of a
Guaranty or other Credit Support Document to be in full force and effect prior to the satisfaction
of all obligations of such Participant to PJM, without PJM’s consent, or (d) a Guarantor
repudiating, disaffirming, disclaiming or rejecting, in whole or in part, its obligations under the
Guaranty or challenging the validity of the Guaranty.
Credit Support Document:
“Credit Support Document” shall mean any agreement or instrument in any way guaranteeing or
securing any or all of a Participant’s obligations under the Agreements (including, without
limitation, the provisions of Tariff, Attachment Q), any agreement entered into under, pursuant
to, or in connection with the Agreements or any agreement entered into under, pursuant to, or in
connection with the Agreements and/or any other agreement to which PJM, PJMSettlement and
the Participant are parties, including, without limitation, any Corporate Guaranty, Letter of
Credit, or agreement granting PJM and PJMSettlement a security interest.
Critical Natural Gas Infrastructure:
“Critical Natural Gas Infrastructure” shall mean locations with electrical loads that are involved
in natural gas production, processing, intrastate and interstate transmission and distribution
pipeline facility as defined by NERC/FERC standard(s); and until such NERC/FERC standard(s)
is developed, is defined as electric loads that are involved in natural gas production, processing,
intrastate and interstate transmission and distribution pipeline facility, which if curtailed, will
impact the delivery of natural gas to bulk-power system natural gas-fired generation.
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Cross-Border:
When used to describe Network Integration Transmission Service, Network External Designated
Transmission Service or Point-to-Point Transmission Service, “Cross-Border” shall mean
transmission service where the capacity and/or energy is delivered from a resource that is not
part of the PJM Transmission System and/or to load that is not part of the PJM Transmission
System.
CTS Enabled Interface:
“CTS Enabled Interface” shall mean an interface between the PJM Control Area and an adjacent
Control Area at which the Office of the Interconnection has authorized the use of Coordinated
Transaction Scheduling (“CTS”). The CTS Enabled Interfaces between the PJM Control Area
and the New York Independent System Operator, Inc. Control Area shall be designated in
Schedule A to the Joint Operating Agreement Among and Between New York Independent
System Operator Inc. and PJM Interconnection, L.L.C. (PJM Rate Schedule FERC No. 45). The
CTS Enabled Interfaces between the PJM Control Area and the Midcontinent Independent
System Operator, Inc. shall be designated consistent with Attachment 3, section 2 of the Joint
Operating Agreement between Midcontinent Independent System Operator, Inc. and PJM
Interconnection, L.L.C.
CTS Interface Bid:
“CTS Interface Bid” shall mean a unified real-time bid to simultaneously purchase and sell
energy on either side of a CTS Enabled Interface in accordance with the procedures of Operating
Agreement, Schedule 1, section 1.13, and the parallel provisions of Tariff, Attachment K-
Appendix.
Curtailment:
“Curtailment” shall mean a reduction in firm or non-firm transmission service in response to a
transfer capability shortage as a result of system reliability conditions.
Curtailment Service Provider:
“Curtailment Service Provider” or “CSP” shall mean a Member or a Special Member, which
action on behalf of itself or one or more other Members or non-Members, participates in the PJM
Interchange Energy Market, Ancillary Services markets, and/or Reliability Pricing Model by
causing a reduction in demand.
Customer Facility:
“Customer Facility” shall mean Generation Facilities or Merchant Transmission Facilities
interconnected with or added to the Transmission System pursuant to an Interconnection Request
under Subparts A of Tariff, Part IV.
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Customer-Funded Upgrade:
“Customer-Funded Upgrade” shall mean any Network Upgrade, Local Upgrade, or Merchant
Network Upgrade for which cost responsibility (i) is imposed on an Interconnection Customer or
an Eligible Customer pursuant to Tariff, Part VI, section 217, or (ii) is voluntarily undertaken by
a New Service Customer in fulfillment of an Upgrade Request. No Network Upgrade, Local
Upgrade or Merchant Network Upgrade or other transmission expansion or enhancement shall be
a Customer-Funded Upgrade if and to the extent that the costs thereof are included in the rate
base of a public utility on which a regulated return is earned.
Customer Interconnection Facilities:
“Customer Interconnection Facilities” shall mean all facilities and equipment owned and/or
controlled, operated and maintained by Interconnection Customer on Interconnection Customer’s
side of the Point of Interconnection identified in the appropriate appendices to the
Interconnection Service Agreement and to the Interconnection Construction Service Agreement,
including any modifications, additions, or upgrades made to such facilities and equipment, that
are necessary to physically and electrically interconnect the Customer Facility with the
Transmission System.
Daily Deficiency Rate:
“Daily Deficiency Rate” shall mean the rate employed to assess certain deficiency charges as
detailed under Tariff, Attachment DD, section 7.
Daily Unforced Capacity Obligation:
“Daily Unforced Capacity Obligation” shall mean the capacity obligation of a Load Serving
Entity during the Delivery Year, determined in accordance with Reliability Assurance
Agreement, Schedule 8, or, as to an FRR entity, in Reliability Assurance Agreement, Schedule
8.1.
Day-ahead Congestion Price:
“Day-ahead Congestion Price” shall mean the Congestion Price resulting from the Day-ahead
Energy Market.
Day-ahead Energy Market:
“Day-ahead Energy Market” shall mean the schedule of commitments for the purchase or sale of
energy and payment of Transmission Congestion Charges developed by the Office of the
Interconnection as a result of the offers and specifications submitted in accordance with
Operating Agreement, Schedule 1, section 1.10 and the parallel provisions of Tariff, Attachment
K-Appendix.
Day-ahead Energy Market Injection Congestion Credits:
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“Day-ahead Energy Market Injection Congestion Credits” shall mean those congestion credits
paid to Market Participants for supply transactions in the Day-ahead Energy Market including
generation schedules, Increment Offers, Up-to Congestion Transactions, import transactions, and
Day-Ahead Pseudo-Tie Transactions.
Day-ahead Energy Market Transmission Congestion Charges:
“Day-ahead Energy Market Transmission Congestion Charges” shall be equal to the sum of Day-
ahead Energy Market Withdrawal Congestion Charges minus [the sum of Day-ahead Energy
Market Injection Congestion Credits plus any congestion charges calculated pursuant to the Joint
Operating Agreement between the Midcontinent Independent Transmission System Operator,
Inc. and PJM Interconnection, L.L.C. (PJM Rate Schedule FERC No. 38), plus any congestion
charges calculated pursuant to the Joint Operating Agreement Among and Between New York
Independent System Operator Inc. and PJM Interconnection, L.L.C. (PJM Rate Schedule FERC
No. 45), plus any congestion charges calculated pursuant to agreements between the Office of
the Interconnection and other entities, as applicable)].
Day-ahead Energy Market Withdrawal Congestion Charges:
“Day-ahead Energy Market Withdrawal Congestion Charges” shall mean those congestion
charges collected from Market Participants for withdrawal transactions in the Day-ahead Energy
Market from transactions including Demand Bids, Decrement Bids, Up-to Congestion
Transactions, Export Transactions, and Day-Ahead Pseudo-Tie Transactions.
Day-ahead Loss Price:
“Day-ahead Loss Price” shall mean the Loss Price resulting from the Day-ahead Energy Market.
Day-ahead Prices:
“Day-ahead Prices” shall mean the Locational Marginal Prices resulting from the Day-ahead
Energy Market.
Day-Ahead Pseudo-Tie Transaction:
“Day-Ahead Pseudo-Tie Transaction” shall mean a transaction scheduled in the Day-ahead
Energy Market to the PJM-MISO interface from a generator within the PJM balancing authority
area that Pseudo-Ties into the MISO balancing authority area.
Day-ahead Settlement Interval:
“Day-ahead Settlement Interval” shall mean the interval used by settlements, which shall be
every one clock hour.
Day-ahead State of Charge:
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“Day-ahead State of Charge” shall mean the prospective State of Charge of an Energy Storage
Resource Model Participant as offered into the Day-ahead Energy Market according to the
procedures described in the PJM Manuals, measured in units of megawatt-hours. Day-ahead
State of Charge for an interval represents the State of Charge at the beginning of that interval.
Day-ahead System Energy Price:
“Day-ahead System Energy Price” shall mean the System Energy Price resulting from the Day-
ahead Energy Market.
Deactivation:
“Deactivation” shall mean the retirement or mothballing of a generating unit governed by Tariff,
Part V.
Deactivation Avoidable Cost Credit:
“Deactivation Avoidable Cost Credit” shall mean the credit paid to Generation Owners pursuant
to Tariff, Part V, section 114.
Deactivation Avoidable Cost Rate:
“Deactivation Avoidable Cost Rate” shall mean the formula rate established pursuant to Tariff,
Part V, section 115 of this Tariff.
Deactivation Date:
“Deactivation Date” shall mean the date a generating unit within the PJM Region is either retired
or mothballed and ceases to operate.
Decrement Bid:
“Decrement Bid” shall mean a type of Virtual Transaction that is a bid to purchase energy at a
specified location in the Day-ahead Energy Market. A cleared Decrement Bid results in
scheduled load at the specified location in the Day-ahead Energy Market.
Default:
As used in the Interconnection Service Agreement and Construction Service Agreement,
“Default” shall mean the failure of a Breaching Party to cure its Breach in accordance with the
applicable provisions of an Interconnection Service Agreement or Construction Service
Agreement.
Delivering Party:
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“Delivering Party” shall mean the entity supplying capacity and energy to be transmitted at
Point(s) of Receipt.
Delivery Year:
“Delivery Year” shall mean the Planning Period for which a Capacity Resource is committed
pursuant to the auction procedures specified in Tariff, Attachment DD, or pursuant to an FRR
Capacity Plan under Reliability Assurance Agreement, Schedule 8.1.
Demand Bid:
“Demand Bid” shall mean a bid, submitted by a Load Serving Entity in the Day-ahead Energy
Market, to purchase energy at its contracted load location, for a specified timeframe and
megawatt quantity, that if cleared will result in energy being scheduled at the specified location
in the Day-ahead Energy Market and in the physical transfer of energy during the relevant
Operating Day.
Demand Bid Limit:
“Demand Bid Limit” shall mean the largest MW volume of Demand Bids that may be submitted
by a Load Serving Entity for any hour of an Operating Day, as determined pursuant to Operating
Agreement, Schedule 1, section 1.10.1B, and the parallel provisions of Tariff, Attachment K-
Appendix.
Demand Bid Screening:
“Demand Bid Screening” shall mean the process by which Demand Bids are reviewed against
the applicable Demand Bid Limit, and rejected if they would exceed that limit, as determined
pursuant to Operating Agreement, Schedule 1, section 1.10.1B, and the parallel provisions of
Tariff, Attachment K-Appendix.
DER Aggregation Resource:
“DER Aggregation Resource” shall be comprised of one or more Component DER. A DER
Aggregation Resource is used by a DER Aggregator to participate: (1) in the energy, capacity,
and/or ancillary services markets of PJM; or (2) in the Reliability Backstop Procurement as an
RBP Resource to the extent the DER Aggregation Resource meets the requirements set forth in
Tariff, Attachment, DD, section 18.5(d), through the DER Aggregator Participation Model. A
DER Aggregation Resource is capable of satisfying a minimum energy and/or ancillary services
market offer of 100 kW. The market participation eligibility of a DER Aggregation Resource
shall be determined in accordance with the physical and operational characteristics of the
underlying Component DER that comprise the DER Aggregation Resource.
DER Aggregator:
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“DER Aggregator” shall mean an entity that is a Market Participant that: (i) uses one or more
DER Aggregation Resources to participate in the energy, capacity, and/or ancillary services
markets of PJM through the DER Aggregator Participation Model; and (ii) has a fully-executed
DER Aggregator Participation Service Agreement.
DER Aggregator Participation Model:
“DER Aggregator Participation Model” shall mean the participation model described in Tariff,
Attachment K-Appendix, section 1.4B.
DER Capacity Aggregation Resource:
“DER Capacity Aggregation Resource” shall mean one or more DER Aggregation Resource that
participates in the Reliability Pricing Model, capable of satisfying a minimum capacity market
offer of 100 kW, or is otherwise treated as capacity in PJM’s markets, such as through a Fixed
Resource Requirement Capacity Plan, for the 2028/2029 Delivery Year and all subsequent
Delivery Years.
Designated Agent:
“Designated Agent” shall mean any entity that performs actions or functions on behalf of the
Transmission Provider, a Transmission Owner, an Eligible Customer, or the Transmission
Customer required under the Tariff.
Designated Entity:
“Designated Entity” shall have the same meaning provided in the Operating Agreement.
Direct Assignment Facilities:
“Direct Assignment Facilities” shall mean facilities or portions of facilities that are constructed
for the sole use/benefit of a particular Transmission Customer requesting service under the
Tariff. Direct Assignment Facilities shall be specified in the Service Agreement that governs
service to the Transmission Customer and shall be subject to Commission approval.
Direct Charging Energy:
“Direct Charging Energy” shall mean the energy that an Energy Storage Resource or Open-Loop
Hybrid Resource purchases from the PJM Interchange Energy Market and (i) later resells to the
PJM Interchange Energy Market; or (ii) is lost to conversion inefficiencies, provided that such
inefficiencies are an unavoidable component of the conversion, storage, and discharge process
that is used to resell energy back to the PJM Interchange Energy Market.
Direct Load Control:
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“Direct Load Control” shall mean load reduction that is controlled directly by the Curtailment
Service Provider’s market operations center or its agent, in response to PJM instructions.
Discharge Economic Maximum Megawatts:
“Discharge Economic Maximum Megawatts” shall mean the maximum megawatt power output
available for discharge in economic dispatch by an Energy Storage Resource Model Participant
or Open-Loop Hybrid Resource in Continuous Mode or in Discharge Mode. Discharge
Economic Maximum Megawatts shall be the Economic Maximum for an Energy Storage
Resource or Open-Loop Hybrid Resource in Discharge Mode or in Continuous Mode.
Discharge Economic Minimum Megawatts:
“Discharge Economic Minimum Megawatts” shall mean the minimum megawatt power output
available for discharge in economic dispatch by an Energy Storage Resource Model Participant
or Open-Loop Hybrid Resource in Discharge Mode. Discharge Economic Minimum Megawatts
shall be the Economic Minimum for an Energy Storage Resource or Open-Loop Hybrid
Resource in Discharge Mode.
Discharge Mode:
“Discharge Mode” shall mean the mode of operation of an Energy Storage Resource Model
Participant or Open-Loop Hybrid Resource that only includes positive megawatt quantities (i.e.,
the Energy Storage Resource Model Participant or Open-Loop Hybrid Resource is only injecting
megawatts onto the grid).
Discharge Ramp Rate:
“Discharge Ramp Rate” shall mean the Ramping Capability of an Energy Storage Resource
Model Participant or Open-Loop Hybrid Resource in Discharge Mode.
Dispatch Rate:
“Dispatch Rate” shall mean the control signal, expressed in dollars per megawatt-hour,
calculated and transmitted continuously and dynamically to direct the output level of all
generation resources dispatched by the Office of the Interconnection in accordance with the
Offer Data.
Dispatched Charging Energy:
“Dispatched Charging Energy” shall mean Direct Charging Energy that an Energy Storage
Resource Model Participant or Open-Loop Hybrid Resource receives from the electric grid
pursuant to PJM dispatch while providing one of the following services in the PJM markets:
Energy Imbalance Service pursuant to Tariff, Schedule 4; Regulation; Tier 2 Synchronized
Reserves; or Reactive Service. Energy Storage Resource Model Participants and Open-Loop
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Hybrid Resource shall be considered to be providing Energy Imbalance Service when they are
dispatchable by PJM in real-time.
Dynamic Schedule:
“Dynamic Schedule” shall have the same meaning provided in the Operating Agreement.
Dynamic Transfer:
“Dynamic Transfer” shall have the same meaning provided in the Operating Agreement.
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Definitions – E - F
Economic-based Enhancement or Expansion:
“Economic-based Enhancement or Expansion” shall have the same meaning provided in the
Operating Agreement.
Economic Load Response Participant:
“Economic Load Response Participant” shall mean a Member or Special Member that qualifies
under Operating Agreement, Schedule 1, section 1.5A, and the parallel provisions of Tariff,
Attachment K-Appendix, section 1.5A, to participate in the PJM Interchange Energy Market
and/or Ancillary Services markets through reductions in demand.
Economic Load Response Regulation Only Participant:
“Economic Load Response Regulation Only Participant” shall mean a Member or Special
Member that qualifies under Operating Agreement, Schedule 1, section 1.5A, and the parallel
provisions of Tariff, Attachment K-Appendix, section 1.5A, and is only eligible to participate in
the PJM Regulation market.
Economic Maximum:
“Economic Maximum” shall mean the highest incremental MW output level, submitted to PJM
market systems by a Market Participant, that a unit can achieve while following economic
dispatch.
Economic Minimum:
“Economic Minimum” shall mean the lowest incremental MW output level, submitted to PJM
market systems by a Market Participant, that a unit can achieve while following economic
dispatch.
Effective FTR Holder:
“Effective FTR Holder” shall mean:
(i) For an FTR Holder that is either a (a) privately held company, or (b) a municipality or
electric cooperative, as defined in the Federal Power Act, such FTR Holder, together with
any Affiliate, subsidiary or parent of the FTR Holder, any other entity that is under common
ownership, wholly or partly, directly or indirectly, or has the ability to influence, directly or
indirectly, the management or policies of the FTR Holder; or
(ii) For an FTR Holder that is a publicly traded company including a wholly owned
subsidiary of a publicly traded company, such FTR Holder, together with any Affiliate,
subsidiary or parent of the FTR Holder, any other PJM Member has over 10% common
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ownership with the FTR Holder, wholly or partly, directly or indirectly, or has the ability to
influence, directly or indirectly, the management or policies of the FTR Holder; or
(iii) an FTR Holder together with any other PJM Member, including also any Affiliate,
subsidiary or parent of such other PJM Member, with which it shares common ownership,
wholly or partly, directly or indirectly, in any third entity which is a PJM Member (e.g., a
joint venture).
EFORd:
“EFORd” shall have the meaning specified in the PJM Reliability Assurance Agreement.
Electrical Distance:
“Electrical Distance” shall mean, for a Generation Capacity Resource geographically located
outside the metered boundaries of the PJM Region, the measure of distance, based on impedance
and in accordance with the PJM Manuals, from the Generation Capacity Resource to the PJM
Region.
Eligible Customer:
“Eligible Customer” shall mean:
(i) Any electric utility (including any Transmission Owner and any power marketer), Federal
power marketing agency, or any person generating electric energy for sale for resale is an
Eligible Customer under the Tariff. Electric energy sold or produced by such entity may be
electric energy produced in the United States, Canada or Mexico. However, with respect to
transmission service that the Commission is prohibited from ordering by Section 212(h) of the
Federal Power Act, such entity is eligible only if the service is provided pursuant to a state
requirement that the Transmission Provider or Transmission Owner offer the unbundled
transmission service, or pursuant to a voluntary offer of such service by a Transmission Owner.
(ii) Any retail customer taking unbundled transmission service pursuant to a state requirement
that the Transmission Provider or a Transmission Owner offer the transmission service, or
pursuant to a voluntary offer of such service by a Transmission Owner, is an Eligible Customer
under the Tariff. As used in Tariff, Part VI, Eligible Customer shall mean only those Eligible
Customers that have submitted a Completed Application.
Eligible Fast-Start Resource:
“Eligible Fast-Start Resource” shall mean a Fast-Start Resource that is eligible for the
application of Integer Relaxation during the calculation of Locational Marginal Prices as set
forth in Tariff, Attachment K-Appendix, section 2.2.
Emergency Action:
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“Emergency Action” shall mean (1) any megawatt shortage of the Primary Reserve Requirement
(as specified in the PJM Manuals) in a Reserve Zone or Reserve Sub-zone, inclusive of any
adjustments to such requirement to account for system conditions, as determined by the dispatch
run from the security constrained economic dispatch and where, as specified in the PJM
Manuals, there is also a Voltage Reduction Warning and reduction of non-critical plant load,
Manual Load Dump Warning, Maximum Generation Emergency Action, or the curtailment of
non-essential building loads and Voltage Reduction Warning that encompasses such Reserve
Zone or Reserve Sub-zone or (2) anytime the Office of Interconnection identifies an emergency
and issues a load shed directive, Manual Load Dump Action, Voltage Reduction Action, or
deploy all resources action for an entire Reserve Zone or Reserve Sub-zone.
Emergency Condition:
“Emergency Condition” shall mean a condition or situation (i) that in the judgment of any
Interconnection Party is imminently likely to endanger life or property; or (ii) that in the
judgment of the Interconnected Transmission Owner or Transmission Provider is imminently
likely (as determined in a non-discriminatory manner) to cause a material adverse effect on the
security of, or damage to, the Transmission System, the Interconnection Facilities, or the
transmission systems or distribution systems to which the Transmission System is directly or
indirectly connected; or (iii) that in the judgment of Interconnection Customer is imminently
likely (as determined in a non-discriminatory manner) to cause damage to the Customer Facility
or to the Customer Interconnection Facilities. System restoration and black start shall be
considered Emergency Conditions, provided that a Generation Interconnection Customer is not
obligated by an Interconnection Service Agreement to possess black start capability. Any
condition or situation that results from lack of sufficient generating capacity to meet load
requirements or that results solely from economic conditions shall not constitute an Emergency
Condition, unless one or more of the enumerated conditions or situations identified in this
definition also exists.
Emergency Load Response Program:
“Emergency Load Response Program” shall mean the program by which Curtailment Service
Providers may be compensated by PJM for Demand Resources that will reduce load when
dispatched by PJM during emergency conditions, and is described in Operating Agreement,
Schedule 1, section 8 and the parallel provisions of Tariff, Attachment K-Appendix, section 8.
Energy Efficiency Resource:
“Energy Efficiency Resource” shall have the meaning specified in the PJM Reliability Assurance
Agreement.
Energy Market Opportunity Cost:
“Energy Market Opportunity Cost” shall mean the difference between (a) the forecasted cost to
operate a specific generating unit when the unit only has an operational limitation due to
limitations imposed on the unit by Applicable Laws and Regulations, and (b) the forecasted
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future Locational Marginal Price at which the generating unit could run while not violating such
limitations. Energy Market Opportunity Cost therefore is the value associated with a specific
generating unit’s lost opportunity to produce energy during a higher valued period of time
occurring within the same compliance period, which compliance period is determined by the
applicable regulatory authority and is reflected in the rules set forth in PJM Manual 15. Energy
Market Opportunity Costs shall be limited to those resources which are specifically delineated in
Operating Agreement, Schedule 2.
Energy Resource:
“Energy Resource” shall mean a Generating Facility that is not a Capacity Resource.
Energy Settlement Area:
“Energy Settlement Area” shall mean the bus or distribution of busses that represents the
physical location of Network Load and by which the obligations of the Network Customer to
PJM are settled.
Energy Storage Resource:
“Energy Storage Resource” shall mean a resource capable of receiving electric energy from the
grid and storing it for later injection to the grid that (1) participates in the PJM Energy, Capacity
and/or Ancillary Services markets as a Market Participant; or (2) may be an RBP Resource to the
extent that the Energy Storage Resource meets the requirements set forth in Tariff, Attachment
DD, section 18.5(b). Open-Loop Hybrid Resources are not
Energy Storage Resources.
Energy Storage Resource Model Participant:
“Energy Storage Resource Model Participant” shall mean an Energy Storage Resource utilizing
the Energy Storage Resource Participation Model.
Energy Storage Resource Participation Model:
“Energy Storage Resource Participation Model” shall mean the participation model accepted by
the Commission in Docket No. ER19-469-000.
Energy Transmission Injection Rights:
“Energy Transmission Injection Rights” shall mean the rights to schedule energy deliveries at a
specified point on the Transmission System. Energy Transmission Injection Rights may be
awarded only to a Merchant D.C. Transmission Facility that connects the Transmission System
to another control area. Deliveries scheduled using Energy Transmission Injection Rights have
rights similar to those under Non-Firm Point-to-Point Transmission Service.
Entity Providing Supply Services to Default Retail Service Provider:
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“Entity Providing Supply Services to Default Retail Service Provider” shall mean any entity,
including but not limited to a load aggregator or power marketer, providing supply services to an
electric distribution company when that electric distribution company is serving as the default
retail service provider, and that enters into a contract or similar obligation with such electric
distribution company to serve retail customers who have not selected a competitive retail service
provider.
Environmental Laws:
“Environmental Laws” shall mean applicable Laws or Regulations relating to pollution or
protection of the environment, natural resources or human health and safety.
Environmentally-Limited Resource:
“Environmentally-Limited Resource” shall mean a resource which has a limit on its run hours
imposed by a federal, state, or other governmental agency that will significantly limit its
availability, on either a temporary or long-term basis. This includes a resource that is limited by a
governmental authority to operating only during declared PJM capacity emergencies.
Equivalent Load:
“Equivalent Load” shall mean the sum of a Market Participant’s net system requirements to
serve its customer load in the PJM Region, if any, plus its net bilateral transactions.
Event of Default:
“Event of Default,” as that term is used in Tariff, Attachment Q, shall mean a Financial Default,
Credit Breach, or Credit Support Default.
Exercise of Buyer-Side Market Power:
“Exercise of Buyer-Side Market Power” shall mean anti-competitive behavior of a Capacity
Market Seller with a Load Interest, or directed by an entity with a Load Interest, to
uneconomically lower RPM Auction Sell Offer(s) in order to suppress RPM Auction clearing
prices for the overall benefit of the Capacity Market Seller’s (and/or affiliates of Capacity
Market Seller) portfolio of generation and load or that of the directing entity with a Load Interest
as determined pursuant to Tariff, Attachment DD, section 5.14(h-2)(2)(B). A bilateral contract
between the Capacity Market Seller and an entity with a Load Interest with the express purpose
of lowering capacity market clearing prices shall be evidence of the Exercise of Buyer-Side
Market Power.
Existing Generation Capacity Resource:
“Existing Generation Capacity Resource” shall have the meaning specified in the Reliability
Assurance Agreement.
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Export Credit Exposure:
“Export Credit Exposure” is determined for each Market Participant for a given Operating Day,
and shall mean the sum of credit exposures for the Market Participant’s Export Transactions for
that Operating Day and for the preceding Operating Day.
Export Nodal Reference Price:
“Export Nodal Reference Price” at each location is the 97th percentile, shall be, the real-time
hourly integrated price experienced over the corresponding two-month period in the preceding
calendar year, calculated separately for peak and off-peak time periods. The two-month time
periods used in this calculation shall be January and February, March and April, May and June,
July and August, September and October, and November and December.
Export Transaction:
“Export Transaction” shall be a transaction by a Market Participant that results in the transfer of
energy from within the PJM Control Area to outside the PJM Control Area. Coordinated
External Transactions that result in the transfer of energy from the PJM Control Area to an
adjacent Control Area are one form of Export Transaction.
Export Transaction Price Factor:
“Export Transaction Price Factor” for a prospective time interval shall be the greater of (i) PJM’s
forecast price for the time interval, if available, or (ii) the Export Nodal Reference Price, but
shall not exceed the Export Transaction’s dispatch ceiling price cap, if any, for that time interval.
The Export Transaction Price Factor for a past time interval shall be calculated in the same
manner as for a prospective time interval, except that the Export Transaction Price Factor may
use a tentative or final settlement price, as available. If an Export Nodal Reference Price is not
available for a particular time interval, PJM may use an Export Transaction Price Factor for that
time interval based on an appropriate alternate reference price.
Export Transaction Screening:
“Export Transaction Screening” shall be the process PJM uses to review the Export Credit
Exposure of Export Transactions against the Credit Available for Export Transactions, and deny
or curtail all or a portion of an Export Transaction, if the credit required for such transactions is
greater than the credit available for the transactions.
Export Transactions Net Activity:
“Export Transactions Net Activity” shall mean the aggregate net total, resulting from Export
Transactions, of (i) Spot Market Energy charges, (ii) Transmission Congestion Charges, and (iii)
Transmission Loss Charges, calculated as set forth in Operating Agreement, Schedule 1 and the
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parallel provisions of Tariff, Attachment K-Appendix. Export Transactions Net Activity may be
positive or negative.
Extended Primary Reserve Requirement:
“Extended Primary Reserve Requirement” shall equal the Primary Reserve Requirement in a
Reserve Zone or Reserve Sub-zone, plus 190 MW, plus any additional reserves scheduled under
emergency conditions necessary to address operational uncertainty. The Extended Primary
Reserve Requirement is calculated in accordance with the PJM Manuals.
Extended Synchronized Reserve Requirement:
“Extended Synchronized Reserve Requirement” shall equal the Synchronized Reserve
Requirement in a Reserve Zone or Reserve Sub-zone, plus 190 MW, plus any additional reserves
scheduled under emergency conditions necessary to address operational uncertainty. The
Extended Synchronized Reserve Requirement is calculated in accordance with the PJM Manuals.
Extended 30-minute Reserve Requirement:
“Extended 30-minute Reserve Requirement” shall equal the 30-minute Reserve Requirement in a
Reserve Zone or Reserve Sub-zone, plus 190 MW, plus any additional reserves scheduled under
emergency conditions necessary to address operational uncertainty. The Extended 30-minute
Reserve Requirement is calculated in accordance with the PJM Manuals.
External Market Buyer:
“External Market Buyer” shall mean a Market Buyer making purchases of energy from the PJM
Interchange Energy Market for consumption by end-users outside the PJM Region, or for load in
the PJM Region that is not served by Network Transmission Service.
External Resource:
“External Resource” shall mean a generation resource located outside the metered boundaries of
the PJM Region.
Facilities Study:
“Facilities Study” shall be an engineering study conducted by the Transmission Provider (in
coordination with the affected Transmission Owner(s)) to: (1) determine the required
modifications to the Transmission Provider’s Transmission System necessary to implement the
conclusions of the System Impact Study; and (2) complete any additional studies or analyses
documented in the System Impact Study or required by PJM Manuals, and determine the
required modifications to the Transmission Provider’s Transmission System based on the
conclusions of such additional studies. The Facilities Study shall include the cost and scheduled
completion date for such modifications, that will be required to provide the requested
transmission service or to accommodate a New Service Request. As used in the Interconnection
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Service Agreement or Construction Service Agreement, Facilities Study shall mean that certain
Facilities Study conducted by Transmission Provider (or at its direction) to determine the design
and specification of the Customer Funded Upgrades necessary to accommodate the New Service
Customer’s New Service Request in accordance with Tariff, Part VI, section 207.
Fast-Start Resource:
“Fast-Start Resource” shall have the meaning set forth in Tariff, Attachment K-Appendix,
section 2.2A
Federal Power Act:
“Federal Power Act” shall mean the Federal Power Act, as amended, 16 U.S.C. §§ 791a, et seq.
FERC or Commission:
“FERC” or “Commission” shall mean the Federal Energy Regulatory Commission or any
successor federal agency, commission or department exercising jurisdiction over the Tariff,
Operating Agreement and Reliability Assurance Agreement.
FERC Market Rules:
“FERC Market Rules” mean the market behavior rules and the prohibition against electric
energy market manipulation codified by the Commission in its Rules and Regulations at 18 CFR
§§ 1c.2 and 35.37, respectively; the Commission-approved PJM Market Rules and any related
proscriptions or any successor rules that the Commission from time to time may issue, approve
or otherwise establish.
Final Offer:
“Final Offer” shall mean the offer on which a resource was dispatched by the Office of the
Interconnection for a particular clock hour for the Operating Day.
Final RTO Unforced Capacity Obligation:
“Final RTO Unforced Capacity Obligation” shall mean the capacity obligation for the PJM
Region, determined in accordance with RAA, Schedule 8.
Financial Close:
“Financial Close” shall mean the Capacity Market Seller has demonstrated that the Capacity
Market Seller or its agent has completed the act of executing the material contracts and/or other
documents necessary to (1) authorize construction of the project and (2) establish the necessary
funding for the project under the control of an independent third-party entity. A sworn, notarized
certification of an independent engineer certifying to such facts, and that the engineer has
personal knowledge of, or has engaged in a diligent inquiry to determine, such facts, shall be
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sufficient to make such demonstration. For resources that do not have external financing,
Financial Close shall mean the project has full funding available, and that the project has been
duly authorized to proceed with full construction of the material portions of the project by the
appropriate governing body of the company funding such project. A sworn, notarized
certification by an officer of such company certifying to such facts, and that the officer has
personal knowledge of, or has engaged in a diligent inquiry to determine, such facts, shall be
sufficient to make such demonstration.
Financial Default:
“Financial Default” shall mean (a) the failure of a Member or Transmission Customer to make
any payment for obligations under the Agreements when due, including but not limited to an
invoice payment that has not been cured or remedied after notice has been given and any cure
period has elapsed, (b) a bankruptcy proceeding filed by a Member, Transmission Customer or
its Guarantor, or filed against a Member, Transmission Customer or its Guarantor and to which
the Member, Transmission Customer or Guarantor, as applicable, acquiesces or that is not
dismissed within 60 days, (c) a Member, Transmission Customer or its Guarantor, if any, is
unable to meet its financial obligations as they become due, or (d) a Merger Without Assumption
occurs in respect of the Member, Transmission Customer or any Guarantor of such Member or
Transmission Customer.
Financial Transmission Right:
“Financial Transmission Right” or “FTR” shall mean a right to receive Transmission Congestion
Credits as specified in Operating Agreement, Schedule 1, section 5.2.2 and the parallel
provisions of Tariff, Attachment K-Appendix, section 5.2.2.
Financial Transmission Right Obligation:
“Financial Transmission Right Obligation” shall mean a right to receive Transmission
Congestion Credits as specified in Operating Agreement, Schedule 1, section 5.2.2(b), and the
parallel provisions of Tariff, Attachment K-Appendix, section 5.2.2(b).
Financial Transmission Right Option:
“Financial Transmission Right Option” shall mean a right to receive Transmission Congestion
Credits as specified in Operating Agreement, Schedule 1, section 5.2.2(c), and the parallel
provisions of Tariff, Attachment K-Appendix, section 5.2.2(c).
Firm Point-To-Point Transmission Service:
“Firm Point-To-Point Transmission Service” shall mean Transmission Service under the Tariff,
Part II, section 13 that is reserved and/or scheduled between specified Points of Receipt and
Delivery pursuant to Tariff, Part II.
Firm Transmission Feasibility Study:
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“Firm Transmission Feasibility Study” shall mean a study conducted by the Transmission
Provider in accordance with Tariff, Part II, section 19.3 and Tariff, Part III, section 32.3.
Firm Transmission Withdrawal Rights:
“Firm Transmission Withdrawal Rights” shall mean the rights to schedule energy and capacity
withdrawals from a Point of Interconnection of a Merchant Transmission Facility with the
Transmission System. Firm Transmission Withdrawal Rights may be awarded only to a
Merchant D.C. Transmission Facility that connects the Transmission System with another
control area. Withdrawals scheduled using Firm Transmission Withdrawal Rights have rights
similar to those under Firm Point-to-Point Transmission Service.
First Incremental Auction:
“First Incremental Auction” shall mean an Incremental Auction conducted 20 months prior to the
start of the Delivery Year to which it relates.
Flexible Resource:
“Flexible Resource” shall mean a generating resource that must have a combined Start-up Time
and Notification Time of less than or equal to two hours; and a Minimum Run Time of less than
or equal to two hours.
Forecast Pool Requirement:
“Forecast Pool Requirement” shall have the meaning specified in the Reliability Assurance
Agreement.
Foreign Guaranty:
“Foreign Guaranty” shall mean a Corporate Guaranty provided by an Affiliate of a Participant
that is domiciled in a foreign country, and meets all of the provisions of Tariff, Attachment Q.
Form 715 Planning Criteria:
“Form 715 Planning Criteria” shall have the same meaning provided in the Operating
Agreement.
Forward Daily Natural Gas Prices:
“Forward Daily Natural Gas Prices” shall have the meaning provided in Tariff, Attachment DD,
section 5.10(a)(v-1)(E).
Forward Hourly Ancillary Services Prices:
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“Forward Hourly Ancillary Services Prices” shall have the meaning provided in Tariff,
Attachment DD, section 5.10(a)(v-1)(D).
Forward Hourly LMPs:
“Forward Hourly LMPs” shall have the meaning provided in Tariff, Attachment DD, section
5.10(a)(v-1)(C).
FTR Credit Limit:
“FTR Credit Limit” shall mean the amount of credit established with PJMSettlement that an FTR
Participant has specifically designated to be used for FTR activity in a specific customer account.
Any such credit so set aside shall not be considered available to satisfy any other credit
requirement the FTR Participant may have with PJMSettlement.
FTR Credit Requirement:
“FTR Credit Requirement” shall mean the amount of credit that a Participant must provide in
order to support the FTR positions that it holds and/or for which it is bidding. The FTR Credit
Requirement shall not include months for which the invoicing has already been completed,
provided that PJMSettlement shall have up to two Business Days following the date of the
invoice completion to make such adjustments in its credit systems. FTR Credit Requirements
are calculated and applied separately for each separate customer account.
FTR Flow Undiversified:
“FTR Flow Undiversified” shall have the meaning established in Tariff, Attachment Q, section
VI.C.6.
FTR Historical Value:
For each FTR for each month, “FTR Historical Value” shall mean the weighted average of
historical values over three years for the FTR path using the following weightings: 50% - most
recent year; 30% - second year; 20% - third year.
FTR Holder:
“FTR Holder” shall mean the PJM Member that has acquired and possesses an FTR.
FTR Monthly Credit Requirement Contribution:
For each FTR, for each month, ”FTR Monthly Credit Requirement Contribution” shall mean the
total FTR cost for the month, prorated on a daily basis, less the FTR Historical Value for the
month. For cleared FTRs, this contribution may be negative; prior to clearing, FTRs with
negative contribution shall be deemed to have zero contribution.
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FTR Net Activity:
“FTR Net Activity” shall mean the aggregate net value of the billing line items for auction
revenue rights credits, FTR auction charges, FTR auction credits, and FTR congestion credits,
and shall also include day-ahead and balancing/real-time congestion charges up to a maximum
net value of the sum of the foregoing auction revenue rights credits, FTR auction charges, FTR
auction credits and FTR congestion credits.
FTR Participant:
“FTR Participant” shall mean any Market Participant that provides or is required to provide
Collateral in order to participate in PJM’s FTR market.
FTR Portfolio Auction Value:
“FTR Portfolio Auction Value” shall mean for each customer account of a Market Participant,
the sum, calculated on a monthly basis, across all FTRs, of the FTR price times the FTR volume
in MW.
Fuel Cost Policy:
“Fuel Cost Policy” shall mean the document provided by a Market Seller to PJM and the Market
Monitoring Unit in accordance with PJM Manual 15 and Operating Agreement, Schedule 2,
which documents the Market Seller’s method used to price fuel for calculation of the Market
Seller’s cost-based offers for a generation resource.
Full Notice to Proceed:
“Full Notice to Proceed” shall mean that all material third party contractors have been given the
notice to proceed with construction by the Capacity Market Seller or its agent, with a guaranteed
completion date backed by liquidated damages.
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Definitions – O – P - Q
Obligation:
“Obligation” shall mean all amounts owed to PJMSettlement for purchases from the PJM
Markets, Transmission Service, (under both Tariff, Part II and Tariff, Part III), and other services
or obligations pursuant to the Agreements. In addition, aggregate amounts that will be owed to
PJMSettlement in the future for capacity purchases within the PJM capacity markets will be
added to this figure. Should other markets be formed such that Participants may incur future
Obligations in those markets, then the aggregate amount of those Obligations will also be added
to the Net Obligation.
Offer Data:
“Offer Data” shall mean the scheduling, operations planning, dispatch, new resource, and other
data and information necessary to schedule and dispatch generation resources and Demand
Resource(s) for the provision of energy and other services and the maintenance of the reliability
and security of the Transmission System in the PJM Region, and specified for submission to the
PJM Interchange Energy Market for such purposes by the Office of the Interconnection.
Office of the Interconnection:
“Office of the Interconnection” shall mean the employees and agents of PJM Interconnection,
L.L.C. subject to the supervision and oversight of the PJM Board, acting pursuant to the
Operating Agreement.
Office of the Interconnection Control Center:
“Office of the Interconnection Control Center” shall mean the equipment, facilities and
personnel used by the Office of the Interconnection to coordinate and direct the operation of the
PJM Region and to administer the PJM Interchange Energy Market, including facilities and
equipment used to communicate and coordinate with the Market Participants in connection with
transactions in the PJM Interchange Energy Market or the operation of the PJM Region.
On-Site Generators:
“On-Site Generators” shall mean generation facilities or portions of a generation facility
(including Behind The Meter Generation) that (i) are not Generation Capacity Resources, (ii) are
not injecting into the grid for the portion of a generation facility that participates as a Demand
Resource or as an Economic Load Response Participant unless permitted as an Economic Load
Response Regulation Only Participant, (iii) are either synchronized or non-synchronized to the
Transmission System, and (iv) can be used to reduce demand for the purpose of participating in
the PJM Interchange Energy Market.
Open Access Same-Time Information System (OASIS) or PJM Open Access Same-Time
Information System:
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“Open Access Same-Time Information System,” “PJM Open Access Same-Time Information
System” or “OASIS” shall mean the electronic communication and information system and
standards of conduct contained in Part 37 and Part 38 of the Commission’s regulations and all
additional requirements implemented by subsequent Commission orders dealing with OASIS for
the collection and dissemination of information about transmission services in the PJM Region,
established and operated by the Office of the Interconnection in accordance with FERC
standards and requirements.
Open-Loop Hybrid Resource:
“Open-Loop Hybrid Resource” shall mean a Hybrid Resource with a storage component that
operates by charging its storage component from the grid.
Operating Agreement of the PJM Interconnection, L.L.C., Operating Agreement or PJM
Operating Agreement:
“Operating Agreement of the PJM Interconnection, L.L.C.,” “Operating Agreement” or “PJM
Operating Agreement” shall mean the Amended and Restated Operating Agreement of PJM
Interconnection, L.L.C. dated as of April 1, 1997 and as amended and restated as of June 2,
1997, including all Schedules, Exhibits, Appendices, addenda or supplements hereto, as amended
from time to time thereafter, among the Members of the PJM Interconnection, L.L.C., on file
with the Commission.
Operating Day:
“Operating Day” shall mean the daily 24 hour period beginning at midnight for which
transactions on the PJM Interchange Energy Market are scheduled.
Operating Margin:
“Operating Margin” shall mean the incremental adjustments, measured in megawatts, required in
PJM Region operations in order to accommodate, on a first contingency basis, an operating
contingency in the PJM Region resulting from operations in an interconnected Control Area.
Such adjustments may result in constraints causing Transmission Congestion Charges, or may
result in Ancillary Services charges pursuant to the PJM Tariff.
Operating Margin Customer:
“Operating Margin Customer” shall mean a Control Area purchasing Operating Margin pursuant
to an agreement between such other Control Area and the LLC.
Operating Reserve Demand Curve:
“Operating Reserve Demand Curve” shall mean a curve with prices on the y-axis and megawatts
on the x-axis, which defines the relationship between each incremental megawatt of reserves that
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can be used to meet a given reserve requirement.
Operationally Deliverable:
“Operationally Deliverable” shall mean, as determined by the Office of the Interconnection, that
there are no operational conditions, arrangements or limitations experienced or required that
threaten, impair or degrade effectuation or maintenance of deliverability of capacity or energy
from the external Generation Capacity Resource to loads in the PJM Region in a manner
comparable to the deliverability of capacity or energy to such loads from Generation Capacity
Resources located inside the metered boundaries of the PJM Region, including, without
limitation, an identified need by an external Balancing Authority Area for a remedial action
scheme or manual generation trip protocol, transmission facility switching arrangements that
would have the effect of radializing load, or excessive or unacceptable frequency of regional
reliability limit violations or (outside an interregional agreed congestion management process) of
local reliability dispatch instructions and commitments.
Opportunity Cost:
“Opportunity Cost” shall mean a component of the Market Seller Offer Cap calculated in
accordance with Tariff, Attachment DD, section 6.
OPSI Advisory Committee:
“OPSI Advisory Committee” shall mean the committee established under Tariff, Attachment M,
section III.G.
Option to Build:
“Option to Build” shall mean the option of the New Service Customer to build certain Customer-
Funded Upgrades, as set forth in, and subject to the terms of, the Construction Service
Agreement.
Optional Interconnection Study:
“Optional Interconnection Study” shall mean a sensitivity analysis of an Interconnection Request
based on assumptions specified by the Interconnection Customer in the Optional Interconnection
Study Agreement.
Optional Interconnection Study Agreement:
“Optional Interconnection Study Agreement” shall mean the form of agreement for preparation
of an Optional Interconnection Study, as set forth in Tariff, Attachment N-3.
Part I:
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“Part I” shall mean the Tariff Definitions and Common Service Provisions contained in Tariff,
Part I, sections 1 through 12A.
Part II:
“Part II” shall mean Tariff, Part II, sections 13 through 27A pertaining to Point-To-Point
Transmission Service in conjunction with the applicable Common Service Provisions of Tariff,
Part I and appropriate Schedules and Attachments.
Part III:
“Part III” shall mean Tariff, Part III, sections 28 through 35 pertaining to Network Integration
Transmission Service in conjunction with the applicable Common Service Provisions of Tariff,
Part I and appropriate Schedules and Attachments.
Part IV:
“Part IV” shall mean Tariff, Part IV, sections 36 through 112C pertaining to generation or
merchant transmission interconnection to the Transmission System in conjunction with the
applicable Common Service Provisions of Tariff, Part I and appropriate Schedules and
Attachments.
Part V:
“Part V” shall mean Tariff, Part V, sections 113 through 122 pertaining to the deactivation of
generating units in conjunction with the applicable Common Service Provisions of Tariff, Part I
and appropriate Schedules and Attachments.
Part VI:
“Part VI” shall mean Tariff, Part VI, sections 200 through 237 pertaining to the queuing, study,
and agreements relating to New Service Requests, and the rights associated with Customer-
Funded Upgrades in conjunction with the applicable Common Service Provisions of Tariff, Part I
and appropriate Schedules and Attachments.
Participant:
“Participant” shall mean a Market Participant and/or Transmission Customer and/or Applicant
requesting to be an active Market Participant and/or Transmission Customer.
Parties:
“Parties” shall mean the Transmission Provider, as administrator of the Tariff, and the
Transmission Customer receiving service under the Tariff. PJMSettlement shall be the
Counterparty to Transmission Customers.
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Peak-Hour Dispatch:
“Peak-Hour Dispatch” shall mean, for purposes of calculating the Energy and Ancillary Services
Revenue Offset under Tariff, Attachment DD, section 5, an assumption, as more fully set forth in
the PJM Manuals, that the Reference Resource is committed in the Day-ahead Energy Market in
four distinct blocks of four hours of continuous output for each block from the peak-hour period
beginning with the hour ending 0800 EPT through to the hour ending 2300 EPT for any day
when the average day-ahead LMP for the area for which the Net Cost of New Entry is being
determined is greater than, or equal to, the cost to generate (including the cost for a complete
start and shutdown cycle), plus 10% of such costs only for the 2022/2023 Delivery Year, for at
least two hours during each four-hour block, where such blocks shall be assumed to be
committed independently; provided that, if there are not at least two economic hours in any given
four-hour block, then the Reference Resource shall be assumed not to be committed for such
block; and to the extent not committed in any such block in the Day-ahead Energy Market under
the above conditions based on Day-Ahead LMPs, is dispatched in the Real-time Energy Market
for such block if the Real-Time LMP is greater than or equal to the cost to generate, plus 10% of
such costs only for the 2022/2023 Delivery Year, under the same conditions as described above
for the Day-ahead Energy Market.
Peak Market Activity:
“Peak Market Activity” shall mean a measure of exposure for which credit is required, calculated
in accordance with Tariff, Attachment Q, section VII.A.
Peak Market Activity Shortfall:
“Peak Market Activity Shortfall” shall mean, for any given week, the amount by which a
Participant’s current Peak Market Activity exceeds such Participant’s Peak Market Activity
credit requirement from the prior week.
Peak Market Activity Surplus:
“Peak Market Activity Surplus” shall mean, for any given week, the amount by which a
Participant’s Peak Market Activity credit requirement from the prior week exceeds such
Participant’s current Peak Market Activity.
Peak Season:
“Peak Season” shall mean the weeks containing the 24th through 36th Wednesdays of the
calendar year. Each such week shall begin on a Monday and end on the following Sunday,
except for the week containing the 36th Wednesday, which shall end on the following Friday.
Percentage Internal Resources Required:
“Percentage Internal Resources Required” shall have the meaning specified in the Reliability
Assurance Agreement.
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Performance Assessment Interval:
“Performance Assessment Interval” shall mean each Real-time Settlement Interval for which an
Emergency Action has been declared by the Office of the Interconnection, provided, however,
that Performance Assessment Intervals for a Base Capacity Resource shall not include any
intervals outside the calendar months of June through September.
Permissible Technological Advancement:
“Permissible Technological Advancement” shall mean a proposed technological change such as
an advancement to turbines, inverters, plant supervisory controls or other similar advancements
to the technology proposed in the Interconnection Request that is submitted to the Transmission
Provider no later than the return of an executed Facilities Study Agreement (or, if a Facilities
Study is not required, prior to the return of an executed Interconnection Service Agreement).
Provided such change may not: (i) increase the capability of the Generating Facility as specified
in the original Interconnection Request; (ii) represent a different fuel type from the original
Interconnection Request; or (iii) cause any material adverse impact(s) on the Transmission
System with regard to short circuit capability limits, steady-state thermal and voltage limits, or
dynamic system stability and response. If the proposed technological advancement is a
Permissible Technological Advancement, no additional study will be necessary and the proposed
technological advancement will not be considered a Material Modification.
PJM:
“PJM” shall mean PJM Interconnection, L.L.C., including the Office of the Interconnection as
referenced in the PJM Operating Agreement. When such term is being used in the RAA it shall
also include the PJM Board.
PJM Administrative Service:
“PJM Administrative Service” shall mean the services provided by PJM pursuant to Tariff,
Schedule 9.
PJM Board:
“PJM Board” shall mean the Board of Managers of the LLC, acting pursuant to the Operating
Agreement except when such term is being used in Tariff, Attachment M, in which case PJM
Board shall mean the Board of Managers of PJM or its designated representative, exclusive of
any members of PJM Management.
PJM Control Area:
“PJM Control Area” shall mean the Control Area recognized by NERC as the PJM Control Area.
PJM Entities:
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“PJM Entities” shall mean PJM, including the Market Monitoring Unit, the PJM Board, and
PJM’s officers, employees, representatives, advisors, contractors, and consultants.
PJM Interchange:
“PJM Interchange” shall mean the following, as determined in accordance with the Operating
Agreement and Tariff: (a) for a Market Participant that is a Network Service User, the amount by
which its interval Equivalent Load exceeds, or is exceeded by, the sum of the interval outputs of
its operating generating resources; or (b) for a Market Participant that is not a Network Service
User, the amount of its Spot Market Backup; or (c) the interval scheduled deliveries of Spot
Market Energy by a Market Seller from an External Resource; or (d) the interval net metered
output of any other Market Seller; or (e) the interval scheduled deliveries of Spot Market Energy
to an External Market Buyer; or (f) the inteval scheduled deliveries to an Internal Market Buyer
that is not a Network Service User.
PJM Interchange Energy Market:
“PJM Interchange Energy Market” shall mean the regional competitive market administered by
the Office of the Interconnection for the purchase and sale of spot electric energy at wholesale in
interstate commerce and related services established pursuant to Operating Agreement, Schedule
1, and the parallel provisions of Tariff, Attachment K – Appendix.
PJM Interchange Export:
“PJM Interchange Export” shall mean the following, as determined in accordance with the
Operating Agreement and Tariff: (a) for a Market Participant that is a Network Service User, the
amount by which its interval Equivalent Load is exceeded by the sum of the inteval outputs of its
operating generating resources; or (b) for a Market Participant that is not a Network Service
User, the amount of its Spot Market Backup sales; or (c) the interval scheduled deliveries of Spot
Market Energy by a Market Seller from an External Resource; or (d) the interval net metered
output of any other Market Seller.
PJM Interchange Import:
“PJM Interchange Import” shall mean the following, as determined in accordance with the
Operating Agreement and Tariff: (a) for a Market Participant that is a Network Service User, the
amount by which its interval Equivalent Load exceeds the sum of the interval outputs of its
operating generating resources; or (b) for a Market Participant that is not a Network Service
User, the amount of its Spot Market Backup purchases; or (c) the interval scheduled deliveries of
Spot Market Energy to an External Market Buyer; or (d) the interval scheduled deliveries to an
Internal Market Buyer that is not a Network Service User.
PJM Liaison:
“PJM Liaison” shall mean the liaison established under Tariff, Attachment M, section III.I.
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PJM Management:
“PJM Management” shall mean the officers, executives, supervisors and employee managers of
PJM.
PJM Manuals:
“PJM Manuals” shall mean the instructions, rules, procedures and guidelines established by the
Office of the Interconnection for the operation, planning, and accounting requirements of the
PJM Region and the PJM Interchange Energy Market.
PJM Markets:
“PJM Markets” shall mean the PJM Interchange Energy Market, capacity markets, including the
RPM auctions, and any other market operated by PJM, together with all bilateral or other
wholesale electric power and energy transactions, capacity transactions, ancillary services
transactions (including black start service), transmission transactions, Financial Transmission
Rights transactions, or transactions in any other market operated under the Agreements within
the PJM Region, wherein Market Participants may incur Obligations to PJM and/or
PJMSettlement.
PJM Market Rules:
“PJM Market Rules” shall mean the rules, standards, procedures, and practices of the PJM
Markets set forth in the PJM Tariff, the PJM Operating Agreement, the PJM Reliability
Assurance Agreement, the PJM Consolidated Transmission Owners Agreement, the PJM
Manuals, the PJM Regional Practices Document, the PJM-Midwest Independent Transmission
System Operator Joint Operating Agreement or any other document setting forth market rules.
PJM Net Assets:
“PJM Net Assets” shall mean the total assets per PJM’s consolidated quarterly or year-end
financial statements most recently issued as of the date of the receipt of written notice of a claim
less amounts for which PJM is acting as a temporary custodian on behalf of its Members,
transmission developers/Designated Entities, and generation developers, including, but not
limited to, cash deposits related to credit requirement compliance, study and/or interconnection
receivables, member prepayments, invoiced amounts collected from Net Buyers but have not yet
been paid to Net Sellers, and excess congestion (as described in Operating Agreement, Schedule
1, section 5.2.6, and the parallel provisions of Tariff, Attachment K-Appendix, section 5.2.6).
PJM Region:
“PJM Region” shall have the meaning specified in the Operating Agreement.
PJM Regional Practices Document:
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“PJM Regional Practices Document” shall mean the document of that title that compiles and
describes the practices in the PJM Markets and that is made available in hard copy and on the
Internet.
PJM Region Installed Reserve Margin:
“PJM Region Installed Reserve Margin” shall mean the percent installed reserve margin for the
PJM Region required pursuant to RAA, Schedule 4.1, as approved by the PJM Board.
PJM Region Peak Load Forecast:
“PJM Region Peak Load Forecast” shall mean the peak load forecast used by the Office of the
Interconnection in determining the PJM Region Reliability Requirement, and shall be determined
on both a preliminary and final basis as set forth in Tariff, Attachment DD, section 5.
PJM Region Reliability Requirement:
“PJM Region Reliability Requirement” shall mean, for purposes of the Base Residual Auction,
the Forecast Pool Requirement multiplied by the Preliminary PJM Region Peak Load Forecast,
less the sum of all Preliminary Unforced Capacity Obligations of FRR Entities in the PJM
Region; and, for purposes of the Incremental Auctions, the Forecast Pool Requirement
multiplied by the updated PJM Region Peak Load Forecast, less the sum of all updated Unforced
Capacity Obligations of FRR Entities in the PJM Region.
PJMSettlement:
“PJM Settlement” or “PJM Settlement, Inc.” shall mean PJM Settlement, Inc. (or its successor),
established by PJM as set forth in Operaitng Agreement, section 3.3.
PJM Tariff, Tariff, O.A.T.T., OATT or PJM Open Access Transmission Tariff:
“PJM Tariff,” “Tariff,” “O.A.T.T.,” “OATT,” or “PJM Open Access Transmission Tariff” shall
mean that certain PJM Open Access Transmission Tariff, including any schedules, appendices or
exhibits attached thereto, on file with FERC and as amended from time to time thereafter.
Plan:
“Plan” shall mean the PJM market monitoring plan set forth in Tariff, Attachment M.
Planned Demand Resource:
“Planned Demand Resource” shall have the meaning specified in the Reliability Assurance
Agreement.
Planned External Generation Capacity Resource:
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“Planned External Generation Capacity Resource” shall have the meaning specified in the
Reliability Assurance Agreement.
Planned Generation Capacity Resource:
“Planned Generation Capacity Resource” shall have the meaning specified in the Reliability
Assurance Agreement.
Planning Period:
“Planning Period” shall mean the 12 moths beginning June 1 and extending through May 31 of
the following year, or such other period approved by the Members Committee.
Planning Period Balance:
“Planning Period Balance” shall mean the entire period of time remaining in the Planning Period
following the month that a monthly auction is conducted.
Planning Period Quarter:
“Planning Period Quarter” shall mean any of the following three month periods in the Planning
Period: June, July and August; September, October and November; December, January and
February; or March, April and May.
Point(s) of Delivery:
“Point(s) of Delivery” shall mean the point(s) on the Transmission Provider’s Transmission
System where capacity and energy transmitted by the Transmission Provider will be made
available to the Receiving Party under Tariff, Part II. The Point(s) of Delivery shall be specified
in the Service Agreement for Long-Term Firm Point-To-Point Transmission Service.
Point of Interconnection:
“Point of Interconnection” shall mean the point or points where the Customer Interconnection
Facilities interconnect with the Transmission Owner Interconnection Facilities or the
Transmission System.
Point(s) of Receipt:
“Point(s) of Receipt” shall mean point(s) of interconnection on the Transmission Provider’s
Transmission System where capacity and energy will be made available to the Transmission
Provider by the Delivering Party under Tariff, Part II. The Point(s) of Receipt shall be specified
in the Service Agreement for Long-Term Firm Point-To-Point Transmission Service.
Point-To-Point Transmission Service:
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“Point-To-Point Transmission Service shall mean the reservation and transmission of capacity
and energy on either a firm or non-firm basis from the Point(s) of Receipt to the Point(s) of
Delivery under Tariff, Part II.
Power Purchaser:
“Power Purchaser” shall mean the entity that is purchasing the capacity and energy to be
transmitted under the Tariff.
PRD Curve:
“PRD Curve” shall have the meaning provided in the Reliability Assurance Agreement.
PRD Provider:
“PRD Provider” shall have the meaning provided in the Reliability Assurance Agreement.
PRD Reservation Price:
“PRD Reservation” Price shall have the meaning provided in the Reliability Assurance
Agreement.
PRD Substation:
“PRD Substation” shall have the meaning provided in the Reliability Assurance Agreement.
Pre-Confirmed Application:
“Pre-Confirmed Application” shall be an Application that commits the Eligible Customer to
execute a Service Agreement upon receipt of notification that the Transmission Provider can
provide the requested Transmission Service.
Pre-Emergency Load Response Program:
“Pre-Emergency Load Response Program” shall be the program by which Curtailment Service
Providers may be compensated by PJM for Demand Resources that will reduce load when
dispatched by PJM during pre-emergency conditions, and is described in Operating Agreement,
Schedule 1, section 8 and the parallel provisions of Tariff, Attachment K-Appendix, section 8.
Pre-Expansion PJM Zones:
“Pre-Expansion PJM Zones” shall be zones included in the Tariff, along with applicable
Schedules and Attachments, for certain Transmission Owners – Atlantic City Electric Company,
Baltimore Gas and Electric Company, Delmarva Power and Light Company, Jersey Central
Power and Light Company, Mid-Atlantic Interstate Transmission, LLC (“MAIT”) (MAIT owns
and operates the transmission facilities in the Metropolitan Edison Company Zone and the
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Pennsylvania Electric Company Zone), PECO Energy Company, Pennsylvania Power & Light
Group, Potomac Electric Power Company, Public Service Electric and Gas Company, Allegheny
Power, and Rockland Electric Company.
Price Responsive Demand:
“Price Responsive Demand” shall have the meaning provided in the Reliability Assurance
Agreement.
Primary Reserve:
“Primary Reserve” shall mean the total reserve capability of generation resources that can be
converted fully into energy or Economic Load Response Participant resources whose demand
can be reduced within ten minutes of a request from the Office of the Interconnection dispatcher,
and is comprised of both Synchronized Reserve and Non-Synchronized Reserve.
Primary Reserve Alert
“Primary Reserve Alert” shall mean a notification from PJM to alert Members of an anticipated
shortage of Operating Reserve capacity for a future critical period.
Primary Reserve Requirement:
“Primary Reserve Requirement” shall mean the megawatts required to be maintained in a
Reserve Zone or Reserve Sub-zone as Primary Reserve absent any increase to account for
additional reserves scheduled to address operational uncertainty. The Primary Reserve
Requirement is calculated in accordance with the PJM Manuals. The requirement can be
satisfied by any combination of Synchronized Reserve or Non-Synchronized Reserve resources.
Principal:
“Principal” shall mean (i) all natural persons who Control Corporate Level Strategy for the
Participant, which shall include a chief executive officer, managing member (or equivalent
positions regardless of title) and members of a board of directors or board of managers; (ii) the
chief legal officer or general counsel (or equivalent position regardless of title); (iii) the natural
person who Controls the financial affairs and investments of the Participant, which shall include
a chief financial officer (or equivalent position regardless of title); (iv) the natural person who
Controls the Participant’s management of commodity and derivatives market risks, which shall
include a chief risk officer (or equivalent position regardless of title); (v) the natural person who
Controls the Participant’s transactions in the applicable PJM Markets (regardless of title); and
(vi) all Beneficial Owners.
“Control,” as that term is used in this definition, refers to possession of the power to direct the
management or policies of an entity.
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“Corporate Level Strategy,” as that term is used in this definition, refers to the highest-level
strategy of an entity, focused on the entity’s overall direction rather than the day-to-day
operations of the entity.
“Beneficial Owner,” as that term is used in this definition, means a natural person who, directly
or indirectly, alone or together with such person’s Family Members, owns, controls, or holds
with power to vote 10 percent or more of the outstanding securities of the Participant.
“Family Member,” as that term is used in this definition of “Beneficial Owner,” means a spouse,
domestic partner, parent, child, or sibling.
For purposes of trusts with, directly or indirectly, 10 percent or more of the outstanding
securities of the Participant as described above, the following are Beneficial Owners: (a) a
natural person trustee; (b) a natural person with the authority to dispose of the trust assets; (c) a
natural person grantor or settlor who has the right to revoke the trust or otherwise withdraw the
assets of the trust; and (d) a natural person beneficiary who is the sole permissible recipient of
income and principal from the trust or has the right to demand a distribution of or withdraw
substantially all of the assets from the trust.
If, due to the Participant’s business enterprise, structure or otherwise, a function described in
clauses (i) through (v) above is performed by a natural person or entity separate from the
Participant (such as a risk management department in an affiliate, or a director or manager at an
entity that controls or invests in the Participant), then for that Participant the term Principal shall
mean that natural person, or the senior officer or manager of that entity, that performs such
function.
Prior CIL Exception External Resource:
“Prior CIL Exception External Resource” shall mean an external Generation Capacity Resource
for which (1) a Capacity Market Seller had, prior to May 9, 2017, cleared a Sell Offer in an RPM
Auction under the exception provided to the definition of Capacity Import Limit as set forth in
RAA, Article I or (2) an FRR Entity committed, prior to May 9, 2017, in an FRR Capacity Plan
under the exception provided in the definition of Capacity Import Limit. In the event only a
portion (in MW) of an external Generation Capacity Resource has a Pseudo-Tie into the PJM
Region, that portion of the external Generation Capacity Resource, which can include up to the
maximum megawatt amount cleared in any prior RPM auction or committed in an FRR Capacity
Plan (and no other portion thereof) is eligible for treatment as a Prior CIL Exception External
Resource if such portion satisfies the requirements of the first sentence of this definition.
Project Financing:
“Project Financing” shall mean: (a) one or more loans, leases, equity and/or debt financings,
together with all modifications, renewals, supplements, substitutions and replacements thereof,
the proceeds of which are used to finance or refinance the costs of the Customer Facility, any
alteration, expansion or improvement to the Customer Facility, the purchase and sale of the
Customer Facility or the operation of the Customer Facility; (b) a power purchase agreement
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pursuant to which Interconnection Customer’s obligations are secured by a mortgage or other
lien on the Customer Facility; or (c) loans and/or debt issues secured by the Customer Facility.
Project Finance Entity:
“Project Finance Entity” shall mean: (a) a holder, trustee or agent for holders, of any component
of Project Financing; or (b) any purchaser of capacity and/or energy produced by the Customer
Facility to which Interconnection Customer has granted a mortgage or other lien as security for
some or all of Interconnection Customer’s obligations under the corresponding power purchase
agreement.
Projected EAS Dispatch:
“Projected EAS Dispatch” shall mean, for purposes of calculating the Net Energy and Ancillary
Services Revenue Offset, a simulated dispatch with the objective of committing and dispatching
a resource for the purpose of maximizing its net revenues. The calculation shall take inputs
including Forward Hourly LMPs, Forward Hourly Ancillary Service Prices, and Forward Daily
Natural Gas Prices or forecasted fuel prices, as applicable, in addition to the operating
parameters and costs of the specific resource, including the cost emission allowances. Using
operating parameters, forward or forecasted fuel prices, as applicable and other cost pricing
inputs, a composite, cost-based energy offer is created for the resource such that its commitment
and dispatch is co-optimized between energy and ancillary services in the Day-Ahead Energy
Market and then the Real-Time Energy Market considering the electricity and ancillary service
price inputs. In the Real-Time Energy Market co-optimization, the resource is assumed to be
operating in the hours it was scheduled in the Day-Ahead Energy Market but is dispatched
according to the real-time price inputs. In the hours where the resource was not committed in the
Day-Ahead Market, the resource may be committed and dispatched in real-time only subject to
the real-time electricity and ancillary service price inputs and the resource’s offer and operating
parameters. For combustion turbine units only, the cost-based energy offer will include a 10
percent adder only for the 2022/2023 Delivery Year.
Projected PJM Market Revenues:
“Projected PJM Market Revenues” shall mean a component of the Market Seller Offer Cap
calculated in accordance with Tariff, Attachment DD, section 6.
Proportional Multi-Driver Project:
“Proportional Multi-Driver Project” shall have the same meaning provided in the Operating
Agreement.
Provisional Interconnection Service:
“Provisional Interconnection Service” shall mean interconnection service provided by
Transmission Provider associated with interconnecting the Interconnection Customer’s
Generating Facility to Transmission Provider’s Transmission System and enabling that
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Transmission System to receive electric energy and capacity from the Generating Facility at the
Point of Interconnection, pursuant to the terms of the Interconnection Service Agreement and, if
applicable, the Tariff.
Pseudo-Tie:
“Pseudo-Tie” shall have the same meaning provided in the Operating Agreement.
Public Policy Objectives:
“Public Policy Objectives” shall have the same meaning provided in the Operating Agreement.
Public Policy Requirements:
“Public Policy Requirements” shall have the same meaning provided in the Operating
Agreement.
Qualifying RBP Offset UCAP MW:
“Qualifying RBP Offset UCAP MW” shall mean unforced capacity that: (i) pursuant to Tariff,
Attachment DD, section 18.2, has not received an RPM commitment or been committed in an
FRR Plan as of the commencement of the Reliability Backstop Procurement, (ii) is supplied by
eligible Capacity Resources in accordance with Tariff, Attachment DD, section 18.2(b), and (iii)
is supported by evidence, in accordance with Tariff, Attachment DD, section 18.2(c).
Qualifying Transmission Upgrade:
“Qualifying Transmission Upgrade” shall mean a proposed enhancement or addition to the
Transmission System that: (a) will increase the Capacity Emergency Transfer Limit into an LDA
by a megawatt quantity certified by the Office of the Interconnection; (b) the Office of the
Interconnection has determined will be in service on or before the commencement of the first
Delivery Year for which such upgrade is the subject of a Sell Offer in the Base Residual
Auction; (c) is the subject of a Facilities Study Agreement executed before the conduct of the
Base Residual Auction for such Delivery Year and (d) a New Service Customer is obligated to
fund through a rate or charge specific to such facility or upgrade.
Queue Position:
“Queue Position” shall mean the priority assigned to an Interconnection Request, a Completed
Application, or an Upgrade Request pursuant to applicable provisions of Tariff, Part VI.
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Definitions – R - S
Ramping Capability:
“Ramping Capability” shall mean the sustained rate of change of generator output, in megawatts
per minute.
Rating Agency:
“Rating Agency” shall mean a Nationally Recognized Statistical Rating Organization that
assesses the financial condition, strength and stability of companies and governmental entities
and their ability to timely make principal and interest payments on their debts and the likelihood
of default, and assigns a rating that reflects its assessment of the ability of the company or
governmental entity to make the debt payments.
RBP Charges:
“RBP Charges” shall mean the $/day value of the total RBP Settlement Credits, positive or
negative, of all committed RBP Resources across the PJM Region.
RBP Collateral:
“RBP Collateral” shall mean: either (1) a cash deposit, including any interest thereon, or (2) a
letter of credit issued for the benefit of PJM or PJMSettlement, in an amount and form
determined by and acceptable to PJM or PJMSettlement.
RBP Obligation:
“RBP Obligation” or “RBO” shall mean the state and/or RERRA-determined allocation of RBP
UCAP MW to Load Serving Entities within each Electric Distributor’s zone/area.
RBP Resources:
“RBP Resources” shall mean generation resources, Energy Storage Resources, Demand
Resources, or DER Aggregation Resources, as set forth in Tariff, Attachment DD, section 18.5,
offered to provide RBP UCAP MW from the Reliability Backstop Procurement, in accordance
with Tariff, Attachment DD, section 18.
RBP Seller:
“RBP Seller” shall mean an entity that owns or controls an RBP Resource that is offered into the
Reliability Backstop Procurement.
RBP Sell Offer:
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“RBP Sell Offer” shall mean an offer to sell RBP Resources in the Reliability Backstop
Procurement.
RBP Settlement Credits:
“RBP Settlement Credits” shall mean, for each day in the Delivery Year in the term of the
Reliability Backstop Procurement commitment period, the $/day value that a resource committed
in the Reliability Backstop Procurement receives as a contract for differences settlement in
accordance with Tariff, Attachment DD, section 18.5(g).
RBP UCAP MW:
“RBP UCAP MW” shall mean unforced capacity that is eligible to be offered in the Reliability
Backstop Procurement, in accordance with Tariff, Attachment DD, section 18.
Real-time Congestion Price:
“Real-time Congestion Price” shall mean the Congestion Price resulting from the Office of the
Interconnection’s dispatch of the PJM Interchange Energy Market in the Operating Day.
Real-time Loss Price:
“Real-time Loss Price” shall mean the Loss Price resulting from the Office of the
Interconnection’s dispatch of the PJM Interchange Energy Market in the Operating Day.
Real-time Energy Market:
“Real-time Energy Market” shall mean the purchase or sale of energy and payment of
Transmission Congestion Charges for quantity deviations from the Day-ahead Energy Market in
the Operating Day.
Real-time Offer:
“Real-time Offer” shall mean a new offer or an update to a Market Seller’s existing cost-based or
market-based offer for a clock hour, submitted for use after the close of the Day-ahead Energy
Market.
Real-time Prices:
“Real-time Prices” shall mean the Locational Marginal Prices resulting from the Office of the
Interconnection’s dispatch of the PJM Interchange Energy Market in the Operating Day.
Real-time Settlement Interval:
“Real-time Settlement Interval” shall mean the interval used by settlements, which shall be every
five minutes.
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Real-time State of Charge:
“Real-time State of Charge” shall mean the current State of Charge of an Energy Storage
Resource Model Participant, measured in units of megawatt-hours.
Real-time System Energy Price:
“Real-time System Energy Price” shall mean the System Energy Price resulting from the Office
of the Interconnection’s dispatch of the PJM Interchange Energy Market in the Operating Day.
Reasonable Efforts:
“Reasonable Efforts” shall mean, with respect to any action required to be made, attempted, or
taken by an Interconnection Party or by a Construction Party under Tariff, Part IV or Tariff, Part
VI, an Interconnection Service Agreement, or a Construction Service Agreement, such efforts as
are timely and consistent with Good Utility Practice and with efforts that such party would
undertake for the protection of its own interests.
Receiving Party:
“Receiving Party” shall mean the entity receiving the capacity and energy transmitted by the
Transmission Provider to Point(s) of Delivery.
Referral:
“Referral” shall mean a formal report of the Market Monitoring Unit to the Commission for
investigation of behavior of a Market Participant, of behavior of PJM, or of a market design
flaw, pursuant to Tariff, Attachment M, section IV.I.
Reference Resource:
For Delivery Years up to and including the 2025/2026 Delivery Year, “Reference Resource”
shall mean a combustion turbine generating station, configured with a single General Electric
Frame 7HA turbine with evaporative cooling, Selective Catalytic Reduction technology, dual
fuel capability, and a heat rate of 9.134 Mmbtu/ MWh. For the 2026/2027 through and including
the 2027/2028 Delivery Years, “Reference Resource” shall mean, for all CONE Areas, a
combustion turbine generating station, configured with a single General Electric Frame 7HA
turbine with evaporative cooling, Selective Catalytic Reduction technology, dual fuel capability,
and a heat rate of 9.189 Mmbtu/MWh. For the 2028/2029 Delivery Year and subsequent
Delivery Years, “Reference Resource” shall mean a combustion turbine generation station,
configured with a single 1x0 GE Frame 7HA.03 turbine with evaporative cooling, no inlet
chillers, wet compression, Selective Catalytic Reduction technology, dual fuel capability, and a
heat rate of 9.199 MMBtu/MWh.
Regional Entity:
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“Regional Entity” shall have the same meaning specified in the Operating Agreement.
Regional Network Integration Transmission Service:
“Regional Network Integration Transmission Service” shall mean firm transmission service
taken by Network Customers that involves the delivery of energy and/or capacity from Network
Resources physically interconnected to the Transmission Provider’s transmission system to
Network Load physically interconnected to the Transmission Provider’s transmission system.
Regional Transmission Expansion Plan:
“Regional Transmission Expansion Plan” shall mean the plan prepared by the Office of the
Interconnection pursuant to Operating Agreement, Schedule 6 for the enhancement and
expansion of the Transmission System in order to meet the demands for firm transmission
service in the PJM Region.
Regional Transmission Group (RTG):
“Regional Transmission Group” or “RTG” shall mean a voluntary organization of transmission
owners, transmission users and other entities approved by the Commission to efficiently
coordinate transmission planning (and expansion), operation and use on a regional (and
interregional) basis.
Regulation:
“Regulation” shall mean the capability of a specific generation resource or Demand Resource
with appropriate telecommunications, control and response capability to separately increase and
decrease its output or adjust load in response to a regulating control signal, in accordance with
the specifications in the PJM Manuals.
Regulation Requirement:
“Regulation Requirement” shall mean the required megawatts of performance-adjusted
Regulation capability to be maintained in a Regulation Zone. The Regulation Requirement is
defined as a set megawatt value by commitment interval and can increase to account for
additional operational uncertainty, in accordance with the PJM Manuals.
Regulation Zone:
“Regulation Zone” shall mean any of those one or more geographic areas, each consisting of a
combination of one or more Control Zone(s) as designated by the Office of the Interconnection
in the PJM Manuals, relevant to provision of, and requirements for, regulation service.
Relevant Electric Retail Regulatory Authority:
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“Relevant Electric Retail Regulatory Authority” shall mean an entity that has jurisdiction over
and establishes prices and policies for competition for providers of retail electric service to end-
customers, such as the city council for a municipal utility, the governing board of a cooperative
utility, the state public utility commission or any other such entity.
Reliability Assurance Agreement or PJM Reliability Assurance Agreement:
“Reliability Assurance Agreement” or “PJM Reliability Assurance Agreement” shall mean that
certain Reliability Assurance Agreement Among Load Serving Entities in the PJM Region, on
file with FERC as PJM Interconnection L.L.C. Rate Schedule FERC No. 44, and as amended
from time to time thereafter.
Reliability Pricing Model Auction:
“Reliability Pricing Model Auction” or “RPM Auction” shall mean the Base Residual Auction or
any Incremental Auction.
Required Transmission Enhancements:
“Regional Transmission Enhancements” shall mean enhancements and expansions of the
Transmission System that (1) a Regional Transmission Expansion Plan developed pursuant to
Operating Agreement, Schedule 6 or (2) any joint planning or coordination agreement between
PJM and another region or transmission planning authority set forth in Tariff, Schedule 12-
Appendix B (“Appendix B Agreement”) designates one or more of the Transmission Owner(s) to
construct and own or finance. Required Transmission Enhancements shall also include
enhancements and expansions of facilities in another region or planning authority that meet the
definition of transmission facilities pursuant to FERC’s Uniform System of Accounts or have
been classified as transmission facilities in a ruling by FERC addressing such facilities
constructed pursuant to an Appendix B Agreement cost responsibility for which has been
assigned at least in part to PJM pursuant to such Appendix B Agreement.
Reserved Capacity:
“Reserved Capacity” shall mean the maximum amount of capacity and energy that the
Transmission Provider agrees to transmit for the Transmission Customer over the Transmission
Provider’s Transmission System between the Point(s) of Receipt and the Point(s) of Delivery
under Tariff, Part II. Reserved Capacity shall be expressed in terms of whole megawatts on a
sixty (60) minute interval (commencing on the clock hour) basis.
Reserve Penalty Factor:
“Reserve Penalty Factor” shall mean the cost, in $/MWh, associated with being unable to meet a
specific reserve requirement in a Reserve Zone or Reserve Sub-zone. A Reserve Penalty Factor
will be defined for each reserve requirement in a Reserve Zone or Reserve Sub-zone.
Reserve Sub-zone:
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“Reserve Sub-zone” shall mean any of those geographic areas wholly contained within a Reserve
Zone, consisting of a combination of a portion of one or more Control Zone(s) as designated by
the Office of the Interconnection in the PJM Manuals, relevant to provision of, and requirements
for, reserve service.
Reserve Zone:
“Reserve Zone” shall mean any of those geographic areas consisting of a combination of one or
more Control Zone(s), as designated by the Office of the Interconnection in the PJM Manuals,
relevant to provision of, and requirements for, reserve service.
Residual Auction Revenue Rights:
“Residual Auction Revenue Rights” shall mean incremental stage 1 Auction Revenue Rights
created within a Planning Period by an increase in transmission system capability, including the
return to service of existing transmission capability, that was not modeled pursuant to Operating
Agreement, Schedule 1, section 7.5 and the parallel provisions of Tariff, Attachment K-
Appendix, section 7.5 in compliance with Operating Agreement, Schedule 1, section 7.4.2 (h)
and the parallel provisions of Tariff, Attachment K-Appendix, section 7.4.2(h), and, if modeled,
would have increased the amount of stage 1 Auction Revenue Rights allocated pursuant to
Operating Agreement, Schedule 1, section 7.4.2 and the parallel provisions of Tariff, Attachment
K-Appendix, section 7.4.2; provided that, the foregoing notwithstanding, Residual Auction
Revenue Rights shall exclude: 1) Incremental Auction Revenue Rights allocated pursuant to
Tariff, Part VI; and 2) Auction Revenue Rights allocated to entities that are assigned cost
responsibility pursuant to Operating Agreement, Schedule 6 for transmission upgrades that
create such rights.
Residual Metered Load:
“Residual Metered Load” shall mean all load remaining in an electric distribution company’s
fully metered franchise area(s) or service territory(ies) after all nodally priced load of entities
serving load in such area(s) or territory(ies) has been carved out.
Resource Substitution Charge:
“Resource Substitution Charge” shall mean a charge assessed on Capacity Market Buyers in an
Incremental Auction to recover the cost of replacement Capacity Resources.
Restricted Collateral:
“Restricted Collateral” shall mean Collateral, held by PJM or PJMSettlement, which cannot be
used, netted, credited or spent by the Participant to satisfy any other obligations.
Revenue Data for Settlements:
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“Revenue Data for Settlements” shall mean energy quantities used in accounting and billing as
determined pursuant to Tariff, Attachment K-Appendix and the corresponding provisions of
Operating Agreement, Schedule 1.
RPM Seller Credit:
“RPM Seller Credit” shall mean an additional form of Unsecured Credit defined in Tariff,
Attachment Q, section VI.
Scheduled Incremental Auctions:
“Scheduled Incremental Auctions” shall refer to the First, Second, or Third Incremental Auction.
Schedule of Work:
“Schedule of Work” shall mean that schedule attached to the Interconnection Construction
Service Agreement setting forth the timing of work to be performed by the Constructing Entity
pursuant to the Interconnection Construction Service Agreement, based upon the Facilities Study
and subject to modification, as required, in accordance with Transmission Provider’s scope
change process for interconnection projects set forth in the PJM Manuals.
Scope of Work:
“Scope of Work” shall mean that scope of the work attached as a schedule to the Interconnection
Construction Service Agreement and to be performed by the Constructing Entity(ies) pursuant to
the Interconnection Construction Service Agreement, provided that such Scope of Work may be
modified, as required, in accordance with Transmission Provider’s scope change process for
interconnection projects set forth in the PJM Manuals.
Seasonal Capacity Performance Resource:
“Seasonal Capacity Performance Resource” shall have the same meaning specified in Tariff,
Attachment DD, section 5.5A.
Secondary Reserve:
“Secondary Reserve” shall mean the reserve capability of generation resources that can be
converted fully into energy or Economic Load Response Participant resources whose demand
can be reduced within 30 minutes (less the capability of such resources to provide Primary
Reserve), from the request of the Office of the Interconnection, regardless of whether the
equipment providing the reserve is electrically synchronized to the Transmission System or not.
Secondary Systems:
“Secondary Systems” shall mean control or power circuits that operate below 600 volts, AC or
DC, including, but not limited to, any hardware, control or protective devices, cables,
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conductors, electric raceways, secondary equipment panels, transducers, batteries, chargers, and
voltage and current transformers.
Second Incremental Auction:
“Second Incremental Auction” shall mean an Incremental Auction conducted ten months before
the Delivery Year to which it relates.
Security:
“Security” shall mean the security provided by the New Service Customer pursuant to Tariff,
section 212.4 or Tariff, Part VI, section 213.4 to secure the New Service Customer’s
responsibility for Costs under the Interconnection Service Agreement or Upgrade Construction
Service Agreement and Tariff, Part VI, section 217.
Segment:
“Segment” shall have the same meaning as described in Operating Agreement, Schedule 1,
section 3.2.3(e), and the parallel provisions of Tariff, Attachment K-Appendix, section 3.2.3(e).
Self-Supply:
“Self-Supply” shall mean Capacity Resources secured by a Load-Serving Entity, by ownership
or contract, outside a Reliability Pricing Model Auction, and used to meet obligations under this
Attachment or the Reliability Assurance Agreement through submission in a Base Residual
Auction or an Incremental Auction of a Sell Offer indicating such Market Seller’s intent that
such Capacity Resource be Self-Supply. Self-Supply may be either committed regardless of
clearing price or submitted as a Sell Offer with a price bid. A Load Serving Entity's Sell Offer
with a price bid for an owned or contracted Capacity Resource shall not be deemed “Self-
Supply,” unless it is designated as Self-Supply and used by the LSE to meet obligations under
this Attachment or the Reliability Assurance Agreement.
Self-Supply Entity:
“Self-Supply Entity” shall mean the following types of Load Serving Entity that operate under
long-standing business models: single customer entity, public power entity, or vertically
integrated utility, where “vertically integrated utility” means a utility that owns generation,
includes such generation in its regulated rates, and earns a regulated return on its investment in
such generation or receives any cost recovery for such generation through bilateral contracts;
“single customer entity” means a Load Serving Entity that serves at retail only customers that
are under common control with such Load Serving Entity, where such control means holding
51% or more of the voting securities or voting interests of the Load Serving Entity and all its
retail customers; and “public power entity” means cooperative and municipal utilities, including
public power supply entities comprised of either or both of the same and rural electric
cooperatives, and joint action agencies.
Self-Supply Seller:
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“Self-Supply Seller” shall mean, for purposes of evaluating Buyer-Side Market Power, the
following types of Load Serving Entities that operate under long-standing business models:
vertically integrated utility or public power entity, where “vertically integrated utility” means a
utility that owns generation, includes such generation in its state-regulated rates, and earns a
state-regulated return on its investment in such generation; and “public power entity” means
electric cooperatives that are either rate regulated by the state or have their long-term resource
plan approved or otherwise reviewed and accepted by a Relevant Electric Retail Regulatory
Authority and municipal utilities or joint action agencies that are subject to direct regulation by a
Relevant Electric Retail Regulatory Authority.
Sell Offer:
“Sell Offer” shall mean an offer to sell Capacity Resources in a Base Residual Auction,
Incremental Auction, or Reliability Backstop Auction.
Service Agreement:
“Service Agreement” shall mean the initial agreement and any amendments or supplements
thereto entered into by the Transmission Customer and the Transmission Provider for service
under the Tariff.
Service Commencement Date:
“Service Commencement Date” shall mean the date the Transmission Provider begins to provide
service pursuant to the terms of an executed Service Agreement, or the date the Transmission
Provider begins to provide service in accordance with Tariff, Part II, section 15.3 or Tariff, Part
III, section 29.1.
Short-Term Firm Point-To-Point Transmission Service:
“Short-Term Firm Point-To-Point Transmission Service” shall mean Firm Point-To-Point
Transmission Service under Tariff, Part II with a term of less than one year.
Short-term Project:
“Short-term Project” shall have the same meaning provided in the Operating Agreement.
Site:
“Site” shall mean all of the real property, including but not limited to any leased real property
and easements, on which the Customer Facility is situated and/or on which the Customer
Interconnection Facilities are to be located.
Small Commercial Customer:
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“Small Commercial Customer,” as used in RAA, Schedule 6 and Tariff, Attachment DD-1, shall
mean a commercial retail electric end-use customer of an electric distribution company that
participates in a mass market demand response program under the jurisdiction of a RERRA and
satisfies the definition of a “small commercial customer” under the terms of the applicable
RERRA’s program, provided that the customer has an annual peak demand no greater than
100kW.
Small Generation Resource:
“Small Generation Resource” shall mean an Interconnection Customer’s device of 20 MW or
less for the production and/or storage for later injection of electricity identified in an
Interconnection Request, but shall not include the Interconnection Customer’s Interconnection
Facilities. This term shall include Energy Storage Resources and/or other devices for storage for
later injection of energy.
Small Inverter Facility:
“Small Inverter Facility” shall mean an Energy Resource that is a certified small inverter-based
facility no larger than 10 kW.
Small Inverter ISA:
“Small Inverter ISA” shall mean an agreement among Transmission Provider, Interconnection
Customer, and Interconnected Transmission Owner regarding interconnection of a Small Inverter
Facility under Tariff, Part IV, section 112B.
Special Member:
“Special Member” shall mean an entity that satisfies the requirements of Operating Agreement,
Schedule 1, section 1.5A.02, and the parallel provisions of Tariff, Attachment K-Appendix,
section 1.5A.02, or the special membership provisions established under the Emergency Load
Response and Pre-Emergency Load Response Programs.
Spot Market Backup:
“Spot Market Backup” shall mean the purchase of energy from, or the delivery of energy to, the
PJM Interchange Energy Market in quantities sufficient to complete the delivery or receipt
obligations of a bilateral contract that has been curtailed or interrupted for any reason.
Spot Market Energy:
“Spot Market Energy” shall mean energy bought or sold by Market Participants through the PJM
Interchange Energy Market at System Energy Prices determined as specified in Operating
Agreement, Schedule 1, section 2, and the parallel provisions of Tariff, Attachment K-Appendix,
section 2.
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Start Additional Labor Costs:
“Start Additional Labor Costs” shall mean additional labor costs for startup required above
normal station manning levels.
Start Fuel:
For units without a soak process, “Start Fuel” shall consist of fuel consumed from first fire of the
start process to first breaker closing, plus any fuel expended from last breaker opening to
shutdown.
For units with a soak process, “Start Fuel” is fuel consumed from first fire of the start process
(initial reactor criticality for nuclear units) to dispatchable output (including auxiliary boiler
fuel), plus any fuel expended from last breaker opening to shutdown, excluding normal plant
heating/auxiliary equipment fuel requirements. Start Fuel included for each temperature state
from breaker closure to dispatchable output shall not exceed the unit specific soak time period
reviewed and approved as part of the unit-specific parameter process detailed in Tariff,
Attachment K-Appendix, section 6.6(c) or the defaults below:
• Cold Soak Time = 0.73 * unit specific Minimum Run Time (in hours)
• Intermediate Soak Time = 0.61 * unit specific Minimum Run Time (in hours)
• Hot Soak Time = 0.43 * unit specific Minimum Run Time (in hours)
Start-Up Costs:
“Start-Up Costs” shall consist primarily of the cost of fuel, as determined by the unit’s start heat
input (adjusted by the performance factor) times the fuel cost. It also includes operating costs,
Maintenance Adders, emissions allowances/adders, and station service cost. Start-Up Costs can
vary with the unit offline time being categorized in three unit temperature conditions: hot,
intermediate and cold.
For units with a steam turbine and a soak process (nuclear, steam, and combined cycle), “Start
Fuel” is fuel consumed from first fire of start process (initial reactor criticality for nuclear units):
Start-Up Costs shall mean the net unit costs from PJM’s notification to the level at which the unit
can follow PJM’s dispatch, and from last breaker open to shutdown.
For units without a steam turbine and no soak process (engines, combustion turbines,
Intermittent Resources, and Energy Storage Resources): Start-Up Costs shall mean the unit costs
from PJM’s notification to first breaker close and from last breaker open to shutdown.
State:
“State” shall mean the District of Columbia and any State or Commonwealth of the United
States.
State Commission:
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“State Commission” shall mean any state regulatory agency having jurisdiction over retail
electricity sales in any State in the PJM Region.
State Estimator:
“State Estimator” shall mean the computer model of power flows specified in Operating
Agreement, Schedule 1, section 1.11A and the parallel provisions of Tariff, Attachment K-
Appendix, section 1.11A.
State of Charge:
“State of Charge” shall mean the operating parameter that represents the quantity of physical
energy stored (measured in units of megawatt-hours) in an Energy Storage Resource Model
Participant or in a storage component of a Hybrid Resource in proportion to its maximum State
of Charge capability. State of Charge is quantified as defined in the PJM Manuals.
State of Charge Management:
“State of Charge Management” shall mean the control of State of Charge of an Energy Storage
Resource Market Participant or a storage component of a Hybrid Resource using Charge and
Discharge Economic Minimum and Maximum Megawatts (and, as applicable, charge) limits,
changes in operating mode (as applicable), discharging (and, as applicable, charging) offer
curves, and self-scheduling of non-dispatchable sales (and, as applicable, purchases) of energy in
the PJM markets. State of Charge Management shall not interfere with the obligation of a
Market Seller of an Energy Storage Resource Model Participant or of a Hybrid Resource to
follow PJM dispatch, consistent with all other resources.
State Subsidy:
“State Subsidy” shall mean a direct or indirect payment, concession, rebate, subsidy, non-
bypassable consumer charge, or other financial benefit that is as a result of any action, mandated
process, or sponsored process of a state government, a political subdivision or agency of a state,
or an electric cooperative formed pursuant to state law, and that
(1) is derived from or connected to the procurement of (a) electricity or electric
generation capacity sold at wholesale in interstate commerce, or (b) an attribute of the
generation process for electricity or electric generation capacity sold at wholesale in
interstate commerce; or
(2) will support the construction, development, or operation of a new or existing Capacity
Resource; or
(3) could have the effect of allowing the unit to clear in any PJM capacity auction.
Notwithstanding the foregoing, State Subsidy shall not include (a) payments, concessions,
rebates, subsidies, or incentives designed to incent, or participation in a program, contract or
other arrangement that utilizes criteria designed to incent or promote, general industrial
development in an area or designed to incent siting facilities in that county or locality rather than
another county or locality; (b) state action that imposes a tax or assesses a charge utilizing the
parameters of a regional program on a given set of resources notwithstanding the tax or cost
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having indirect benefits on resources not subject to the tax or cost (e.g., Regional Greenhouse
Gas Initiative); (c) any indirect benefits to a Capacity Resource as a result of any transmission
project approved as part of the Regional Transmission Expansion Plan; (d) any contract, legally
enforceable obligation, or rate pursuant to the Public Utility Regulatory Policies Act or any other
state-administered federal regulatory program (e.g., the Cross-State Air Pollution Rule); (e) any
revenues from the sale or allocation, either direct or indirect, to an Entity Providing Supply
Services to Default Retail Service Provider where such entity’s obligations was awarded through
a state default procurement auction that was subject to independent oversight by a consultant or
manager who certifies that the auction was conducted through a non-discriminatory and
competitive bidding process, subject to the below condition, and provided further that nothing
herein would exempt a Capacity Resource that would otherwise be subject to the minimum offer
price rule pursuant to this Tariff; (f) any revenues for providing capacity as part of an FRR
Capacity Plan or through bilateral transactions with FRR Entities; or (g) any voluntary and arm’s
length bilateral transaction (including but not limited to those reported pursuant to Tariff,
Attachment DD, section 4.6), such as a power purchase agreement or other similar contract
where the buyer is a Self-Supply Entity and the transaction is (1) a short term transaction (one-
year or less) or (2) a long-term transaction that is the result of a competitive process that was not
fuel-specific and is not used for the purpose of supporting uneconomic construction,
development, or operation of the subject Capacity Resource, provided however that if the Self-
Supply Entity is responsible for offering the Capacity Resource into an RPM Auction, the
specified amount of installed capacity purchased by such Self-Supply Entity shall be considered
to receive a State Subsidy in the same manner, under the same conditions, and to the same extent
as any other Capacity Resource of a Self-Supply Entity. For purposes of subsection (e) of this
definition, a state default procurement auction that has been certified to be a result of a non-
discriminatory and competitive bidding process shall:
(i)
have no conditions based on the ownership (except supplier diversity
requirements or limits), location (except to meet PJM deliverability
requirements), affiliation, fuel type, technology, or emissions of any resources or
supply (except state-mandated renewable portfolio standards for which Capacity
Resources are separately subject to the minimum offer price rule or eligible for an
exemption);
(ii)
result in contracts between an Entity Providing Supply Services to Default Retail
Service Provider and the electric distribution company for a retail default
generation supply product and none of those contracts require that the retail
obligation be sourced from any specific Capacity Resource or resource type as set
forth in subsection (i) above; and
(iii)
establish market-based compensation for a retail default generation supply
product that retail customers can avoid paying for by obtaining supply from a
competitive retail supplier of their choice.
Station Power:
“Station Power” shall mean energy used for operating the electric equipment on the site of a
generation facility located in the PJM Region or for the heating, lighting, air-conditioning and
office equipment needs of buildings on the site of such a generation facility that are used in the
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operation, maintenance, or repair of the facility. Station Power does not include any energy (i)
used to power synchronous condensers; (ii) used for pumping at a pumped storage facility; (iii)
used in association with restoration or black start service; or (iv) that is Direct Charging Energy.
Sub-meter:
“Sub-meter” shall mean a metering point for electricity consumption that does not include all
electricity consumption for the end-use customer as defined by the electric distribution company
account number. PJM shall only accept sub-meter load data from end-use customers for
measurement and verification of Regulation service as set forth in the Economic Load Response
rules and PJM Manuals.
Summer-Period Capacity Performance Resource:
“Summer-Period Capacity Performance Resource” shall have the same meaning specified in
Tariff, Attachment DD, section 5.5A.
Surplus Interconnection Customer:
“Surplus Interconnection Customer” shall mean either an Interconnection Customer whose
Generating Facility is already interconnected to the PJM Transmission System or one of its
affiliates, or an unaffiliated entity that submits a Surplus Interconnection Request to utilize
Surplus Interconnection Service within the Transmission System in the PJM Region. A Surplus
Interconnection Customer is not a New Service Customer.
Surplus Interconnection Request:
“Surplus Interconnection Request” shall mean a request submitted by a Surplus Interconnection
Customer, pursuant to Tariff, Attachment RR, to utilize Surplus Interconnection Service within
the Transmission System in the PJM Region. A Surplus Interconnection Request is not a New
Service Request.
Surplus Interconnection Service:
“Surplus Interconnection Service” shall mean any unneeded portion of Interconnection Service
established in an Interconnection Service Agreement, such that if Surplus Interconnection
Service is utilized, the total amount of Interconnection Service at the Point of Interconnection
would remain the same.
Switching and Tagging Rules:
“Switching and Tagging Rules” shall mean the switching and tagging procedures of
Interconnected Transmission Owners and Interconnection Customer as they may be amended
from time to time.
Synchronized Reserve:
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“Synchronized Reserve” shall mean the reserve capability of generation resources that can be
converted fully into energy or Economic Load Response Participant resources whose demand
can be reduced within ten minutes from the request of the Office of the Interconnection
dispatcher, and is provided by equipment that is electrically synchronized to the Transmission
System.
Synchronized Reserve Event:
“Synchronized Reserve Event” shall mean a request from the Office of the Interconnection to
generation resources and/or Economic Load Response Participant resources able, assigned or
self-scheduled to provide Synchronized Reserve in one or more specified Reserve Zones or
Reserve Sub-zones, within ten minutes, to increase the energy output or reduce load by a
directed amount of the assigned or self-scheduled Synchronized Reserve.
Synchronized Reserve Requirement:
“Synchronized Reserve Requirement” shall mean the megawatts required to be maintained in a
Reserve Zone or Reserve Sub-zone as Synchronized Reserve, absent any increase to account for
additional reserves scheduled to address operational uncertainty. The Synchronized Reserve
Requirement is calculated in accordance with the PJM Manuals. This requirement can only be
satisfied by Synchronized Reserve resources.
System Condition:
“System Condition” shall mean a specified condition on the Transmission Provider’s system or
on a neighboring system, such as a constrained transmission element or flowgate, that may
trigger Curtailment of Long-Term Firm Point-to-Point Transmission Service using the
curtailment priority pursuant to Tariff, Part II, section 13.6. Such conditions must be identified
in the Transmission Customer’s Service Agreement.
System Energy Price:
“System Energy Price” shall mean the energy component of the Locational Marginal Price,
which is the price at which the Market Seller has offered to supply an additional increment of
energy from a resource, calculated as specified in Operating Agreement, Schedule 1, section 2
and the parallel provisions of Tariff, Attachment K-Appendix, section 2.
System Impact Study:
“System Impact Study” shall mean an assessment by the Transmission Provider of (i) the
adequacy of the Transmission System to accommodate a Completed Application, an
Interconnection Request or an Upgrade Request, (ii) whether any additional costs may be
incurred in order to provide such transmission service or to accommodate an Interconnection
Request, and (iii) with respect to an Interconnection Request, an estimated date that an
Interconnection Customer’s Customer Facility can be interconnected with the Transmission
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System and an estimate of the Interconnection Customer’s cost responsibility for the
interconnection; and (iv) with respect to an Upgrade Request, the estimated cost of the requested
system upgrades or expansion, or of the cost of the system upgrades or expansion, necessary to
provide the requested incremental rights.
System Protection Facilities:
“System Protection Facilities” shall refer to the equipment required to protect (i) the
Transmission System, other delivery systems and/or other generating systems connected to the
Transmission System from faults or other electrical disturbance occurring at or on the Customer
Facility, and (ii) the Customer Facility from faults or other electrical system disturbance
occurring on the Transmission System or on other delivery systems and/or other generating
systems to which the Transmission System is directly or indirectly connected. System Protection
Facilities shall include such protective and regulating devices as are identified in the Applicable
Technical Requirements and Standards or that are required by Applicable Laws and Regulations
or other Applicable Standards, or as are otherwise necessary to protect personnel and equipment
and to minimize deleterious effects to the Transmission System arising from the Customer
Facility.
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5.5
Eligibility for Participation in RPM Auctions
(a)
A Capacity Market Seller may submit a Sell Offer for a Capacity Resource in a Base
Residual Auction or Incremental Auction only if such seller owns or has the contractual
authority to control the output or load reduction capability of such resource and has not
transferred such authority to another entity prior to submitting such Sell Offer. Capacity
Resources must satisfy the capability and deliverability requirements of RAA, Schedule 9 and
RAA, Schedule 10, the requirements for Demand Resources or Energy Efficiency Resources in
Tariff, Attachment DD-1 and RAA, Schedule 6, as applicable, and, the criteria in Tariff,
Attachment DD, section 5.5A. Effective with the 2025/2026 Delivery Year and subsequent
Delivery Years, aA Planned Generation Capacity Resource may be included in a Sell Offer for
an RPM Auction only if the Capacity Market Seller of such resource provides a binding notice
of intent, as further detailed in the PJM Manuals, to submit a Sell Offer in such auction to the
Office of the Interconnection no later than (a) the immediately preceding December 1 for a Base
Residual Auction (except that for the 2025/2026 Delivery Year, such notice shall be submitted
by December 12, 2023, and except that for the 2026/2027 and 2028/2029 Delivery Years, such
notice shall be submitted by 180 days prior to the commencement of the offer period), or (b)
ninety (90) days prior to the commencement of the offer period for an Incremental Auction.
(b)
Notwithstanding the foregoing, a committed RBP Resource shall be required to be
offered into the relevant Base Residual Auction and is not required to submit a binding notice of
intent to offer into such auction. However, a committed RBP Resource that is not the subject of
a notice of intent to be offered into the Base Residual Auction associated with the 2029/2030
Delivery Year shall be offered into the Second Incremental Auction for the 2029/2030 Delivery
Year. In the event a committed RBP Resource is not expected to be in-service or deliverable by
the relevant Delivery Year, the Capacity Market Seller of such committed RBP Resource may
notify the Office of the Interconnection, with supporting documentation, that the resource is not
expected to be in-service or deliverable by the relevant Delivery Year. Such notice for a
committed RBP Resource shall be submitted no later than (i) the immediately preceding
December 1 for a Base Residual Auction or (ii) ninety (90) days prior to the commencement of
the offer period for an Incremental Auction. A committed RBP Resource that provides such
notice will be assessed any applicable RBP shortfall charge and not be allowed to be offered into
the applicable RPM Auction.
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5.5A Capacity Resource Types
(a)
Capacity Performance Resources
Capacity Performance Resources are Capacity Resources which, to the extent such resources
cleared in a Reliability Pricing Model Auction or are otherwise committed as a Capacity
Resource, are obligated to deliver energy during the relevant Delivery Year as scheduled and/or
dispatched by the Office of Interconnection during the Performance Assessment Intervals. As
further detailed in Tariff, Attachment DD, section 10A, Capacity Performance Resources that
fail to meet this obligation will be subject to a Non-Performance Charge, unless excused
pursuant to Tariff, Attachment DD, section 10A(d). As further detailed in Tariff, Attachment
DD, section 10B, Demand Resources that fail to meet this obligation during Non-PAI Events
will be subject to a Non-Curtailment Charge. Subject to 5.5A(a)(i), the following types of
Capacity Resources are eligible to submit a Sell Offer as a Capacity Performance Resource:
internal or external Generation Capacity Resources; Annual Demand Resources; Capacity
Storage Resources; Annual Energy Efficiency Resources; and Qualifying Transmission
Upgrades. To the extent the underlying Capacity Resource is an external Generation Capacity
Resource, such resource must meet, to the extent subsection (b) or (c) of this section is applicable
to offers from such resource, meet the applicable requirements of such subsection, and if neither
subsection (b) or (c) is applicable, then offers from such resource must the criteria for obtaining
an exception to the Capacity Import Limit as contained in RAA, Article 1. However, Electrical
Distance requirements shall not apply to an external Generation Capacity Resource to the extent
that such resource is an RBP Resource committed through the Reliability Backstop Procurement
that is subsequently pseudo-tied to the PJM Region to the extent the Office of the
Interconnection has elected to retain the resource, for the remainder of its RBP commitment
term, within the PJM Region after the relevant Transmission Owner has exited PJM
Interconnection, L.L.C. pursuant to Tariff, Attachment DD, section 18.7(a).
(i)
Process for Support and Review of Capacity Performance Resource Offers
A.
The Capacity Market Seller shall provide to the Office of the
Interconnection and the Market Monitoring Unit, upon their request, all supporting data
and information requested by either the Office of the Interconnection or the Market
Monitoring Unit to evaluate whether the underlying Capacity Resource can meet the
operational and performance requirements of Capacity Performance Resources. The
Capacity Market Seller shall have an ongoing obligation through the closing of the offer
period for the RPM Auction to update the request to reflect any material changes.
B.
The Office of the Interconnection and the Market Monitoring Unit shall
review any requested supporting data and information, and the Office of the
Interconnection, considering advice and recommendation from the Market Monitoring
Unit, shall reject a request for a resource to offer as a Capacity Performance Resource if
the Capacity Market Seller does not demonstrate that it can reasonably be expected to
meet its Capacity Performance obligations consistent with the resource’s offer by the
relevant Delivery Year. The Office of Interconnection shall provide its determination to
reject eligibility of the resource as a Capacity Performance Resource, and notify the
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Market Monitoring Unit, by no later than sixty-five (65) days prior to the date on which
the offer period for the applicable RPM Auction commences. A Capacity Market Seller
that is dissatisfied with any determination hereunder may seek any remedies available to
it from FERC; provided, however, that the Office of the Interconnection will proceed
with administration of the Tariff and market rules unless and until ordered to do
otherwise by FERC.
(b)
Offers from External Generation Capacity Resources for the 2020/2021 Delivery Year
and Subsequent Delivery Years—General Rule
For the 2020/2021 Delivery Year and any subsequent Delivery Year and for Capacity
Performance Resource Sell Offers in any RPM Auction conducted for the 2018/2019 Delivery
Year or 2019/2020 Delivery Year after May 9, 2017, unless excepted pursuant to subsection (c)
below, a Capacity Market Seller may submit a Sell Offer for an external Generation Capacity
Resource in an RPM Auction if the Capacity Market Seller demonstrates to PJM, by no later
than five (5) business days prior to the commencement of the offer period for the relevant RPM
Auction, that such resource meets all of the following requirements:
(i)
The Capacity Market Seller has obtained a determination that the Pseudo-Tie
required for its external Generation Capacity Resource is feasible, including (without limitation)
that such Pseudo-Tie meets the following requirements:
(A) the external Generation Capacity Resource must have a minimum Electrical
Distance impedance equal to or less than 0.065 p.u.; or is within one station of a
transmission bus that has a minimum Electrical Distance impedance equal to or less than
0.065 p.u. With regard to this Electrical Distance requirement, the Office of the
Interconnection shall:
(1) post on its website the material assumptions, applicable to all tested
generators, implemented in the modeling software used to conduct the
Electrical Distance analysis (e.g., the general process used to define
the facilities included in the Electrical Distance requirement and
analysis for each Pseudo-Tie applicant);
(2) upon request by an applicant for a Pseudo-Tie, provide that applicant
a copy of the results of the Electrical Distance analysis conducted by
the Office of the Interconnection for the specific Pseudo-Tie requested
by the applicant, as well as related work papers; and
(3) upon request by an applicant for a Pseudo-Tie, meet with that
applicant to discuss specific modeling assumptions and the results of
the Electrical Distance analysis for the specific Pseudo-Tie requested
by that applicant;
(B) at least one generation resource that has a historic economic minimum offer
lower than its historic economic maximum offer, located inside the metered boundaries
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of the PJM Region, has a minimum flow distribution impact of 1.5 percent on each
eligible coordinated flowgate resulting from such Pseudo-Tie. With regard to this
requirement, the Office of the Interconnection shall:
(1) post on its website the material assumptions, applicable to all tested
generators, that have been implemented in the modeling software used
to conduct the analysis to determine whether the requirement has been
met (e.g., the definitions of the sink and source used in the market-to-
market analysis and the definition of eligible coordinated flowgates as
applicable to the requirement);
(2) upon request by an applicant for a Pseudo-Tie, provide that applicant a
copy of the results of the market-to-market flowgate analysis conducted by
the Office of the Interconnection for the specific Pseudo-Tie requested by
the applicant, as well as related work papers; and
(3) upon request by an applicant for a Pseudo-Tie, meet with that applicant
to discuss specific modeling assumptions and the results of the market-to-
market flowgate analysis conducted for the specific Pseudo-Tie requested
by that applicant;
(C) each external entity with which PJM may be required to coordinate flowgates
under an agreed congestion management process maintains a network model that
produces results for such flowgates that are within two percent of the results produced by
the PJM network model for such flowgates;
(D) the Capacity Market Seller has secured written acknowledgement from the
external Balancing Authority Areas that such Pseudo-Tie does not require tagging and
that firm allocations associated with any coordinated flowgates applicable to the external
Generation Capacity Resource under any agreed congestion management process then in
effect between PJM and such Balancing Authority Area will be allocated to PJM.
and the Capacity Market Seller has committed in writing that it will take all steps necessary to
implement such Pseudo-Tie prior to the start of the relevant Delivery Year;
(ii)
it has, for transmission outside PJM, obtained long-term firm point-to-point
transmission service (evaluated for deliverability from the unit-specific physical location of the
resource to PJM load pursuant to a study that is reviewed and approved by PJM in accordance
with PJM deliverability criteria to ensure uniformity for internal and external resource
deliverability requirements), with rollover rights for the term of the transmission service that is
confirmed by the Balancing Authority for the Balancing Authority Area where such resource is
geographically located; and, as to transmission within PJM, has obtained Network External
Designated Transmission Service; and
(iii)
it is, by written commitment of the Capacity Market Seller, subject to the same
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obligations imposed on Generation Capacity Resources located in the PJM Region by Tariff,
Attachment DD, section 6.6 to offer their capacity into RPM Auctions.
A Capacity Market Seller that satisfies the above requirements with respect to an external
Generation Capacity Resource Sell Offer submitted in an RPM Auction for a Delivery Year shall
be required to demonstrate satisfaction of such requirements for any Sell Offer with respect to
such resource submitted in an RPM Auction for any subsequent Delivery Year, including,
without limitation, demonstration that the required external transmission service continues to
satisfy PJM’s deliverability standards.
(c)
Offers from external Generation Capacity Resources for the 2020/2021 Delivery Year
and Subsequent Delivery Years—Exception.
A Capacity Market Seller of a Prior CIL Exception External Resource may continue to submit
Sell Offers for such resource for any RPM Auction for any Delivery Year up to and including the
2021/2022 Delivery Year (or, solely for any such resource that is (1) owned by a Load Serving
Entity and used to self-supply (under arrangements initiated before June 1, 2016, with a duration
of at least ten years) such entity’s PJM Region load or (2) the subject of a contract for energy or
capacity or equivalent written agreement entered into on or before June 1, 2016 for a term of ten
years or longer with a purchaser that is an internal PJM load customer, for any Delivery Year
during the life of such resource for subparagraph (1) or for the term of the agreement under
subparagraph (2)) so long as it continues to comply with all conditions on the grant of its
exception to the Capacity Import Limit, subject to the following additional conditions:
(i)
for any Delivery Year, beginning with the 2017/2018 Delivery Year, for
which such Prior CIL Exception External Resource has cleared an RPM Auction, PJM
may in its sole judgment determine that the resource is not Operationally Deliverable for
such Delivery Year because it does not satisfy the requirements of subsection (b). If PJM
determines a Prior CIL Exception External Resource is not Operationally Deliverable for
a Delivery Year, it must notify the Capacity Market Seller of its determination by no later
than October 1 immediately preceding such Delivery Year. After receiving such notice,
the Capacity Market Seller may elect to:
(A) take the necessary actions to make the Prior CIL Exception External
Resource Operationally Deliverable, in PJM’s sole judgment, prior to the
beginning of such Delivery Year, provided that PJM will, if transmission
upgrades are required to make such resource Operationally Deliverable, facilitate
the performance of transmission studies and otherwise cooperate with the external
Transmission Provider of the system on which such upgrades are required to
identify the upgrades required to meet PJM’s deliverability standards;
(B) be relieved of its capacity obligation for such Delivery Year by
providing written notice of such election to the Office of the Interconnection no
later than seven (7) days prior to the posting of planning parameters for the Third
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Incremental Auction for such Delivery Year as PJM will procure the replacement
capacity in the Third Incremental Auction in accordance with Tariff, Attachment
DD, sections 5.12(b)(ii) and 5.12(b)(iii), with no entitlement to any capacity
revenues based on such resource, with no requirement to seek replacement for
such capacity for such Delivery Year, with no penalty for non-performance or
lack of commitment for such Delivery Year, and with no further must-offer
obligation that would otherwise arise solely from clearing such capacity for such
Delivery Year; or
(C) procure, by purchase or otherwise, replacement in a sufficient quantity
to replace the capacity that would have been provided by the Prior CIL Exception
External Resource but for PJM’s determination that such resource is not
Operationally Deliverable.
(ii)
Such Capacity Market Seller’s continued ability to offer such resource
under this exception is conditioned on external Transmission Providers continuing to
honor the firm status of the Capacity Market Seller’s transmission service for all Delivery
Years for which such seller offers such resource under the exceptions provided in this
subsection (c).
(iii)
A Capacity Market Seller offering and clearing a Prior CIL Exception
External Resource pursuant to this subsection (c) shall be relieved of its must-offer
obligation that would otherwise arise solely from clearing such capacity. Such relief of
the must-offer obligation shall be for any Delivery Year after the last Delivery Year for
which it is permitted to offer such resource under this subsection (c).
(iv)
PJM will determine key triggers for when a Prior CIL Exception External
Resource will not be Operationally Deliverable, including the need for: (1) a remedial
action scheme or manual generation dump protocol to manage external transmission
emergencies; (2) transmission facility switching arrangements that would have the effect
of radializing load in order to manage external transmission emergencies; and (3) “out of
market” external Balancing Authority or Transmission Operator directed dispatch
instructions to manage excessive or unacceptable frequency of external regional
reliability limit violations or (outside an interregional agreed congestion management
process) of local reliability limit violations.
(d)
Seasonal Capacity Performance Resource
A Seasonal Capacity Performance Resource shall mean a Summer-Period Capacity Performance
Resource or Winter-Period Capacity Performance Resource, as defined below.
i)
Summer-Period Capacity Performance Resource
The following types of Capacity Resources are eligible to submit a Sell Offer as a
Summer-Period Capacity Performance Resource: Summer Period Demand Resource that
has an average expected energy output during summer peak-hour periods consistently
and measurably greater than its average expected energy output during winter peakhour
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periods. To the extent such resource clears an RPM Auction or is otherwise committed
as a Summer-Period Capacity Performance Resource, it is obligated to reduce when
dispatched by the Office of Interconnection during Performance Assessment Intervals or
Non-PAI Event intervals occurring in the calendar months of June through October and
the following May of the Delivery Year, and must satisfy the requirements of a Capacity
Performance Resource for such period of time. As further detailed in Tariff, Attachment
DD, sections 10A or 10B, Summer-Period Capacity Performance Resources that fail to
meet this obligation will be subject to a Non-Performance Charge, unless excused
pursuant to Tariff, Attachment DD, section 10A(d) and a Non-Curtailment Charge.
ii)
Winter-Period Capacity Performance Resource
The following types of Capacity Resources are eligible to submit a Sell Offer as a
Winter-Period Capacity Performance Resource: Intermittent Resource that has been
granted additional Capacity Interconnection Rights related to the winter-period. To the
extent such resource clears an RPM Auction or is otherwise committed as a Winter-
Period Capacity Performance Resource, it is obligated to deliver energy as scheduled
and/or dispatched by the Office of Interconnection during Performance Assessment
Intervals occurring in the calendar months of November through April of the Delivery
Year, and must satisfy the requirements of a Capacity Performance Resource for such
period of time. As further detailed in Tariff, Attachment DD, section 10A, Winter-Period
Capacity Performance Resources that fail to meet this obligation will be subject to a Non-
Performance Charge, unless excused pursuant to Tariff, Attachment DD, section 10A(d).
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5.14
Clearing Prices and Charges
a)
Capacity Resource Clearing Prices
For each Base Residual Auction and Incremental Auction, the Office of the Interconnection shall
calculate a clearing price to be paid for each megawatt-day of Unforced Capacity that clears in
such auction. The Capacity Resource Clearing Price for each LDA will be the marginal value of
system capacity for the PJM Region, without considering locational constraints, adjusted as
necessary by any applicable Locational Price Adders, all as determined by the Office of the
Interconnection based on the optimization algorithm. If a Capacity Resource is located in more
than one Locational Deliverability Area, it shall be paid the highest Locational Price Adder in
any applicable LDA in which the Sell Offer for such Capacity Resource cleared.
The Locational Price Adder applicable to each cleared Seasonal Capacity Performance Resource
is determined during the post-processing of the RPM Auction results consistent with the manner
in which the auction clearing algorithm recognizes the contribution of Seasonal Capacity
Performance Resource Sell Offers in satisfying an LDA’s reliability requirement. For each LDA
with a positive Locational Price Adder with respect to the immediate higher level LDA, starting
with the lowest level constrained LDAs and moving up, PJM determines the quantity of equally
matched Summer-Period Capacity Performance Resources and Winter-Period Capacity
Performance Resources located and cleared within that LDA. Up to this quantity, the cleared
Summer-Period Capacity Performance Resources and Winter-Period Capacity Performance
Resources with the lowest Sell Offer prices will be compensated using the highest Locational
Price Adder applicable to such LDA; and any remaining Seasonal Capacity Performance
Resources cleared within the LDA are effectively moved to the next higher level constrained
LDA, where they are considered in a similar manner for compensation.
b)
Resource Make-Whole Payments
If a Sell Offer specifies a minimum block, and only a portion of such block is needed to clear the
market in a Base Residual or Incremental Auction, the MW portion of such Sell Offer needed to
clear the market shall clear, and such Sell Offer shall set the marginal value of system capacity.
In addition, the Capacity Market Seller shall receive a Resource Make-Whole Payment equal to
the Capacity Resource Clearing Price in such auction times the difference between the Sell
Offer's minimum block MW quantity and the Sell Offer's cleared MW quantity. If the Sell Offer
price of a cleared Seasonal Capacity Performance Resource exceeds the applicable Capacity
Resource Clearing Price, the Capacity Market Seller shall receive a Resource Make-Whole
Payment equal to the difference between the Sell Offer price and Capacity Resource Clearing
Price in such RPM Auction. The cost for any such Resource Make-Whole Payments required in
a Base Residual Auction or Incremental Auction for adjustment of prior capacity commitments
shall be collected pro rata from all LSEs in the LDA in which such payments were made, based
on their Daily Unforced Capacity Obligations. The cost for any such Resource Make-Whole
Payments required in an Incremental Auction for capacity replacement shall be collected from all
Capacity Market Buyers in the LDA in which such payments were made, on a pro-rata basis
based on the MWs purchased in such auction.
c)
New Entry Price Adjustment
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A Capacity Market Seller that submits a Sell Offer based on a Planned Generation Capacity
Resource that clears in the BRA for a Delivery Year may, at its election, submit Sell Offers with
a New Entry Price Adjustment in the BRAs for the two immediately succeeding Delivery Years
if:
1.
Such Capacity Market Seller provides notice of such election at the time it
submits its Sell Offer for such resource in the BRA for the first Delivery Year for which such
resource is eligible to be considered a Planned Generation Capacity Resource. When the
Capacity Market Seller provides notice of such election, it must specify whether its Sell Offer is
contingent upon qualifying for the New Entry Price Adjustment. The Office of the
Interconnection shall not clear such contingent Sell Offer if it does not qualify for the New Entry
Price Adjustment.
2.
All or any part of a Sell Offer from the Planned Generation Capacity
Resource submitted in accordance with section 5.14(c)(1) is the marginal Sell Offer that sets the
Capacity Resource Clearing Price for the LDA.
3.
Acceptance of all or any part of a Sell Offer that meets the conditions in
section 5.14(c)(1)-(2) in the BRA increases the total Unforced Capacity committed in the BRA
(including any minimum block quantity) for the LDA in which such Resource will be located
from a megawatt quantity below the LDA Reliability Requirement to a megawatt quantity at or
above a megawatt quantity at the price-quantity point on the VRR Curve at which the price is
0.40 times the applicable Net CONE divided by (one minus the pool-wide average EFORd)
through the 2024/2025 Delivery Year, and beginning with the 2025/2026 Delivery Year, divided
by the applicable ELCC Class Rating for the Reference Resource.
4.
Such Capacity Market Seller submits Sell Offers in the BRA for the two
immediately succeeding Delivery Years for the entire Unforced Capacity of such Generation
Capacity Resource committed in the first BRA under section 5.14(c)(1)-(2) equal to the lesser of:
A) the price in such seller’s Sell Offer for the BRA in which such resource qualified as a Planned
Generation Capacity Resource that satisfies the conditions in section 5.14(c)(1)-(3); or B) 0.90
times the Net CONE applicable in the first BRA in which such Planned Generation Capacity
Resource meeting the conditions in section 5.14(c)(1)-(3) cleared, on an Unforced Capacity
basis, for such LDA.
5.
If the Sell Offer is submitted consistent with section 5.14(c)(1)-(4) the
foregoing conditions, then:
(i)
in the first Delivery Year, the Resource sets the Capacity Resource
Clearing Price for the LDA and all cleared resources in the LDA receive
the Capacity Resource Clearing Price set by the Sell Offer as the marginal
offer, in accordance with Tariff, Attachment DD, section 5.12(a) and
section 5.14(a) above.
(ii)
in either of the subsequent two BRAs, if any part of the Sell Offer from
the Resource clears, it shall receive the Capacity Resource Clearing Price
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for such LDA for its cleared capacity and for any additional minimum
block quantity pursuant to section 5.14(b) above; or
(iii)
if the Resource does not clear, it shall be deemed resubmitted at the
highest price per MW-day at which the megawatt quantity of Unforced
Capacity of such Resource that cleared the first-year BRA will clear the
subsequent-year BRA pursuant to the optimization algorithm described in
Tariff, Attachment DD, section 5.12(a), and
(iv)
the resource with its Sell Offer submitted shall clear and shall be
committed to the PJM Region in the amount cleared, plus any additional
minimum-block quantity from its Sell Offer for such Delivery Year, but
such additional amount shall be no greater than the portion of a minimum-
block quantity, if any, from its first-year Sell Offer satisfying section
5.14(c)(1)-(3) above that is entitled to compensation pursuant to section
5.14(b) above; and
(v)
the Capacity Resource Clearing Price, and the resources cleared, shall be
re-determined to reflect the resubmitted Sell Offer. In such case, the
Resource for which the Sell Offer is submitted pursuant to section
5.14(c)(1)-(4) above shall be paid for the entire committed quantity at the
Sell Offer price that it initially submitted in such subsequent BRA. The
difference between such Sell Offer price and the Capacity Resource
Clearing Price (as well as any difference between the cleared quantity and
the committed quantity), will be treated as a Resource Make-Whole
Payment in accordance with section 5.14(b) above. Other capacity
resources that clear the BRA in such LDA receive the Capacity Resource
Clearing Price as determined in section 5.14(a) above.
6.
The failure to submit a Sell Offer consistent with section 5.14(c)(i)-(iii)
above in the BRA for Delivery Year 3 shall not retroactively revoke the New Entry Price
Adjustment for Delivery Year 2. However, the failure to submit a Sell Offer consistent with
section 5.14(c)(4) above in the BRA for Delivery Year 2 shall make the resource ineligible for
the New Entry Pricing Adjustment for Delivery Years 2 and 3.
7.
For each Delivery Year that the foregoing conditions are satisfied, the
Office of the Interconnection shall maintain and employ in the auction clearing for such LDA a
separate VRR Curve, notwithstanding the outcome of the test referenced in Tariff, Attachment
DD, section 5.10(a)(ii).
8.
On or before August 1, 2012, PJM shall file with FERC under FPA
section 205, as determined necessary by PJM following a stakeholder process, tariff changes to
establish a long-term auction process as a not unduly discriminatory means to provide adequate
long-term revenue assurances to support new entry, as a supplement to or replacement of this
New Entry Price Adjustment.
d)
Qualifying Transmission Upgrade Payments
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A Capacity Market Seller that submitted a Sell Offer based on a Qualifying Transmission
Upgrade that clears in the Base Residual Auction shall receive a payment equal to the Capacity
Resource Clearing Price, including any Locational Price Adder, of the LDA into which the
Qualifying Transmission Upgrade is to increase Capacity Emergency Transfer Limit, less the
Capacity Resource Clearing Price, including any Locational Price Adder, of the LDA from
which the upgrade was to provide such increased CETL, multiplied by the megawatt quantity of
increased CETL cleared from such Sell Offer. Such payments shall be reflected in the
Locational Price Adder determined as part of the Final Zonal Capacity Price for the Zone
associated with such LDAs, and shall be funded through a reduction in the Capacity Transfer
Rights allocated to Load-Serving Entities under Tariff, Attachment DD, section 5.15, as set forth
in that section. PJMSettlement shall be the Counterparty to any cleared capacity transaction
resulting from a Sell Offer based on a Qualifying Transmission Upgrade.
e)
Locational Reliability Charge
In accordance with the Reliability Assurance Agreement, each LSE shall incur a Locational
Reliability Charge (subject to certain offsets and other adjustments as described in and Tariff,
Attachment DD, section 5.15) equal to such LSE’s Daily Unforced Capacity Obligation in a
Zone during such Delivery Year multiplied by the applicable Final Zonal Capacity Price in such
Zone. PJMSettlement shall be the Counterparty to the LSEs’ obligations to pay, and payments
of, Locational Reliability Charges.
f)
The Office of the Interconnection shall determine Zonal Capacity Prices in
accordance with the following, based on the optimization algorithm:
i)
The Office of the Interconnection shall calculate and post the Preliminary
Zonal Capacity Prices for each Delivery Year following the Base Residual Auction for such
Delivery Year. The Preliminary Zonal Capacity Price for each Zone shall be the sum of: (1) the
marginal value of system capacity for the PJM Region, without considering locational
constraints; (2) the Locational Price Adder, if any, for the LDA in which such Zone is located;
provided however, that if the Zone contains multiple LDAs with different Capacity Resource
Clearing Prices, the Zonal Capacity Price shall be a weighted average of the Capacity Resource
Clearing Prices for such LDAs, weighted by the Unforced Capacity of Capacity Resources
cleared in each such LDA; (3) an adjustment, if required, to account for adders paid to Annual
Resources in the LDA for which the zone is located; (4) an adjustment, if required, to account for
Resource Make-Whole Payments; and (5) an adjustment, if required to provide sufficient
revenue for payment of any PRD Credits, all as determined in accordance with the optimization
algorithm.
ii)
The Office of the Interconnection shall calculate and post the Adjusted
Zonal Capacity Price following each Incremental Auction. The Adjusted Zonal Capacity Price
for each Zone shall equal the sum of: (1) the average marginal value of system capacity
weighted by the Unforced Capacity cleared in all auctions previously conducted for such
Delivery Year (excluding any Unforced Capacity cleared as replacement capacity); (2) the
average Locational Price Adder weighted by the Unforced Capacity cleared in all auctions
previously conducted for such Delivery Year (excluding any Unforced Capacity cleared as
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replacement capacity); (3) an adjustment, if required, to account for adders paid to Annual
Resources for all auctions previously conducted for such Delivery Year (excluding any Unforced
Capacity cleared as replacement capacity); (4) an adjustment, if required, to account for
Resource Make-Whole Payments for all actions previously conducted (excluding any Resource
Make-Whole Payments to be charged to the buyers of replacement capacity); and (5) an
adjustment, if required to provide sufficient revenue for payment of any PRD Credits; and (6) an
adjustment, if required, to reflect any changes in final Accredited UCAP for resources that are
counted as capacity in accordance with Tariff, Attachment DD, section 5.3(b). The Adjusted
Zonal Capacity Price may decrease if Unforced Capacity is decommitted or the Resource
Clearing Price decreases in an Incremental Auction.
iii)
The Office of the Interconnection shall calculate and post the Final Zonal
Capacity Price for each Delivery Year after the final auction is held for such Delivery Year, as
set forth above. The Final Zonal Capacity Price for each Zone shall equal the Adjusted Zonal
Capacity Price, as further adjusted to reflect any decreases in the Nominated Demand Resource
Value of any existing Demand Resource cleared in the Base Residual Auction, First Incremental,
or Second Incremental Auction.
g)
Resource Substitution Charge
Each Capacity Market Buyer in an Incremental Auction securing replacement
capacity shall pay a Resource Substitution Charge equal to the Capacity Resource Clearing Price
resulting from such auction multiplied by the megawatt quantity of Unforced Capacity purchased
by such Market Buyer in such auction.
h)
[Reserved for future use]
h-1)
[Reserved for future use]
h-2)
Minimum Offer Price Rule Effective with the 2023/2024 Delivery Year
(1)
Certification Requirement.
(A)
Except for any RBP Resources committed through the Reliability
Backstop Procurement, Bby no later than one hundred and fifty (150) days prior to the
commencement of the offer period of any RPM Auction conducted for the 2024/2025 Delivery
Year and all subsequent Delivery Years, and by the date posted on the PJM website for the
2023/2024 Delivery Year, each Capacity Market Seller must certify to the Office of
Interconnection for each Generation Capacity Resource and each applicable DER Capacity
Aggregation Resource the Capacity Market Seller intends to offer into the RPM Auction, in
accordance with the PJM Manuals:
(i) whether or not the Generation Capacity Resource is receiving or
expected to receive Conditioned State Support under any legislative or other governmental
policy or program that has been enacted or effective at the time of the certification; and
(ii) whether or not the Capacity Market Seller acknowledges and
understands that the Exercise of Buyer-Side Market Power is not permitted in RPM Auctions,
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and does not intend to submit a Sell Offer for their Generation Capacity Resource as an Exercise
of Buyer-Side Market Power.
(B)
All Capacity Market Sellers shall be responsible for the accuracy
of each certification and its conformance with the Tariff irrespective of any guidance developed
by the Office of the Interconnection and the Market Monitoring Unit.
(C)
Once a Capacity Market Seller has certified whether or not a
Generation Capacity Resource is receiving or expected to receive Conditioned State Support, the
certification requirements in subsection (A)(i) above do not apply and the status of such
Generation Capacity Resource will remain unchanged unless and until the Capacity Market
Seller (or a subsequent Capacity Market Seller of the underlying resource) that owns or controls
such Generation Capacity Resource provides a certification of a change in such status, the Office
of the Interconnection removes such status, or by FERC order. All Capacity Market Sellers shall
have an ongoing obligation to certify to the Office of Interconnection and the Market Monitoring
Unit a Generation Capacity Resource’s material change in status regarding whether such
resource is receiving or expected to receive Conditioned State Support within 30 days of such
material change. Nothing in this provision shall supersede the requirement for all Capacity
Market Sellers to certify to the Office of Interconnection pursuant to Tariff, Attachment DD,
section 5.14(h-2)(1)(A)(ii).
(2)
Determining Generation Capacity Resources Subject to the Minimum
Offer Price Rule.
(A)
Conditioned State Support.
(i) If the Office of the Interconnection reasonably believes a
government policy or program would provide Conditioned State Support or a Capacity Market
Seller certifies that it is receiving or is expected to receive Conditioned State Support associated
with a given Generation Capacity Resource, the Office of Interconnection shall submit, pursuant
to section 205 of the Federal Power Act, 16 U.S.C. § 824d, a filing at FERC indicating the Office
of the Interconnection’s intent to classify the government policy or program from which that
support is derived as Conditioned State Support (and adding such policy or program to the list in
Tariff, Attachment DD-3) and apply the Minimum Offer Price Rule to each Generation Capacity
Resource reasonably expected to receive such Conditioned State Support. If FERC has already
ruled on whether a specific government program or policy constitutes Conditioned State Support
and such policy or program is listed in Tariff, Attachment DD-3, the Office of the
Interconnection shall not be required to submit the filing described in the preceding sentence.
(ii) Government policies or programs that do not provide payments
or other financial benefit outside of PJM markets and do not provide payment or other financial
benefit in exchange for the sale of a FERC-jurisdictional product conditioned on clearing in any
RPM Auction do not constitute Conditioned State Support. Examples of such government
policies that do not constitute Conditioned State Support may include, but are not limited to:
policies designed to procure, incent, or require environmental attributes, whether bundled or
unbundled (e.g., Renewable Energy Credits, Zero Emission Credits; Regional Greenhouse Gas
Initiative); economic development programs and policies; tax incentives; state retail default
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service auctions; policies or programs that provide incentives related to fuel supplies; any
contract, legally enforceable obligation, or rate pursuant to the Public Utility Regulatory Policies
Act or any other state-administered federal regulatory program (e.g., Cross-State Air Pollution
Rule). In addition, Conditioned State Support shall not be determined solely based on the
business model of the Capacity Market Seller, such that the fact that a Self-Supply Entity is the
Capacity Market Seller, for example, is not a basis for determining Conditioned State Support.
(iii) Upon FERC acceptance (whether by order or operation of law)
that a government policy or program or contract with a state entity constitutes Conditioned State
Support, a Generation Capacity Resource for which a Capacity Market Seller certifies pursuant
to Tariff, Attachment DD, section 5.14(h-2)(1)(A)(i) that it is receiving Conditioned State
Support or is reasonably expected to receive such Conditioned State Support, as identified by the
Office of the Interconnection, with the advice and input of the Market Monitoring Unit, will be
subject to the provisions of the Minimum Offer Price Rule.
(B)
Exercise of Buyer-Side Market Power
(i) Except for a committed RBP Resource, Iif a Capacity Market
Seller does not certify that it acknowledges the prohibition of the Exercise of Buyer Side Market
Power and the Capacity Market Seller intends to exercise Buyer-Side Market Power for this
Generation Capacity Resource, then the underlying Capacity Resource shall be subject to the
MOPR pursuant to Tariff, Attachment DD, section 5.14(h-2)(1)(A)(i). If the Office of the
Interconnection and/or the Market Monitoring Unit reasonably suspects that a certification
submitted under Tariff, Attachment DD, section 5.14(h-2)(1)(A)(ii) contains fraudulent or
material misrepresentations such that the Capacity Market Seller’s Generation Capacity
Resource may be the subject of a Sell Offer that would be an Exercise of Buyer-Side Market
Power or otherwise reasonably suspects that a Generation Capacity Resource may be the subject
of a Sell Offer that would be an Exercise of Buyer-Side Market Power, the Office of the
Interconnection and/or the Market Monitoring Unit shall initiate a fact-specific review into the
facts and circumstances regarding the Generation Capacity Resource and whether the Capacity
Market Seller has the ability and incentive to exercise Buyer-Side Market Power with respect to
such Generation Capacity Resource. During such fact-specific review, the Capacity Market
Seller will have the opportunity to explain and justify why a Sell Offer for the Generation
Capacity Resource would not be an Exercise of Buyer-Side Market Power. The Office of the
Interconnection and/or the Market Monitoring Unit shall notify the Capacity Market Seller of the
bases for inquiry and initiation of review at least 135 days in advance of the RPM Auction
conducted for the 2024/2025 Delivery Year and all subsequent Delivery Years, and by the date
posted on the PJM website for the 2023/2024 Delivery Year.
In initiating a review, the Office of the Interconnection and/or the
Market Monitoring Unit shall provide the affected Capacity Market Seller, in writing, the basis
for its inquiry, including, but not limited to, the Generation Capacity Resource(s), and the
purported beneficiary of any price suppression. The Office of the Interconnection and/or the
Market Monitoring Unit may request from the Capacity Market Seller additional information and
documentation that is reasonably related to the basis for its inquiry, provided that, the Office of
the Interconnection and the Market Monitoring Unit shall confer with the Capacity Market Seller
in advance of any such requests. The Capacity Market Seller shall provide any additional
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supporting information and documentation requested by the Office of the Interconnection and/or
the Market Monitoring Unit, and any other information and documentation the Capacity Market
Seller believes may justify the conduct or action in question as not representing an Exercise of
Buyer-Side Market Power, within 15 days or other such timeline as agreed to in writing by the
Office of the Interconnection, Market Monitoring Unit and Capacity Market Seller.
The fact-specific review will determine, as necessary, whether a
Capacity Market Seller has the ability and incentive to submit a Sell Offer for the Generation
Capacity Resource that could be an Exercise of Buyer-Side Market Power, as follows:
(a) To determine whether a Capacity Market Seller may
have Buyer Side Market Power associated with the Generation Capacity Resource for the
applicable RPM Auction, the Office of the Interconnection and/or the Market Monitoring Unit
will perform ex-ante testing to determine the extent to which a shift in the supply curve by a
number of megawatts equal to the size of the Generation Capacity Resource would affect RPM
Auction clearing prices, where such analysis would reflect expected supply and demand
conditions in the region of the market clearing prices and quantities in recent RPM Auctions,
would reflect whether the relevant LDAs have been constrained in recent RPM Auctions, and
would reflect reasonably expected material changes in an LDA including the modeling of the
LDA and expected changes in supply and demand for the applicable Delivery Year. To the
extent the foregoing analyses show that the Generation Capacity Resource would have a material
effect on RPM Auction clearing prices, the Capacity Market Seller shall be deemed to have the
ability to exercise Buyer Side Market Power.
(b) To determine whether the Capacity Market Seller’s
submission of a Sell Offer at any given price level for such Generation Capacity Resource may
constitute an Exercise of Buyer-Side Market Power, the Office of the Interconnection and/or the
Market Monitoring Unit shall perform ex-ante testing to determine whether, given the ability to
suppress prices identified in the relevant LDAs and the PJM Region, such price suppression
would be economically beneficial to the Capacity Market Seller by comparing its expected cost
with its economic benefit, and where the expected cost shall reflect the excess economic costs of
the resource above expected market revenues, and the expected benefit shall reflect the expected
cost savings to the expected net short position (based on estimated capacity obligations and
owned and contracted capacity measured on a three-year average basis for the three years
starting with the first day of the Delivery Year associated with the RPM Auction in which the
Generation Capacity Resource is being offered) in the relevant LDAs and RTO multiplied by the
price change resulting from offering the resource uneconomically. In this analysis, the Office of
Interconnection and/or the Market Monitoring Unit shall consider whether any capacity
obligations in which the capacity costs based on RPM Auction clearing prices are directly passed
through to load and consider whether the price of any contracted capacity passes through RPM
Auction clearing prices. If the expected benefit outweighs the expected cost, the Capacity Market
Seller shall be deemed to have the incentive to exercise Buyer Side Market Power. If a resource
offer can be justified, economically or otherwise, without consideration of the benefit to the
Capacity Market Seller of the suppressed prices, the Capacity Market Seller shall be deemed not
to have the incentive to exercise Buyer Side Market Power with respect to that resource. Out-of-
market compensation (such as from renewable energy credits and zero emission credits) that are
not tied to either Conditioned State Support or a bilateral contract that directs the submission of
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an offer to lower market clearing prices may be used to support the economics of the resource
under review.
(ii) The following nonexhaustive list of circumstances would
preclude an inquiry into or determination regarding an Exercise of Buyer-Side Market Power in
the course of a review initiated pursuant to subsection (i) above: (a) the Generation Capacity
Resource is a merchant generation supply resources that is not contracted to an entity with a
Load Interest; (b) the Generation Capacity Resource is acquired by or under the contractual
control of the Capacity Market Seller through a competitive and non-discriminatory procurement
process open to new and existing resources; or (c) the Generation Capacity Resource is owned
by or bilaterally contracted to a Self-Supply Seller and such resource is demonstrated as
consistent with or included in the Self-Supply Seller’s long-range resource plan (e.g., a long-
range hedging plan) that is approved or otherwise reviewed and accepted by the RERRA,
provided that any such plan approval or contracts do not direct the submission of an uneconomic
offer to deliberately lower market clearing prices or for the Capacity Market Seller to otherwise
perform an Exercise of Buyer-Side Market Power. In addition, to the extent a Generation
Capacity Resource may receive compensation in support of characteristics aligned with well-
demonstrated customer preferences, such compensation shall not, in and of itself, be a basis for
the determination of Buyer-Side Market Power.
(iii) Based on the foregoing tests and fact-specific review,
including the facts and circumstances of the Generation Capacity Resource, the Office of the
Interconnection, with the advice and input of the Market Monitoring Unit, shall determine
whether a Generation Capacity Resource may be the subject of a Sell Offer that would be an
Exercise of Buyer-Side Market Power. If the Office of the Interconnection, with the advice and
input of the Market Monitoring Unit, determines that a Generation Capacity Resource may be
the subject of a Sell Offer that would be an Exercise of Buyer-Side Market Power or the
Capacity Market Seller certifies that it intends to exercise Buyer-Side Market Power, then such
resource will be subject to the provisions of the Minimum Offer Price Rule. If the resource will
be subject to the provisions of the Minimum Offer Price Rule, the Office of the Interconnection
shall include in the notice a written explanation for such determination. A Capacity Market
Seller that is dissatisfied with the Office of the Interconnection’s determination of whether a
given Generation Capacity Resource is subject to the Minimum Offer Price Rule may seek any
remedies available to it from FERC; provided, however, that the Office of the Interconnection
will proceed with administration of the Tariff and market rules based on its determination
hereunder unless FERC by order directs otherwise.
(C)
Failure to timely submit a certification. Any Generation Capacity
Resource for which a Capacity Market Seller has not timely submitted the certifications required
under Tariff, Attachment DD, section 5.14(h-2)(1) shall be subject to the provisions of the
Minimum Offer Price Rule. Notwithstanding the foregoing, if a Capacity Market Seller submits
a timely unit-specific exception pursuant to Tariff, Attachment DD, section 5.14(h-2)(4) for the
relevant Delivery Year, and PJM approves the unit-specific MOPR Floor Offer Price, then the
Capacity Market Seller may use such floor price regardless of whether it timely submitted the
foregoing certifications.
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(3)
Minimum Offer Price Rule. Any Sell Offer for a Generation Capacity
Resource that is subject to the provisions of the Minimum Offer Price Rule pursuant to Tariff,
Attachment DD, section 5.14(h-2)(2) shall have an offer price no lower than the applicable
MOPR Floor Offer Price, unless the applicable MOPR Floor Offer Price is higher than the
applicable Market Seller Offer Cap, in which circumstance the Capacity Market Seller, to
participate in an RPM Auction, must request a unit-specific value determined in accordance with
the unit-specific MOPR Floor Offer Price process, and the unit-specific MOPR Floor Offer Price
shall establish the offer level for such resource.
(A)
New Entry MOPR Floor Offer Price. For a Generation Capacity
Resource that is subject to the provisions of the Minimum Offer Price Rule pursuant to Tariff,
Attachment DD, section 5.14(h-2)(2) and for which a Sell Offer based on that resource, or any
uprate of such Generation Capacity Resource participating in the generation interconnection
process under Tariff, Part IV, Subpart A, that has not cleared an RPM Auction for any Delivery
Year, the applicable MOPR Floor Offer Price, based on the net cost of new entry for the
resource type, shall be, at the election of the Capacity Market Seller, (i) the unit-specific value
determined in accordance with the unit-specific MOPR Floor Offer Price process in Tariff,
Attachment DD, section 5.14(h-2)(4) below or (ii) if applicable, the default New Entry MOPR
Floor Offer Price for the applicable resource based on the gross cost of new entry values shown
in the table below, as adjusted for Delivery Years subsequent to the 2022/2023 or 2026/2027
Delivery Year, as applicable, net of estimated net energy and ancillary service revenues for the
resource type and Zone in which the resource is located.
Resource Type
Through the 2025/2026
Delivery Years:
Gross Cost of New Entry
(2022/2023 $/ MW-day)
(Nameplate)
For the 2026/2027 Delivery
Year and Subsequent Delivery
Years:
Gross Cost of New Entry
(2026/2027 $/ MW-day)
(Nameplate)
Nuclear
$2,000
$2,568
Coal
$1,068
$1,480
Combined Cycle
$320
$540
Combustion Turbine
$294
$394
Fixed Solar PV
$271
$298
Tracking Solar PV
$290
$321
Onshore Wind
$420
$438
Offshore Wind
$1,155
$1,351
Battery Energy Storage
$532
$502
The gross cost of new entry values in the table above are expressed in dollars per MW-day in
terms of nameplate megawatts. For purposes of submitting a Sell Offer, the gross cost of new
entry values must be converted to a net cost of new entry by subtracting the estimated net energy
and ancillary service revenues, as determined below, from the gross cost of new entry. However,
the resultant net cost of new entry of the battery energy storage resource type in the table above
must be multiplied by 2.5. The net cost of new entry based on nameplate capacity is then
converted to Unforced Capacity (“UCAP”) MW-day. For the 2023/2024 and 2024/2025
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Delivery Years, the net cost of new entry is adjusted using: for battery storage, wind, and solar
resource types, the applicable ELCC Class Rating; or for all other generation resource types, the
applicable class average EFORd. For the 2025/2026 Delivery Year and subsequent Delivery
Years, the net cost of new entry is adjusted by the applicable class average Accredited UCAP
Factor. The resulting default New Entry MOPR Floor Offer price in UCAP/MW-day terms shall
be applied to each MW offered for the Capacity Resource regardless of the actual Sell Offer
quantity and regardless of whether the Sell Offer is for a Seasonal Capacity Performance
Resource.
Commencing with the Base Residual Auction for the 2023/2024 Delivery Year, the Office of the
Interconnection shall adjust the default gross costs of new entry in the table above and post the
preliminary estimates of the adjusted applicable default New Entry MOPR Floor Offer Prices on
its website, by no later than one hundred fifty (150) days prior to the commencement of the offer
period for each Base Residual Auction. To determine the adjusted applicable default New Entry
MOPR Floor Offer Prices for all resource types, the Office of the Interconnection shall adjust the
gross costs of new entry utilizing, for combustion turbine and combined cycle resource types, the
same Applicable BLS Composite Index applied for such Delivery Year to adjust the CONE
value used to determine the Variable Resource Requirement Curve, in accordance with Tariff,
Attachment DD, section 5.10(a)(iv), and for all other resource types, the “BLS Producer Price
Index Turbines and Turbine Generator Sets” component of the Applicable BLS Composite Index
used to determine the Variable Resource Requirement Curve shall be replaced with the “BLS
Producer Price Index Final Demand, Goods Less Food & Energy, Private Capital Equipment”
when adjusting the gross costs of new entry. The resultant value shall then be then adjusted
further by a factor of 1.022 for nuclear, coal, combustion turbine, and combine cycle resource
types or 1.01 for solar, wind, and storage resource types to reflect the annual decline in bonus
depreciation scheduled under federal corporate tax law. Updated estimates of the net energy and
ancillary service revenues for each default resource type and applicable Zone, which shall
include, but are not limited to, consideration of Fuel Costs, Maintenance Adders and Operating
Costs, as applicable, pursuant to Operating Agreement, Schedule 2 shall then be subtracted from
the adjusted gross costs of new entry to determine the adjusted New Entry MOPR Floor Offer
Price. The net energy and ancillary services revenue is equal to the average of the annual net
revenues of the three most recent calendar years preceding the Base Residual Auction, where
such annual net revenues shall be determined in accordance with the following and the PJM
Manuals:
(i) for nuclear resource type, the net energy and ancillary services
revenue estimate shall be determined by the gross energy market revenue determined by the
product of [average annual zonal day-ahead LMP, times 8,760 hours times the annual average
equivalent availability factor of all PJM nuclear resources] minus the total annual cost to produce
energy determined by the product of [8,760 hours times the annual average equivalent
availability factor of all PJM nuclear resources times $9.02/MWh for a single unit plant or
$7.66/MWh for a multi-unit plant] where these hourly cost rates include fuel costs and variable
operation and maintenance expenses, inclusive of Maintenance Adder costs, plus an ancillary
services revenue of $3,350/MW-year to be included through the 2025/2026 Delivery Year;
(ii) for coal resource type, the net energy and ancillary services
revenue estimate shall be determined by a simulated dispatch of a 650 MW coal unit (with heat
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rate of 8,638 BTU/kWh and variable operations and maintenance variable operation and
maintenance expenses, inclusive of Maintenance Adder costs, of $9.50/MWh) using applicable
coal prices, as set forth in the PJM Manuals, plus reactive services revenue of $3,350/MW-year
to be included through the 2025/2026 Delivery Year. The unit is committed day-ahead in
profitable blocks of at least eight hours, and then committed in real-time for profitable hours if
not already committed day ahead;
(iii) for combustion turbine resource type, the net energy and
ancillary services revenue estimate shall be determined in a manner consistent with the
methodology described in Tariff, Attachment DD, section 5.10(a)(v)(B) for the Reference
Resource combustion turbine.
(iv) for combined cycle resource type, the net energy and ancillary
services revenue estimate shall be determined in the same manner as that prescribed for a
combustion turbine resource type, except that the heat rate assumed for the combined cycle
resource shall be 6,553 BTU/kwh, the variable operations and maintenance expenses for such
resource, inclusive of Maintenance Adder costs, shall be $2.11/MWh, the Peak-Hour Dispatch
scenario for both the Day-Ahead and Real-Time Energy Markets shall be modified to dispatch
the CC resource continuously during the full peak-hour period, as described in Peak-Hour
Dispatch, for each such period that the resource is economic (using the test set forth in such
section), rather than only during the four-hour blocks within such period that such resource is
economic, and the ancillary services revenue shall be $3,350/MW-year to be included through
the 2025/2026 Delivery Year.
(v) for solar PV resource type, the net energy and ancillary services
revenue estimate shall be determined using a solar resource model that provides the average MW
output level, expressed as a percentage of nameplate rating, by hour of day (for each of the 24-
hours of a day) and by calendar month (for each of the twelve months of a year). The annual net
energy market revenues are determined by multiplying the solar output level of each hour by the
real-time zonal LMP applicable to such hour with this product summed across all of the hours of
an annual period, plus an ancillary services revenue of $3,350/MW-year to be included through
the 2025/2026 Delivery Year. Two separate solar resource models are used, one model for a
fixed panel resource and a second model for a tracking panel resource;
(vi) for onshore wind resource type, the net energy and ancillary
services revenue estimate shall be determined using a wind resource model that provides the
average MW output level, expressed as a percentage of nameplate rating, by hour of day (for
each of the 24-hours of a day) and by calendar month (for each of the twelve months of a year).
The annual energy market revenues are determined by multiplying the wind output level of each
hour by the real-time zonal LMP applicable to such hour with this product summed across all of
the hours of an annual period, plus an ancillary services revenue of $3,350/MW-year to be
included through the 2025/2026 Delivery Year;
(vii) for offshore wind resource type, the net energy and ancillary
services revenue estimate shall be the product of [the average annual zonal real-time LMP times
8,760 hours times an assumed annual capacity factor of 45%], plus an ancillary services revenue
of $3,350/MW-year to be included through the 2025/2026 Delivery Year; and
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(viii) for Capacity Storage Resource, the net energy and ancillary
services revenue estimate shall be estimated by a simulated dispatch against historical real-time
zonal LMPs where the resource is assumed to be dispatched for the four hours of highest LMP of
a daily twenty-four hour period if the average LMP of these four hours exceeds 120% of the
average LMP of the four lowest LMP hours of the same twenty-four hour period. The net energy
market revenues will be determined by the product of [hourly output of 1 MW times the hourly
LMP for each hour of assumed discharging] minus the product of [hourly consumption of 1.2
MW times the hourly LMP for each hour of assumed charging] with this net value summed
across all of the hours of an annual period, plus an ancillary services revenue of $3,350/MW-year
to be included through the 2025/2026 Delivery Year. An 83.3% efficiency of the battery energy
storage resource is reflected by assuming each 1.0 MW of discharge requires 1.2 MW of charge.
Beginning with the Delivery Year that commences June 1, 2022, and continuing no later than for
every fourth Delivery Year thereafter, the Office of the Interconnection shall review the default
gross cost of new entry values. Such review may include, without limitation, analyses of the
fixed development, construction, operation, and maintenance costs for such resource types.
Based on the results of such review, PJM shall propose either to modify or retain the default
gross cost of new entry values stated in the table above. The Office of the Interconnection shall
post publicly and solicit stakeholder comment regarding the proposal. If, as a result of this
process, changes to the default gross cost of new entry values are proposed, the Office of the
Interconnection shall file such proposed modifications with the FERC by October 1, prior to the
conduct of the Base Residual Auction for the first Delivery Year in which the new values would
be applied.
Any Generation Capacity Resource that is subject to the provisions of the Minimum Offer Price
Rule pursuant to Tariff, Attachment DD, section 5.14(h-2)(2) and that has not previously cleared
an RPM Auction for that or any prior Delivery Year and for which there is no default MOPR
Floor Offer Price provided in accordance with this section, including hybrid resources, must seek
a unit-specific value determined in accordance with the unit-specific MOPR Floor Offer Price
process below to participate in an RPM Auction. Failure to obtain a unit-specific MOPR Floor
Offer Price will result in the Office of the Interconnection rejecting any Sell Offer based on such
resource for the relevant RPM Auction.
(B)
Cleared MOPR Floor Offer Prices.
For a Generation Capacity Resource that is subject to the
provisions of the Minimum Offer Price Rule pursuant to Tariff, Attachment DD, section 5.14(h-
2)(2) and for which a Sell Offer based on that resource has previously cleared an RPM Auction
for any Delivery Year, the applicable Cleared MOPR Floor Offer Price shall be, at the election of
the Capacity Market Seller, (a) based on the unit-specific MOPR Floor Offer Price, as
determined in accordance with Tariff, Attachment DD, section 5.14(h-2)(4) below, or (b) if
available, the default Avoidable Cost Rate for the applicable resource type shown in the table
below, as adjusted for Delivery Years subsequent for the 2022/2023 or 2026/2027 Delivery
Year, as applicable, to reflect changes in avoidable costs, net of projected PJM market revenues
equal to the resource’s historical net energy and ancillary service revenues consistent with Tariff,
Attachment DD, section 6.8(d).
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Existing Resource
Type
Through the
2025/2026 Delivery
Years:
Default Gross ACR
(2022/2023)
($/MW-day)
(Nameplate)
For the 2026/2027
Delivery Year and
Subsequent Delivery
Years:
Default Gross ACR
(2026/2027) ($/ MW-
day) Nameplate
Nuclear - single
$697
$591
Nuclear - dual
$445
$537
Coal
$80
$94
Combined Cycle
$56
$113
Combustion Turbine
$50
$52
Steam Oil & Gas
NA
$64
Solar PV
(fixed and tracking)
$40
$70
Wind Onshore
$83
$147
The default gross Avoidable Cost Rate values in the table above are expressed in dollars per
MW-day in terms of nameplate megawatts. Through the 2024/2025 Delivery Year, for purposes
of submitting a Sell Offer, the default Avoidable Cost Rate values must be net of estimated net
energy and ancillary service revenues, and then the difference is ultimately converted to
Unforced Capacity (“UCAP”) MW-day, where the UCAP MW-day value will be determined
based on the resource-specific Accredited UCAP value for solar and wind resource types (with
appropriate time-weighting for any winter Capacity Interconnection Rights) or the resource-
specific EFORd for all other generation resource types. Effective for the 2025/2026 Delivery
Year and subsequent Delivery Years, for purposes of submitting a Sell Offer, the default
Avoidable Cost Rate values must be net of estimated net energy and ancillary service revenues,
and then the difference is ultimately converted to Unforced Capacity (“UCAP”) MW-day, based
on the resource’s Accredited UCAP Factor. The resulting default Cleared MOPR Floor Offer
price in UCAP/MW-day terms shall be applied to each MW offered for the Capacity Resource
regardless of actual Sell Offer quantity and regardless of whether the Sell Offer is for a Seasonal
Capacity Performance Resource.
Commencing with the Base Residual Auction for the 2023/2024 Delivery Year, the Office of the
Interconnection shall adjust the default Avoidable Cost Rates in the table above, and post the
adjusted values on its website, by no later than one hundred fifty (150) days prior to the
commencement of the offer period for each Base Residual Auction. To determine the adjusted
Avoidable Cost Rates, the Office of the Interconnection shall utilize the 10-year average Handy-
Whitman Index in order to adjust the Gross ACR values to account for expected inflation.
Updated estimates of the net energy and ancillary service revenues shall be determined on a
resource-specific basis in accordance with Tariff, Attachment DD, section 6.8(d) and the PJM
Manuals.
Beginning with the Delivery Year that commences June 1, 2022, and continuing no later than for
every fourth Delivery Year thereafter, the Office of the Interconnection shall review the default
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Avoidable Cost Rates for Capacity Resource that is subject to the provisions of the Minimum
Offer Price Rule pursuant to Tariff, Attachment DD, section 5.14(h-2)(2) that have cleared in an
RPM Auction for any Delivery Year. Such review may include, without limitation, analyses of
the avoidable costs of such resource types. Based on the results of such review, PJM shall
propose either to modify or retain the default Avoidable Cost Rate values stated in the table
above. The Office of the Interconnection shall post publicly and solicit stakeholder comment
regarding the proposal. If, as a result of this process, changes to the default Avoidable Cost Rate
values are proposed, the Office of the Interconnection shall file such proposed modifications
with the FERC by October 1, prior to the conduct of the Base Residual Auction for the first
Delivery Year in which the new values would be applied.
Any Generation Capacity Resource that is subject to the provisions of the Minimum Offer Price
Rule pursuant to Tariff, Attachment DD, section 5.14(h-2)(2) and that has previously cleared an
RPM Auction for any Delivery Year and for which there is no default MOPR Floor Offer Price
provided in accordance with this section, including hybrid resources, must seek a unit-specific
value determined in accordance with the unit-specific MOPR Floor Offer Price process below to
participate in an RPM Auction. Failure to obtain a unit-specific MOPR Floor Offer Price will
result in the Office of the Interconnection rejecting any Sell Offer based on such resource.
(4)
Unit-Specific Exception. A Capacity Market Seller intending to submit a
Sell Offer in any RPM Auction for a Generation Capacity Resource that is subject to the
provisions of the Minimum Offer Price Rule below the applicable default MOPR Floor Offer
Price may, at its election, submit a request for a unit-specific exception for such Capacity
Resource. A Capacity Market Seller intending to submit a Sell Offer in any RPM Auction for a
Generation Capacity Resource that is under a fact-specific review for Buyer-Side Market Power
pursuant to Tariff, Attachment DD, section 5.14(h-2)(2)(B)(ii), and where the offer is below the
applicable default MOPR Floor Offer Price may, at its election, submit a request for a unit-
specific exception for such Generation Capacity Resource. A Sell Offer below the default
MOPR Floor Offer Price, but no lower than the unit-specific MOPR Floor Offer Price, shall be
permitted if the Capacity Market Seller obtains approval from the Office of the Interconnection
or the Commission, prior to the RPM Auction in which it seeks to submit the Sell Offer. The
unit-specific MOPR Floor Offer Price determined under this provision shall be based on the unit-
specific Accredited UCAP value for battery energy storage resource types and for solar and wind
generation resource types (appropriately time-weighted for any winter Capacity Interconnection
Rights) or on the unit-specific EFORd for all other generation resource types, and shall be
applied to each MW offered by the resource regardless of actual Sell Offer quantity and
regardless of whether the Sell Offer is for a Seasonal Capacity Performance Resource. Such Sell
Offer is permissible because it is consistent with the competitive, cost-based, fixed, net cost of
the resource. All supporting data must be provided for all requests. The following requirements
shall apply to requests for such determinations:
(A)
The Capacity Market Seller shall submit a written request with all
of the required documentation as described below and in the PJM Manuals. For such purpose,
the Capacity Market Seller shall submit the unit-specific exception request to the Office of the
Interconnection and the Market Monitoring Unit no later than one hundred twenty (120) days
prior to the commencement of the offer period for the RPM Auction in which it seeks to submit
its Sell Offer. For such purpose, the Office of the Interconnection shall post, by no later than one
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hundred fifty (150) days prior to the commencement of the offer period for the relevant RPM
Auction, a preliminary estimate for the relevant Delivery Year of the default Minimum Floor
Offer Prices, determined pursuant to Tariff, Attachment DD, sections 5.14(h-2)(3)(A) and (B). If
the final applicable default Minimum Floor Offer Price subsequently established for the relevant
Delivery Year is less than the Sell Offer, the Sell Offer shall be permitted and no exception shall
be required.
(B)
For a unit-specific exception for a Generation Capacity Resource
that is subject to the provisions of the Minimum Offer Price Rule pursuant to Tariff, Attachment
DD, section 5.14(h-2)(2) and that has never cleared an RPM Auction, the Capacity Market Seller
must include in its request for an exception under this subsection documentation to support the
fixed development, construction, operation, and maintenance costs of the Capacity Resource, as
well as estimates of offsetting net revenues.
The financial modeling assumptions for calculating Cost of New Entry for Generation Capacity
Resources shall be: (i) nominal levelization of gross costs, (ii) asset life of twenty years, (iii) no
residual value, (iv) all project costs included with no sunk costs excluded, (v) use first year
revenues (which may include revenues from the sale of renewable energy credits or any other
revenues outside of PJM markets that do not constitute Conditioned State Support ), and (vi)
weighted average cost of capital based on the actual cost of capital for the entity proposing to
build the Capacity Resource. Notwithstanding the foregoing, a Capacity Market Seller that seeks
to utilize an asset life other than twenty years (but no greater than 35 years) shall provide
evidence to support the use of a different asset life, including but not limited to, the asset life
term for such resource as utilized in the Capacity Market Seller’s financial accounting (e.g.,
independently audited financial statements), or project financing documents for the resource or
evidence of actual costs or financing assumptions of recent comparable projects to the extent the
seller has not executed project financing for the resource (e.g., independent project engineer
opinion or manufacturer’s performance guarantee), or opinions of third-party experts regarding
the reasonableness of the financing assumptions used for the project itself or in comparable
projects. Capacity Market Sellers may also rely on evidence presented in federal filings, such as
its FERC Form No. 1 or an SEC Form 10-K, to demonstrate an asset life other than 20 years of
similar asset projects.
Supporting documentation for project costs may include, as applicable and available, a complete
project description; environmental permits; vendor quotes for plant or equipment; evidence of
actual costs of recent comparable projects; bases for electric and gas interconnection costs and
any cost contingencies; bases and support for property taxes, insurance, operations and
maintenance (“O&M”) contractor costs, and other fixed O&M and administrative or general
costs; financing documents for construction-period and permanent financing or evidence of
recent debt costs of the seller for comparable investments; and the bases and support for the
claimed capitalization ratio, rate of return, cost-recovery period, inflation rate, or other
parameters used in financial modeling. In addition to the certification, signed by an officer of the
Capacity Market Seller, the request must include a certification that the claimed costs accurately
reflect, in all material respects, the seller’s reasonably expected costs of new entry and that the
request satisfies all standards for a unit-specific exception hereunder. The request also shall
identify all revenue sources (exclusive of any Conditioned State Support or bilateral contracts
that direct submission of an offer to lower RPM Auction clearing prices) relied upon in the Sell
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Offer to offset the claimed fixed costs, including, without limitation, long-term power supply
contracts, tolling agreements, evidence of compensation outside the PJM market not tied to
Conditioned State Support or a bilateral contract that directs submission of an offer to lower
RPM Auction clearing prices, or tariffs on file with state regulatory agencies, and shall
demonstrate that such offsetting revenues are consistent, over a reasonable time period identified
by the Capacity Market Seller, with the standard prescribed above. In making such
demonstration, the Capacity Market Seller may rely upon forecasts of competitive electricity
prices in the PJM Region based on well-defined models that include fully documented estimates
of future fuel prices, variable operation and maintenance expenses, which may include
Maintenance Adders, energy demand, emissions allowance prices, and expected environmental
or energy policies that affect the seller’s forecast of electricity prices in such region, employing
input data from sources readily available to the public. Documentation for net revenues also may
include, as available and applicable, plant performance and capability information, including
heat rate, start-up times and costs, forced outage rates, planned outage schedules, maintenance
cycle, fuel costs and other variable operations and maintenance expenses, and ancillary service
capabilities. Any evaluation of net revenues should be consistent with Operating Agreement,
Schedule 2, including, but not limited to, consideration of Fuel Costs, Maintenance Adders and
Operating Costs, as applicable.
(C)
For a Unit-Specific Exception for a Generation Capacity Resource
that is subject to the provisions of the Minimum Offer Price Rule pursuant to Tariff, Attachment
DD, section 5.14(h-2)(2) and that has previously cleared an RPM Auction, the Capacity Market
Seller shall submit a Sell Offer consistent with the unit-specific Market Seller Offer Cap process
pursuant to Tariff, Attachment DD, section 6.8; except that the 10% uncertainty adder may not
be included in the “Adjustment Factor.” In addition and notwithstanding the requirements of
Tariff, Attachment DD, section 6.8, the Capacity Market Seller may, at its election, include in its
request for an exception under this subsection documentation to support projected energy and
ancillary services markets revenues. Such a request shall identify all revenue sources (exclusive
of any Conditioned State Support or bilateral contracts that direct submission of an offer to lower
RPM Auction clearing prices) relied upon in the Sell Offer to offset the claimed fixed costs,
including, without limitation, long-term power supply contracts, tolling agreements, evidence of
compensation outside of PJM markets not tied to Conditioned State Support or a bilateral
contract that directs submission of an offer to lower RPM Auction clearing prices, or tariffs on
file with state regulatory agencies, and shall demonstrate that such offsetting revenues are
consistent, over a reasonable time period identified by the Capacity Market Seller, with the
standard prescribed above. In making such demonstration, the Capacity Market Seller may rely
upon forecasts of competitive electricity prices in the PJM Region based on well-defined models
that include fully documented estimates of future fuel prices, variable operation and maintenance
expenses, energy demand, which may include Maintenance Adders, and emissions allowance
prices, and expected environmental or energy policies that affect the seller’s forecast of
electricity prices in such region, employing input data from sources readily available to the
public. Documentation for net revenues also may include, as available and applicable, plant
performance and capability information, including heat rate, start-up times and costs, forced
outage rates, planned outage schedules, maintenance cycle, fuel costs and other variable
operations and maintenance expenses, and ancillary service capabilities. Any evaluation of
revenues should include, but would not be not limited to, consideration of Fuel Costs,
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Maintenance Adders and Operating Costs, as applicable, pursuant to Operating Agreement,
Schedule 2.
(D)
A Sell Offer evaluated at the unit-specific exception shall be
permitted if the information provided reasonably demonstrates that the Sell Offer’s competitive,
fixed, cost-based offer level is below the default MOPR Floor Offer Price, based on competitive
cost advantages relative to the costs estimated by the default MOPR Floor Offer Price, including,
without limitation, competitive cost advantages resulting from the Capacity Market Seller’s
business model, financial condition, tax status, access to capital or other similar conditions
affecting the applicant’s costs, or based on net revenues that are reasonably demonstrated
hereunder to be higher than those estimated by the default MOPR Floor Offer Price. Capacity
Market Sellers shall demonstrate that claimed cost advantages or sources of net revenue that are
irregular or anomalous, that do not reflect arm’s-length transactions, or that are not in the
ordinary course of the Capacity Market Seller’s business are consistent with the standards of this
subsection, and that out-of-market compensation is not tied to Conditioned State Support or a
bilateral contract that directs submission of an offer to lower RPM Auction clearing prices.
Failure to adequately support such claimed cost advantages or revenues so as to enable the
Office of the Interconnection to make the determination required in this section will result in the
elimination of consideration of the unsupported element(s) of a unit-specific exception by the
Office of the Interconnection.
(E)
The Capacity Market Seller must submit a sworn, notarized
certification of a duly authorized officer, certifying that the officer has personal knowledge of the
unit-specific exception request and that to the best of his/her knowledge and belief: (1) the
information supplied to the Market Monitoring Unit and the Office of Interconnection to support
its request for an exception is true and correct; (2) the Capacity Market Seller has disclosed all
material facts relevant to the request for the exception; and (3) the request satisfies the criteria for
the exception.
(F)
The Market Monitoring Unit shall review, in an open and
transparent manner with the Capacity Market Seller and the Office of the Interconnection, the
information and documentation in support of the request and shall provide its findings whether
the proposed Sell Offer is acceptable, in accordance with the standards and criteria hereunder, in
writing, to the Capacity Market Seller and the Office of the Interconnection by no later than
ninety (90) days prior to the commencement of the offer period for such auction. The Office of
the Interconnection shall also review, in an open and transparent manner, all exception requests
and documentation and shall provide in writing to the Capacity Market Seller, and the Market
Monitoring Unit, its determination whether the requested Sell Offer is acceptable and if not it
shall calculate and provide to such Capacity Market Seller, a minimum Sell Offer based on the
data and documentation received, by no later than sixty-five (65) days prior to the
commencement of the offer period for the relevant RPM Auction. After the Office of the
Interconnection determines with the advice and input of Market Monitor, the acceptable
minimum Sell Offer, the Capacity Market Seller shall notify the Market Monitoring Unit and the
Office of the Interconnection, in writing, of the minimum level of Sell Offer to which it agrees to
commit by no later than sixty (60) days prior to the commencement of the offer period for the
relevant RPM Auction, and in making such determination, the Capacity Market Seller may
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consider the applicable default MOPR Floor Offer Price and may select such default value if it is
lower than the unit-specific determination. A Capacity Market Seller that is dissatisfied with any
determination hereunder may seek any remedies available to it from FERC; provided, however,
that the Office of the Interconnection will proceed with administration of the Tariff and market
rules based on the lower of the applicable default MOPR Floor Offer Price and the unit-specific
determination unless and until ordered to do otherwise by FERC.
i)
Capacity Export Charges and Credits
(1)
Charge
Each Capacity Export Transmission Customer shall incur for each day of each Delivery Year a
Capacity Export Charge equal to the Reserved Capacity of Long-Term Firm Transmission
Service used for such export (“Export Reserved Capacity”) multiplied by (the Final Zonal
Capacity Price for such Delivery Year for the Zone encompassing the interface with the Control
Area to which such capacity is exported minus the Final Zonal Capacity Price for such Delivery
Year for the Zone in which the resources designated for export are located, but not less than
zero). If more than one Zone forms the interface with such Control Area, then the amount of
Reserved Capacity described above shall be apportioned among such Zones for purposes of the
above calculation in proportion to the flows from such resource through each such Zone directly
to such interface under CETO/CETL analysis conditions, as determined by the Office of the
Interconnection using procedures set forth in the PJM Manuals. The amount of the Reserved
Capacity that is associated with a fully controllable facility that crosses such interface shall be
completely apportioned to the Zone within which such facility terminates.
(2)
Credit
To recognize the value of firm Transmission Service held by any such Capacity Export
Transmission Customer, such customer assessed a charge under section 5.14(i)(1) above also
shall receive a credit, comparable to the Capacity Transfer Rights provided to Load-Serving
Entities under Tariff, Attachment DD, section 5.15. Such credit shall be equal to the locational
capacity price difference specified in section 5.14(i)(1) above times the Export Customer's
Allocated Share determined as follows:
Export Customer’s Allocated Share equals
(Export Path Import * Export Reserved Capacity) /
(Export Reserved Capacity + Daily Unforced Capacity Obligations of all LSEs in such Zone).
Where:
“Export Path Import” means the megawatts of Unforced Capacity imported into the export
interface Zone from the Zone in which the resource designated for export is located.
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If more than one Zone forms the interface with such Control Area, then the amount of Export
Reserved Capacity shall be apportioned among such Zones for purposes of the above calculation
in the same manner as set forth in subsection (i)(1) above.
(3)
Distribution of Revenues
Any revenues collected from the Capacity Export Charge with respect to any capacity export for
a Delivery Year, less the credit provided in subsection (i)(2) for such Delivery Year, shall be
distributed to the Load Serving Entities in the export-interface Zone that were assessed a
Locational Reliability Charge for such Delivery Year, pro rata based on the Daily Unforced
Capacity Obligations of such Load-serving Entities in such Zone during such Delivery Year. If
more than one Zone forms the interface with such Control Area, then the revenues shall be
apportioned among such Zones for purposes of the above calculation in the same manner as set
forth in subsection (i)(1) above.
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6.6
Offer Requirement for Capacity Resources
(a)
To avoid application of subsection (h) below, (1) all of the installed capacity of all
Existing Generation Capacity Resources located in the PJM Region, and (2) all of the RBP
UCAP MW that is committed in the Reliability Backstop Procurement through the term of the
commitment, shall be offered by the Capacity Market Seller that owns or controls all or part of
such resource (which may include submission as Self-Supply) in all RPM Auctions for each
Delivery Year, less any amount determined by the Office of the Interconnection to be eligible for
an exception to this RPM must-offer requirement, where installed capacity is determined as of
the date on which bidding commences for each RPM Auction pursuant to Tariff, Attachment
DD, section 5.6.6. Beginning with the 2025/2026 Delivery Year and subsequent Delivery Years,
a Planned Generation Capacity Resource associated with a notice of intent to offer submitted
pursuant to Tariff, Attachment DD, section 5.5 shall be required to be offered by the Capacity
Market Seller of such resource in the relevant RPM Auction. Through the 2024/2025 Delivery
Year, the Unforced Capacity of such resources is determined using the EFORd value that is
submitted by the Capacity Market Seller in its Sell Offer, which shall not exceed the maximum
EFORd for that resource as defined in section 6.6(b). Starting with the 2025/2026 Delivery Year,
the Unforced Capacity of such resource is determined using the effective Accredited UCAP
Factor for that resource. If a resource should be included on the list of Existing Generation
Capacity Resources subject to the RPM must-offer requirement that is maintained by the Market
Monitoring Unit pursuant to Tariff, Attachment M-Appendix, section II.C.1, but is omitted
therefrom whether by mistake of the Market Monitoring Unit or failure of the Capacity Market
Seller that owns or controls all or part of such resource to provide information about the resource
to the Market Monitoring Unit, this shall not excuse such resource from the RPM must-offer
requirement.
(b)
Through the 2024/2025 Delivery Year, for each Existing Generation Capacity
Resource, a potential Capacity Market Seller must timely provide to the Market Monitoring Unit
and the Office of the Interconnection all data and documentation required under this section 6.6
to establish the maximum EFORd applicable to each resource in accordance with standards and
procedures specified in the PJM Manuals. The maximum EFORd that may be used in a Sell
Offer for RPM Auctions held prior to the date on which the final EFORds used for a Delivery
Year are posted, is the greater of (i) the average EFORd for the five consecutive years ending on
the September 30 that last precedes the Base Residual Auction, or (ii) the EFORd for the 12
months ending on the September 30 that last precedes the Base Residual Auction.
Notwithstanding the foregoing, a Capacity Market Seller may request an alternate maximum
EFORd for Sell Offers submitted in such auctions if it has a documented, known reason that
would result in an increase in its EFORd, by submitting a written request to the Market
Monitoring Unit and Office of the Interconnection, along with data and documentation required
to support the request for an alternate maximum EFORd, by no later one hundred twenty (120)
days prior to the commencement of the offer period for the Base Residual Auction for the
applicable Delivery Year. The Capacity Market Seller must address any concerns identified by
the Market Monitoring Unit and/or the Office of the Interconnection regarding the data and
documentation provided and attempt to reach agreement with the Market Monitoring Unit on the
level of the alternate maximum EFORd by no later than ninety (90) days prior to the
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commencement of the offer period for the Base Residual Auction for the applicable Delivery
Year. As further described in Tariff, Attachment M-Appendix, section II.C, the Market
Monitoring Unit shall notify the Capacity Market Seller and the Office of the Interconnection in
writing of its determination of the requested alternate maximum EFORd by no later than ninety
(90) days prior to the commencement of the offer period for the Base Residual Auction for the
applicable Delivery Year. By no later than eighty (80) days prior to the commencement of the
offer period for the Base Residual Auction for the applicable Delivery Year, the Capacity Market
Seller shall notify the Office of the Interconnection and the Market Monitoring Unit in writing
whether it agrees with the Market Monitoring Unit on the alternate maximum EFORd or, if no
agreement has been reached, specifying the level of alternate maximum EFORd to which it
commits. If a Capacity Market Seller fails to request an alternate maximum EFORd prior to the
specified deadlines, the maximum EFORd for the applicable RPM Auction shall be deemed to be
the default EFORd calculated pursuant to this section.
The maximum EFORd that may be used in a Sell Offer for Third Incremental Auction, and for
Conditional Incremental Auctions held after the date on which the final EFORd used for a
Delivery Year is posted, is the EFORd for the 12 months ending on the September 30 that last
precedes the submission of such offers.
(c)
[Reserved for Future Use]
(d)
Through the 2024/2025 Delivery Year, in the event that a Capacity Market Seller
and the Market Monitoring Unit cannot agree on the maximum level of the alternate EFORd that
may be used in a Sell Offer for RPM Auctions held prior to the date on which the final EFORds
used for a Delivery Year are posted, the Office of the Interconnection shall make its own
determination of the maximum level of the alternate EFORd based on the requirements of the
Tariff and the PJM Manuals, per Tariff, Attachment DD, section 5.8, by no later than sixty-five
(65) days prior to the commencement of the offer period for the Base Residual for the applicable
Delivery Year, and shall notify the Capacity Market Seller and the Market Monitoring Unit in
writing of such determination.
(e)
Through the 2024/2025 Delivery Year, nothing in this section precludes the
Capacity Market Seller from filing a petition with FERC seeking a determination of whether the
EFORd complies with the requirements of the Tariff.
(f)
Through the 2024/2025 Delivery Year, notwithstanding the foregoing, a Capacity
Market Seller may submit an EFORd that it chooses for an RPM Auction held prior to the date
on which the final EFORd used for a Delivery Year is posted, provided that (i) it has participated
in good faith with the process described in this section 6.6 and in Tariff, Attachment M-
Appendix, section II.C, (ii) the offer is no higher than the level defined in any agreement reached
by the Capacity Market Seller and the Market Monitoring Unit that resulted from the foregoing
process, and (iii) the offer is accepted by the Office of the Interconnection subject to the criteria
set forth in the Tariff and the PJM Manuals.
(g)
A Capacity Market Seller that owns or controls an existing generation resource in
the PJM Region that is capable of qualifying as an Existing Generation Capacity Resource as of
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the date on which bidding commences for an RPM Auction may not avoid the rule in subsection
(a) or be removed from Capacity Resource status by failing to qualify as a Generation Capacity
Resource, or by attempting to remove a unit previously qualified as a Generation Capacity
Resource from classification as a Capacity Resource for that RPM Auction. However,
generation resource may qualify for an exception to the RPM must-offer requirement, as shown
by appropriate documentation, if the Capacity Market Seller that owns or controls such resource
demonstrates that it: (i) is reasonably expected to be physically unable to participate in the
relevant Delivery Year; (ii) has a financially and physically firm commitment to an external sale
of its capacity, or (iii) was interconnected to the Transmission System as an Energy Resource
and not subsequently converted to a Capacity Resource.
However, in any Delivery Year in which a Capacity Resource has committed RBP UCAP MW,
through the Reliability Backstop Procurement such Capacity Resource shall not be eligible for an
exception to the RPM must-offer requirement, under Tariff, Attachment DD, section 6.6A, based
on having a financially and physically firm commitment to an external sale of its capacity.
Notwithstanding the foregoing, nothing herein provides a defense to a claim of withholding,
market manipulation, or the exercise of market power by any entity who is affiliated with or are
under common ownership or control of a Capacity Market Seller that does not submit an offer
for a Generation Capacity Resource that obtains an exception to the capacity must-offer
requirement.
In order to establish that a resource is reasonably expected to be physically unable to
participate in the relevant auction as set forth in (i) above, the Capacity Market Seller must
demonstrate that:
A. It has a documented plan in place to retire the resource prior to or during the Delivery
Year, and has submitted a notice of Deactivation to the Office of the Interconnection
consistent with Tariff, Part V, section 113.1, without regard to whether the Office of the
Interconnection has requested the Capacity Market Seller to continue to operate the
resource beyond its desired deactivation date in accordance with Tariff, Part V, section
113.2 for the purpose of maintaining the reliability of the PJM Transmission System and
the Capacity Market Seller has agreed to do so;
B. Significant physical operational restrictions cause long term or permanent changes to the
installed capacity value of the resource, or the resource is under major repair that will
extend into the applicable Delivery Year, that will result in the imposition of RPM
performance penalties pursuant to Tariff, Attachment DD;
C. The Capacity Market Seller is involved in an ongoing regulatory proceeding (e.g. –
regarding potential environmental restrictions) specific to the resource and has received
an order, decision, final rule, opinion or other final directive from the regulatory authority
that will result in the retirement of the resource; or
D. A resource considered an Existing Generating Capacity Resource because it cleared an
RPM Auction for a Delivery Year prior to the Delivery Year of the relevant auction, but
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which is not yet in service, is unable to achieve full commercial operation prior to the
Delivery Year of the relevant auction. The Capacity Market Seller must submit to the
Office of the Interconnection and the Market Monitoring Unit a written sworn, notarized
statement of a corporate officer certifying that the resource will not be in full commercial
operation prior to the referenced Delivery Year.
In order to establish that a resource has a financially and physically firm commitment to
an external sale of its capacity as set forth in (ii) above, the Capacity Market Seller must
demonstrate that it has entered into a unit-specific bilateral transaction for service to load located
outside the PJM Region, by a demonstration that such resource is identified on a unit-specific
basis as a network resource under the transmission tariff for the control area applicable to such
external load, or by an equivalent demonstration of a financially and physically firm commitment
to an external sale. The Capacity Market Seller additionally shall identify the megawatt amount,
export zone, and time period (in days) of the export.
A Capacity Market Seller that seeks approval for an exception to the RPM must-offer
requirement, for any reason other than the reason specified in Paragraph A above, shall first
submit such request in writing, along with all supporting data and documentation, to the Market
Monitoring Unit for evaluation, notifying the Office of the Interconnection by copy of the same,
by no later than one hundred twenty (120) days prior to the commencement of the offer period
for the applicable RPM Auction.
In order to obtain an exception to the RPM must-offer requirement for the reason
specified in Paragraph A above, a Capacity Market Seller shall first submit a preliminary
exception request in writing, along with supporting data and documentation indicating the
reasons and conditions upon which the Capacity Market Seller is relying in its analysis of
whether to retire such resource, to the Market Monitoring Unit for evaluation, notifying the
Office of the Interconnection by copy of the same, by no later than (a) the September 1 that last
precedes the Base Residual Auction and (b) two hundred forty (240) days prior to the
commencement of the offer period for the applicable Incremental Auction. By no later than five
(5) Business Days after the notification deadline for any such preliminary exception requests, the
Office of the Interconnection will post on its website a summary of the number of megawatts of
Generation Capacity Resources for which it has received notification of preliminary exception
requests, on an aggregate basis by Zone and Locational Deliverability Area that comprises a
subset of a Zone, as specified in the PJM Manuals.
Thereafter, as applicable, such Capacity Market Seller shall by no later than (a) the
December 1 that last precedes the Base Residual Auction for the applicable Delivery Year, or (b)
one hundred twenty (120) days prior to the commencement of the offer period for the applicable
Incremental Auction, either (a) notify the Office of the Interconnection and the Market
Monitoring Unit in writing that it is withdrawing its preliminary exception request and
explaining the changes to its analysis of whether to retire such resource that support its decision
to withdraw, or (b) demonstrate that it has met the requirements specified under Paragraph A
above. By no later than five (5) Business Days after the notification deadline for such
notification, the Office of the Interconnection will post on its website a revised summary of the
number of megawatts of Generation Capacity Resources for which it has received requests for
exceptions to the RPM must-offer requirement for the reason specified in Paragraph A above, on
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an aggregate basis by Zone and Locational Deliverability Area that comprises a subset of a Zone,
as specified in the PJM Manuals.
A Capacity Market Seller that seeks to remove a Generation Capacity Resource from
Capacity Resource status shall first submit a preliminary request in writing, along with
supporting data and documentation indicating the reasons and conditions upon which the
Capacity Market Seller is relying in its analysis of whether to remove the Capacity Resource
status of such resource to the Market Monitoring Unit for evaluation, notifying the Office of the
Interconnection by copy of the same, by no later than (a) the September 1 that last precedes the
Base Residual Auction, and (b) two hundred forty (240) days prior to the commencement of the
offer period for the applicable Incremental Auction. By no later than five (5) Business Days
after the notification deadline for any such preliminary requests, the Office of the
Interconnection will post on its website a summary of the number of megawatts of Generation
Capacity Resources for which it has received notification of preliminary requests, on an
aggregate basis by Zone and Locational Deliverability Area that comprises a subset of a Zone, as
specified in the PJM Manuals.
Thereafter, as applicable, such Capacity Market Seller shall, by no later than (a) the
December 1 that last precedes the Base Residual Auction for the applicable Delivery Year, or (b)
one hundred twenty (120) days prior to the commencement of the offer period for the applicable
Incremental Auction, notify the Office of the Interconnection and the Market Monitoring Unit in
writing that it is either (a) withdrawing its preliminary request and explaining the changes to its
analysis that support its decision to withdraw, or (b) confirming its preliminary decision to
remove the Generation Capacity Resource from Capacity Resource status. By no later than five
(5) Business Days after the notification deadline for such notification, the Office of the
Interconnection will post on its website a revised summary of the number of megawatts of
Generation Capacity Resources for which it has received requests to remove its Capacity
Resource status, on an aggregate basis by Zone and Locational Deliverability Area that
comprises a subset of a Zone, as specified in the PJM Manuals.
The Market Monitoring Unit shall analyze the effects of the proposed removal of a
Generation Capacity Resource from Capacity Resource status with regard to potential market
power issues and shall notify the Capacity Market Seller and the Office of the Interconnection in
writing of its determination of the request to remove the Generation Capacity Resource from
Capacity Resource status, and whether a market power issue has been identified, by no later than
ninety (90) days prior to the commencement of the offer period for the applicable RPM Auction.
Such notice shall include the specific market power impact resulting from the proposed removal
of the Generation Capacity Resource from Capacity Resource status, as well as an initial
assessment of any steps that could be taken to mitigate the market power impact.
A Capacity Market Seller may only remove the Generation Capacity Resource from
Capacity Resource status if (i) the Market Monitoring Unit has determined that the Generation
Capacity Resource meets the applicable criteria set forth in Tariff, Attachment DD, sections
5.6.6 and this section 6.6 and the Office of the Interconnection agrees with this determination, or
(ii) the Commission has issued an order terminating the Capacity Resource status of the resource,
or (iii) it is required as set forth in Tariff, Attachment DD, section 6.6A(c). Any RBP Resource
committed through the Reliability Backstop Procurement shall not be allowed to remove
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Capacity Resource status for the portion of the resource with committed RBP UCAP MW
through the term of such commitment. Nothing herein shall require a Market Seller to offer its
resource into an RPM Auction prior to seeking to remove a resource from Capacity Resource
status, subject to satisfaction of this section 6.6. A Generation Capacity Resource that is
removed from Capacity Resource status shall no longer qualify as an Existing Generation
Capacity Resource, and the Capacity Interconnection Rights associated with such facility shall
be subject to termination in accordance with the rules described in Tariff, Part VI, section
230.3.3. The Office of the Interconnection shall amend the applicable Interconnection Service
Agreement or wholesale market participation agreement to reflect any such removal of the
Capacity Interconnection Rights, and shall report the amended agreement to the Commission in
the same manner as the original (e.g., FERC filing or Electronic Quarterly Reports). The Office
of the Interconnection shall file the amended agreement unexecuted if the Interconnection
Customer or wholesale market participant does not sign the amended Interconnection Service
Agreement or wholesale market participation agreement.
If the Capacity Market Seller disagrees with the Market Monitoring Unit’s determination
of its request to remove a resource from Capacity Resource status or its request for an exception
to the RPM must-offer requirement, it must notify the Market Monitoring Unit in writing, with a
copy to the Office of the Interconnection, of the same by no later than eighty (80) days prior to
the commencement of the offer period for the applicable RPM Auction. After the Market
Monitoring Unit has made its determination of whether a resource may be removed from
Capacity Resource status, or whether the resource meets one of the exceptions thereto, and has
notified the Capacity Market Seller and the Office of the Interconnection of the same pursuant to
Tariff, Attachment M-Appendix, section II.C.4, the Office of the Interconnection shall approve
or deny the request. The request shall be deemed to be approved by the Office of the
Interconnection, consistent with the determination of the Market Monitoring Unit, unless the
Office of the Interconnection notifies the Capacity Market Seller and Market Monitoring Unit,
by no later than sixty-five (65) days prior to the date on which the offer period for the applicable
RPM Auction commences, that the request is denied.
If the Market Monitoring Unit does not timely notify the Capacity Market Seller and the
Office of the Interconnection of its determination of the request to remove a Generation Capacity
Resource from Capacity Resource status or for an exception to the RPM must-offer requirement,
the Office of the Interconnection shall make the determination whether the request shall be
approved or denied, and will notify the Capacity Market Seller of its determination in writing,
with a copy to the Market Monitoring Unit, by no later than sixty-five (65) days prior to the date
on which the offer period for the applicable RPM Auction commences.
After the Market Monitoring Unit and the Office of the Interconnection have made their
determinations of whether a resource meets the criteria to qualify for an exception to the RPM
must-offer requirement, the Capacity Market Seller must notify the Market Monitoring Unit and
the Office of the Interconnection whether it intends to exclude from its Sell Offer some or all of
the subject capacity on the basis of an identified exception by no later than sixty-five (65) days
prior to the date on which the offer period for the applicable RPM Auction commences. PJM
does not make determinations of whether withholding of capacity constitutes market power. A
Generation Capacity Resource that does not qualify for submission into an RPM Auction
because it is not owned or controlled by the Capacity Market Seller for a full Delivery Year is
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not subject to the offer requirement hereunder; provided, however, that a Capacity Market Seller
planning to transfer ownership or control of a Generation Capacity Resource during a Delivery
Year pursuant to a sale or transfer agreement entered into after March 26, 2009 shall be required
to satisfy the offer requirement hereunder for the entirety of such Delivery Year and may satisfy
such requirement by providing for the assumption of this requirement by the transferee of
ownership or control under such agreement.
If a Capacity Market Seller doesn’t timely seek to remove a Generation Capacity
Resource from Capacity Resource status or timely submit a request for an exception to the RPM
must-offer requirement, the Generation Capacity Resource shall only be removed from Capacity
Resource status, and may only be approved for an exception to the RPM must-offer requirement,
upon the Capacity Market Seller requesting and receiving an order from FERC, prior to the close
of the offer period for the applicable RPM Auction, directing the Office of the Interconnection to
remove the resource from Capacity Resource status and/or granting an exception to the RPM
must-offer requirement or a waiver of the RPM must-offer requirement as to such resource.
(h)
Any existing generation resource located in the PJM Region that satisfies the
criteria in the definition of Existing Generation Capacity Resource as of the date on which
bidding commences for the Base Residual Auction for a Delivery Year, that is not offered into
such Base Residual Auction, and that does not meet any of the exceptions stated in the prior
subsection (g): (i) may not participate in any subsequent Incremental Auctions conducted for
such Delivery Year; (ii) shall not receive any payments under Tariff, Attachment DD, section
5.14 for such Delivery Year for the capacity of such Generation Capacity Resources; and (iii)
shall not be permitted to satisfy any LSE’s Unforced Capacity Obligation, or any entity’s
obligation to obtain the commitment of Capacity Resources, for such Delivery Year.
All generation resources located in the PJM Region that satisfy the criteria in the
definition of Existing Generation Capacity Resource as of the date on which bidding commences
for an Incremental Auction for a particular Delivery Year, but that did not satisfy such criteria as
of the date that on which bidding commenced in the Base Residual Auction for that Delivery
Year, that is not offered into that Incremental Auction, and that does not meet any of the
exceptions stated in the prior subsection (g): (i) may not participate in any subsequent
Incremental Auctions conducted for such Delivery Year; (ii) shall not receive any payments
under Tariff, Attachment DD, section 5.14 for such Delivery Year for the capacity of such
Generation Capacity Resources; and (iii) shall not be permitted to satisfy any LSE’s Unforced
Capacity Obligation, or any entity’s obligation to obtain the commitment of Capacity Resources,
for such Delivery Year.
Any Planned Generation Capacity Resource associated with a notice of intent to offer
into a particular RPM Auction that is not offered into the associated RPM Auction and all
Existing Generation Capacity Resources that are offered into a Base Residual Auction or
Incremental Auction for a particular Delivery Year but do not clear in such auction, that are not
offered into each subsequent Incremental Auction, and that do not meet any of the exceptions
stated in the prior subsection (g): (i) may not participate in any Incremental Auctions conducted
for such Delivery Year subsequent to such failure to offer; (ii) shall not receive any payments
under Tariff, Attachment DD, section 5.14 for such Delivery Year for the capacity of such
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Generation Capacity Resources; and (iii) shall not be permitted to satisfy any LSE’s Unforced
Capacity Obligation, or any entity’s obligation to obtain the commitment of Capacity Resources,
for such Delivery Year.
Any such Existing Generation Capacity Resources may also be subject to further action
by the Market Monitoring Unit under the terms of Tariff, Attachment M and Tariff, Attachment
M – Appendix.
(i)
In addition to the remedies set forth in subsections (g) and (h) above, if the
Market Monitoring Unit determines that one or more Capacity Market Sellers’ failure to offer
part or all of one or more existing generation resources, for which the Office of the
Interconnection has not approved an exception to the RPM must-offer requirement, into an RPM
Auction as required by this Section 6.6 would result in an increase of greater than five percent in
any Zonal Capacity Price determined through such auction, and the Office of the Interconnection
agrees with that determination, the Office of the Interconnection shall apply to FERC for an
order, on an expedited basis, directing such Capacity Market Seller to participate in the relevant
RPM Auction, or for other appropriate relief, and PJM will postpone clearing the auction
pending FERC’s decision on the matter. If the Office of the Interconnection disagrees with the
Market Monitoring Unit’s determination and does not apply to FERC for an order directing the
Capacity Market Seller to participate in the auction or for other appropriate relief, the Market
Monitoring Unit may exercise its powers to inform Commission staff of its concerns and to seek
appropriate relief.
(j)
An RBP Resource committed through the Reliability Backstop Procurement must
offer all available committed RBP UCAP MW as a price-taker (i.e., $0/MW-day) into the
applicable RPM Auctions pursuant to the capacity must offer requirements and exceptions set
forth in Tariff, Attachment DD, sections 6.6 and 6.6A. The applicable RPM Auctions shall be
the Base Residual Auctions and Incremental Auctions conducted after an RBP Resource’s RBP
UCAP MW have been committed through the Reliability Backstop Procurement and continuing
for each subsequent Delivery Year through the end of the fixed 15-year term, except RBP UCAP
MW for RBP Resources without a notice of intent to offer submitted pursuant to Tariff,
Attachment DD, section 5.5 for the 2029/2030 Base Residual Auction, which shall have a must
offer requirement beginning in the next RPM Auction, including but not limited to the
2030/2031 Base Residual Auction and the 2029/2030 Second Incremental Auction .
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6.6A Offer Requirement for Capacity Performance Resources
(a)
The installed capacity of every Existing Generation Capacity Resource located in
the PJM Region that is capable (or that reasonably can become capable) of qualifying as a
Capacity Performance Resource shall be offered as a Capacity Performance Resource by the
Capacity Market Seller that owns or controls all or part of such resource (which may include
submission as Self-Supply) in all RPM Auctions for each such Delivery Year, less any amount
determined by the Office of the Interconnection to be eligible for an exception to the Capacity
Performance Resource must-offer requirement, where installed capacity is determined as of the
date on which bidding commences for each RPM Auction pursuant to Tariff, Attachment DD,
section 5.6.6. A Planned Generation Capacity Resource associated with a notice of intent to
offer submitted pursuant to Tariff, Attachment DD, section 5.5 shall be required to be offered by
the Capacity Market Seller of such resource in the relevant RPM Auction.
(b)
Determinations of EFORd, Accredited UCAP, and Unforced Capacity made
under this Tariff, Attachment DD, section 6.6 as to a Generation Capacity Resource shall govern
the offers required under this section as to the same Generation Capacity Resource.
(c)
Exceptions to the requirement in subsection (a) shall be permitted only for a
resource which the Capacity Market Seller demonstrates is reasonably expected to be physically
incapable of satisfying the requirements of a Capacity Performance Resource. Through the
2025/2026 Delivery Year, Intermittent Resources, Capacity Storage Resources, Hybrid
Resources consisting exclusively of components that in isolation would be Intermittent
Resources or Capacity Storage Resources, Demand Resources, and Energy Efficiency Resources
shall not be required to offer as a Capacity Performance Resource, but shall not be precluded
from being offered as a Capacity Performance Resource at a level that demonstrably satisfies
such requirements. Beginning with the 2026/2027 Delivery Year, Demand Resources shall not
be required to offer as a Capacity Performance Resource, but shall not be precluded from being
offered as a Capacity Performance Resource at a level that demonstrably satisfies such
requirements. Notwithstanding the foregoing, nothing herein provides a defense to a claim of
withholding, market manipulation, or the exercise of market power by any entity who is
affiliated with or are under common ownership or control of a Capacity Market Seller that does
not offer Demand Resources into a Reliability Pricing Model Auction. Exceptions shall be
determined using the same timeline and procedures as specified in section 6.6.
Effective with the 2023/2024 Delivery Year, Capacity Market Sellers seeking an
exception for a Base Residual Auction on the basis that a resource is incapable of meeting the
Capacity Performance Resource requirement shall include a documented plan with the
submission of their request showing the steps the Capacity Market Seller intends to pursue for
the resource to become physically capable of satisfying the requirements of a Capacity
Performance Resource. Such plan shall include (i) a timeline for design, permitting,
procurement, and construction milestones, as applicable, where such timeline shall not exceed
one Base Residual Auction exception, and (ii) evidence of corporate commitment (e.g., an SEC
filing, a press release, or a letter from a duly authorized corporate officer indicating intent to
make such investment). Periodic updates on the progress, shall be provided by the Capacity
Market Seller to the Office of the Interconnection and the Market Monitoring Unit for their
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review by no later than (i) one hundred twenty (120) days prior to the commencement of the
offer period for subsequent Incremental Auctions for the applicable Delivery Years, and (ii) the
December 1 that last precedes subsequent Base Residual Auctions. The Capacity Market Seller
shall also immediately notify the Office of the Interconnection and the Market Monitoring Unit
of any material changes to the plan that may occur. Upon request by a Capacity Market Seller, a
one year extension to the plan timeline shall be permissible only for delays not caused by the
Capacity Market Seller, and that could not have been remedied through the exercise of due
diligence by the Capacity Market Seller. In no event may an exception be requested by the
Capacity Market Seller for more than two Base Residual Auctions.
Failure to submit a documented plan, or lack of good faith effort by a Capacity Market
Seller to make an Existing Generation Capacity Resource physically capable of meeting the
requirements of a Capacity Performance Resource in accordance with a documented plan, shall
result in the removal of the resource’s Capacity Resource status effective with the first future
Delivery Year for which the resource was granted an exception, no earlier than the 2023/2024
Delivery Year. The Office of the Interconnection shall amend the applicable Interconnection
Service Agreement or wholesale market participation agreement to reflect any such removal of
the Capacity Interconnection Rights, and shall report the amended agreement to the Commission
in the same manner as the original (e.g. FERC Filing or Electronic Quarterly Reports). The
Office of the Interconnection shall file the amended agreement unexecuted if the Interconnection
Customer or wholesale market participant does not sign the amended Interconnection Service
Agreement or wholesale market participation agreement. The required change in Capacity
Resource status shall only apply to those Generation Capacity Resources that are shown to be
physically incapable of satisfying the requirements of a Capacity Performance Resource.
(d)
A resource not exempted or excepted under subsection (c) hereof that is capable
of qualifying as a Capacity Performance Resource and does not offer into an RPM Auction as a
Capacity Performance Resource shall be subject to the same restrictions on subsequent offers,
and other possible remedies, as specified in section 6.6.
(e)
An RBP Resource committed through the Reliability Backstop Procurement must
offer all committed RBP UCAP MW as price-takers (i.e., $0/MW-day) into the applicable RPM
Auctions pursuant to the capacity must offer requirements and exceptions set forth in Tariff,
Attachment DD, sections 6.6 and 6.6A. The applicable RPM Auction shall be the Base Residual
Auctions conducted after an RBP Resource’s RBP UCAP MW have been committed through the
Reliability Backstop Procurement and continuing for each subsequent Delivery Year through the
end of the fixed 15-year term, except RBP UCAP MW for Capacity Performance Resources
without a notice of intent to offer submitted pursuant to Tariff, Attachment DD, section 5.5 for
the 2029/2030 Base Residual Auction, which shall have a must offer requirement beginning in
the next RPM Auction, including but not limited to the 2030/2031 Base Residual Auction and
the 2029/2030 Second Incremental Auction.
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16.
RELIABILITY BACKSTOP
16.1. Purpose
The Reliability Backstop provides a mechanism to resolve reliability criteria violations caused
by: (a) lack of sufficient capacity committed through the Reliability Pricing Model Auctions; or
(b) near-term transmission deliverability violations identified after the Base Residual Auction is
conducted. These backstop mechanisms are intended to guarantee that sufficient generation,
transmission and demand response solutions will be available to preserve system reliability. The
backstop mechanisms are based on specific triggers that signal a need for a targeted solution to a
reliability problem that was not resolved by the long-term commitment of Capacity Resources
through Self-Supply or the Reliability Pricing Model Auctions.
16.2
Investigation of Capacity Shortfall
Beginning with the 2032/2033 Delivery Year and thereafter, iIf the total Unforced Capacity of
Capacity Resources committed for a Delivery Year following the Base Residual Auction equates
to an installed reserve margin that is more than one percentage point lower than the approved
PJM Region Installed Reserve Margin, the Office of the Interconnection shall investigate the
cause for the shortage, and recommend corrective action, including, without limitation, adjusting
the Cost of New Entry to the extent determined necessary by such investigation, or addressing
other barriers to entry identified by such investigation. No Reliability Backstop Auction will be
conducted to address such a shortfall unless it occurs in the Base Residual Auctions for three
consecutive Delivery Years beginning with the 2032/2033 Delivery Year and thereafter.
16.3
Triggering Conditions
a)
Either of the following two conditions will trigger reliability backstop measures
provided in this section, as described below:
i)
If the total Unforced Capacity of all Capacity Resources committed
through Self-Supply or the Base Residual Auctions for three consecutive Delivery Years
beginning with the 2032/2033 Delivery Year and thereafter, equates to an installed reserve
margin that is more than one percentage point lower than the approved PJM Region Installed
Reserve Margin, the Office of the Interconnection will declare a capacity shortage and make a
filing with FERC for approval to conduct a Reliability Backstop Auction. Upon receipt of such
approval, the Office of the Interconnection will conduct a Reliability Backstop Auction in
accordance with ection 16.4 below.
ii)
If the total Unforced Capacity of all Base Load Generation Resources
committed in a Base Residual Auction for a Delivery Year is less than the forecasted minimum
hourly load calculated by the Office of the Interconnection for such Delivery Year, the Office of
the Interconnection will investigate the cause of shortfall. If such a shortfall occurs in the Base
Residual Auctions for three consecutive Delivery Years beginning with the 2032/2033 Delivery
Year and thereafter, the Office of the Interconnection shall declare a capacity shortage and make
a filing with FERC for approval to conduct a Reliability Backstop Auction. Upon receipt of such
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approval, the Office of the Interconnection will conduct a Reliability Backstop Auction in
accordance with section 16.4 below.
b)
In addition to the foregoing events that trigger reliability backstop measures, if a
near-term, i.e., later in time than the conduct of the Base Residual Auction for a Delivery Year,
transmission criteria violation caused by an announced generation resource deactivation is
identified by the regional transmission reliability planning analysis performed by the Office of
the Interconnection in accordance with Part V of this Tariff, the Office of the Interconnection
will identify the necessary transmission upgrade. In accordance with such rules, such generation
resource may remain in service until the transmission upgrade is installed. No Reliability
Backstop Auction will be conducted.
16.4. Reliability Backstop Auction
a)
Scope of Auction
The Office of the Interconnection shall conduct each Reliability Backstop Auction to commit
additional Generation Capacity Resources, or in the case of an auction triggered by section
16.3(a)(ii), additional Base Load Generation Resources to the PJM Region to resolve the system-
wide reliability criteria violation that triggered the need for such auction. Capacity Resources
committed in a Reliability Backstop Auction for a Delivery Year shall not include any Planned
Generation Capacity Resources previously committed in the Base Residual Auction for such
Delivery Year. The Reliability Backstop Auction shall obtain commitments of additional
Generation Capacity Resources (or, as applicable, additional Base Load Generation Resources)
for a term of up to fifteen (15) Delivery Years. If a Reliability Backstop Auction is required, the
offer period for such auction shall commence, subject to FERC approval as specified above, no
later than four months after the Base Residual Auction in which the third consecutive Capacity
Resource shortfall occurs. Upon verification and notification by the PJM Board of Managers that
a Reliability Backstop Auction is required, the Office of the Interconnection shall post
notification that a Reliability Backstop Auction is to be held. Upon such notification, the offer
period shall commence, and shall remain open for six (6) months. PJMSettlement shall be the
Counterparty to the capacity transaction resulting from committed Capacity Resources clearing
the Reliability Backstop Auction.
b)
Sell Offers
Each Sell Offer shall specify the following information, as further specified in the PJM Manuals:
•
the minimum price in $/MW-day required by the Capacity Market Seller to
provide additional Unforced Capacity from a Generation Capacity Resource (or
from a Base Load Generation Resource, in the case of an auction triggered by
section 16.3(a)(ii)) above;
•
the megawatts of Unforced Capacity to be provided by such resource;
•
the specific location of the proposed plant;
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•
all information required from a Generation Interconnection Customer by Tariff,
Part IV and the PJM Manuals;
•
general plant technical specifications, as specified in the PJM Manuals;
•
the term of cost recovery (“Backstop Period”) requested, not to exceed 15 years;
and
•
the first full Delivery Year for which such resource shall be available, which shall
also be the first year of the Backstop Period.
Each Generation Capacity Resource (or Base Load Generation Resource) accepted in a
Reliability Backstop Auction shall comply with the procedures for new generation
interconnection in Tariff, Part IV, and each such resource shall be responsible for satisfying all
capability and deliverability requirements for Capacity Resources, pursuant to the Reliability
Assurance Agreement.
c)
Submission of Sell Offers
The Sell Offer period shall begin at 00:01 Eastern Prevailing Time on the date specified by the
Office of the Interconnection in the notification posting and shall end at 23:59 Eastern Prevailing
Time six calendar months after such date. Sell offers shall be submitted during such period in
writing to the Office of the Interconnection, and shall conform to the submission procedures as
specified in the PJM Manuals. The Office of the Interconnection shall confirm in writing the
receipt of each Sell Offer, within two weeks after receipt of each such offer.
d)
Posting of Information by the Office of the Interconnection
Upon notification by the PJM Board of Managers that a Reliability Backstop Auction will be
conducted, the Office of the Interconnection shall post the following information:
•
System condition that necessitates a Reliability Backstop Auction;
•
Megawatt quantity of Unforced Capacity required from additional Generation
Capacity Resources, or from additional Base Load Generation Resources;
•
Date by which the resources must be capable of delivering Unforced Capacity;
•
Any other required specifications for the additional Unforced Capacity sought
through such auction.
e)
Conduct of the Reliability Backstop Auction
i)
Auction Clearing Procedure
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The Reliability Backstop Auction shall select the Sell Offer or combination of Sell Offers that
that satisfies the requirements posted by the Office of the Interconnection at the lowest offer
price(s). If more than one Sell Offer must be selected to satisfy the specified requirements, the
Sell Offers shall be selected in rank order from lowest offer price to highest offer price until the
requirement is satisfied. In the event two or more Sell Offers specify the same offer price, and
fewer than all of such offers are needed to satisfy the specified requirements, the Office of the
Interconnection shall select the Sell Offer(s) proposing Generation Capacity Resource(s), or, as
applicable, Base Load Generation Resource(s) that will best satisfy overall reliability
requirements for the PJM Region, as determined by the Office of the Interconnection using
transmission reliability analysis.
ii)
Market Settlement
Pursuant to the agreement specified below, each Capacity Market Seller submitting a Sell Offer
that is accepted in a Reliability Backstop Auction shall be paid by PJMSettlement the offer price
in such Sell Offer for each MW-day in the Backstop Period, less any payments the Capacity
Market Seller is entitled to receive pursuant to Tariff, Attachment DD, section 5 as a result of
Sell Offers submitted with respect to such Generation Capacity Resource in any Base Residual
Auction or Incremental Auction, including, without limitation, payments of Capacity Resource
Clearing Prices (including for Self-Supply) and Resource Make-Whole Payments; and less any
payments the Capacity Market Seller is entitled to receive for energy or ancillary services
pursuant to Operating Agreement, Schedule 1 with respect to services provided by such resource,
net of the Variable Operations and Maintenance costs of such resource, as determined in
accordance with the PJM Manuals.
PJM shall recover the costs of any such payments to Capacity Market Sellers for such resources
through a charge, in addition to the Locational Reliability Charge, assessed on all LSEs in the
PJM Region, pro rata based on each such LSE’s Daily Unforced Capacity Obligations in all
LDAs in which such LSE serves load. PJMSettlement shall be the Counterparty to the LSE’s
obligation to pay, and payment of, such charges.
iii)
Standard Contract Provisions
PJMSettlement, will enter into an agreement with each Capacity Market Seller that submitted an
accepted Sell Offer in any Reliability Backstop Auction providing for the payments specified
above. Such agreement shall include the provisions and address the standards set forth in section
16.4(b) above, and shall include such other terms and conditions as are customary in the
industry, as specified in the PJM Manuals.
f)
FERC Approval
Any such agreement shall provide that it shall be filed with FERC as a rate schedule pursuant to
section 205 of the Federal Power Act, and that the effectiveness of such agreement shall be
conditioned on receipt of FERC acceptance or approval of such agreement.
16.5
Must Offer into Base Residual Auction
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All Capacity Market Sellers submitting a Sell Offer that is selected in a Reliability Backstop
Auction must offer all Unforced Capacity of the Generation Capacity Resource underlying such
Sell Offer into the Base Residual Auctions conducted subsequent to the Reliability Backstop
Auction for all Delivery Years in the Backstop Period. The Market Seller shall offer the
Unforced Capacity of such resources into each such auction at zero price, and shall receive the
Capacity Resource Clearing Price as determined in each such auction.
16.6
Reliability Backstop Resource Deficiency Charges
(a)
Any Capacity Market Seller that submits a Sell Offer that was selected in a
Reliability Backstop Auction and that is not able to deliver in a Delivery Year all megawatts of
Unforced Capacity specified in the selected Sell Offer, shall not receive any payments that such
Capacity Market Seller otherwise would have been eligible to receive for such Delivery Year
pursuant to the Reliability Backstop Auction.
(b)
Any Capacity Market Seller that submits a Sell Offer that was selected in a
Reliability Backstop Auction and that fails to deliver all megawatts of Unforced Capacity
specified in the selected Sell Offer at any time during the Backstop Period specified in such Sell
Offer must refund all payments received by such Market Seller pursuant to section 16.4(b)
above.
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18.
RELIABILITY BACKSTOP PROCUREMENT
The Reliability Backstop Procurement or “RBP” is a one-time procurement, starting in 2026, to
address resource adequacy challenges in the PJM Region arising from insufficient capacity
committed through Reliability Pricing Model Auctions starting in the 2027/2028 Delivery Year.
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18.1 Determination of Final RBP Target
The Reliability Backstop Procurement is designed to procure sufficient RBP UCAP MW to meet
the Final RBP Target.
(a)
Initial RBP Target
The Initial RBP Target shall be a region-wide value equal to the UCAP MW quantity PJM clears
short of the PJM Region Reliability Requirement for the 2028/2029 Delivery Year Base Residual
Auction.
(b)
Final RBP Target
The Final RBP Target shall be a PJM region-wide value equal to the Initial RBP Target minus
the total PJM region-wide Qualifying RBP Offset UCAP MW and the unforced capacity
obligation value of load that have successfully requested and obtained an opt-out pursuant to
Tariff, Attachment DD, section 18.1(d).
(c)
Fixed Resource Requirement Entities
Fixed Resource Requirement (“FRR”) Entities as of the 2028/2029 Delivery Year shall be
excluded from the Reliability Backstop Procurement, including Initial and Final RBP Targets.
To the extent an Electric Distributor zone/area that has RBP UCAP MW committed through the
Reliability Backstop Procurement later becomes an FRR Service Area pursuant to RAA,
Schedule 8.1.D, the Electric Distributor zone/area shall continue to be accountable for the RBP
UCAP MW quantity committed through the Reliability Backstop Procurement.
(d)
Opt-Out
When calculating the Final RBP Target, the Initial RBP Target shall also be decremented where
the Electric Distributor’s zone/area has rates that are not regulated by the states and is unable to
address cost allocation associated with capacity procured in the backstop. Such request by the
Electric Distributor shall specify the associated MW quantity of load in the zone/area that will be
opted-out of the Initial RBP Target and be accompanied by supporting documentation
demonstrating an inability to address cost allocation associated with capacity procured in the
backstop, along with written support for such opt-out from the relevant state governor, RERRA,
and interconnection customer(s). The Initial RBP Target shall be further decremented, if
requested by an Electric Distributor, by up to the associated MW quantity of load that
participates in a peak shaving adjustment program where such Electric Distributor’s zone/area
addresses their capacity needs through peak shaving adjustment programs that are codified in
state law and that also meet the requirements of Tariff, Attachment DD-2.
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18.2
Qualifying RBP Offset UCAP MW
(a)
Qualifying RBP Offset UCAP MW is capacity that (i) has not previously
supported a capacity commitment or been committed in an FRR Plan as of the commencement of
the Reliability Backstop Procurement; and (ii) is supplied by a resource that satisfies each of the
criteria set forth in Tariff, Attachment DD, section 18.2(b).
(b)
Resources Eligible to Supply Qualifying RBP Offset UCAP MW
A resource eligible to supply Qualifying RBP Offset UCAP MW must have an expected
commercial operation date, or is reasonably expected to be an Annual Demand Resource or DER
Capacity Aggregation Resource that will be registered with the Office of the Interconnection and
under a contract to perform based on PJM dispatch instructions, by no later than June 1, 2032
and be: (i) a new build generation resource including new resources that obtain Capacity
Interconnection Rights transferred from deactivated resources or resources that have announced
deactivation as of April 10, 2026; (ii) the incremental capacity created by an uprate of existing
Generation Capacity Resources, but only to the extent such incremental capacity is created
through an increase in such Generation Capacity Resource’s installed capacity and increase in
Capacity Interconnection Rights associated with that Generation Capacity Resource; (iii) the
incremental capacity created by the utilization of Surplus Interconnection Service; (iv)
repowering of a deactivated generation resource that deactivated prior to April 10, 2026; (v)
incremental capacity, whether due to greater Unforced Capacity or a higher level of Capacity
Interconnection Rights, created by an existing Generation Capacity Resource’s changing fuel
type to a more efficient fuel type; or (vi) Planned Demand Resource or Planned DER Capacity
Aggregation Resources, as described in the RAA, Schedule 6 and Schedule 6.2.
(c)
Evidence of Qualifying RBP Offset UCAP MW
During the RBP bid submission window defined in Tariff, Attachment DD, section 18.4, Electric
Distributors shall report the Qualifying RBP Offset UCAP MW in their respective zones/areas to
the Office of the Interconnection in accordance with their requirements set forth in the Operating
Agreement, section 11.3, and such report shall be accompanied by evidence of at least one of the
following supporting materials. Likewise, to the extent LSEs, interconnecting customers, large
loads, Transmission Owners, or other entities report Qualifying RBP Offset UCAP MW to the
Office of the Interconnection during such RBP bid submission window, the reported Qualifying
RBP Offset UCAP MW must be accompanied with evidence of at least one of the following
supporting materials:
(i)
Signed bilateral contracts for Qualifying RBP Offset UCAP MW for at
least five Delivery Years with a commercial operation date prior to the start of the
2032/2033 Delivery Year, and matched with load that has an executed electric service
agreement or transmission service agreement, indicating that the load will be coming
online in the 2027/2028 or 2028/2029 Delivery Year;
(ii)
Self-Supply generation that is in a Relevant Electric Retail Regulatory
Authority (“RERRA”)-approved or accepted integrated resource plan with either
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associated generation in the PJM interconnection queue or signed bilateral contracts for
Qualifying RBP Offset UCAP MW for at least five Delivery Years with a commercial
operation date prior to the start of the 2032/2033 Delivery Year, and matched with load
that has an executed electric service agreement or transmission service agreement,
indicating that the load will be coming online in the 2027/2028 or 2028/2029 Delivery
Year; or
(iii)
Signed commitment between a Curtailment Service Provider or DER
Aggregator and new load(s) that has an executed electric service agreement or
transmission service agreement, indicating that the new load(s) will, in a MW quantity
equal to MW quantity of the new load(s), either (a) participate as Annual Demand
Resources or DER Capacity Aggregation Resources starting in the 2028/2029 Delivery
Year Second Incremental Auction and continuing through the 2032/2033 Delivery Year,
or (b) purchase replacement Qualifying RBP Offset UCAP MW that are eligible
generation or storage resources.
(d)
To determine the quantity of any Qualifying RBP Offset UCAP MW that are
verified by the Office of the Interconnection and used to decrement the Initial RBP Target, the
Office of the Interconnection shall use the applicable ELCC Class Ratings from the Base
Residual Auction associated with the 2028/2029 Delivery Year, or the estimated unit-specific
UCAP value for resources with no ELCC Class Rating.
(e)
The total quantity of Qualifying RBP Offset UCAP MW verified by the Office of
the Interconnection and used to decrement the Initial RBP Target total amount allowed for each
zone/area will be capped at the Load Adjustment for each Electric Distributor zone/area amount
of summer 2028 demand as set forth in the load forecast.
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18.3
Cost Allocation of RBP Charges, Credits, and Shortfall Charges
(a)
Cost Allocation to Electric Distributor zone/area
The Office of the Interconnection shall allocate the Initial RBP Target MW to each Electric
Distributor’s zone/area using that zone/area’s pro-rata share of the difference between the
forecasted Load Adjustments for the 2026/2027 Delivery Year and the 2028/2029 Delivery Year.
The difference between the forecasted Load Adjustments for the 2026/2027 and the 2028/2029
Delivery Years shall be reduced for the purpose of this calculation to the extent:
(i)
an Electric Distributor, LSE, Transmission Owner, or other entity provides
the Office of Interconnection with evidence of Qualifying RBP Offset UCAP MW, in
accordance with Tariff, Attachment DD, section 18.2 and as may be further set forth in
the PJM Manuals; or
(ii)
an Electric Distributor zonee/area meets one of the opt-out provisions set
forth in accordance with Tariff, Attachment DD, section 18.1(d).
The resulting reduced MW, floored at zero, is used to calculate the zone/area’s assigned pro-rata
share of the Final RBP Target MW. The zone/area’s assigned share of the Final RBP Target
MW shall remain constant throughout the fixed, 15-year term.
The Office of the Interconnection shall allocate the total RBP Charges, assessed daily, to an
Electric Distributor’s zone/area on a pro-rata basis using the zone/area’s assigned share of the
total Final RBP Target MW across all zone/areas.
(b)
Cost Allocation to Load Serving Entities
(i)
The daily assessed RBP Charges allocated to each Electric Distributor
zone/area shall be further allocated to each applicable LSE within that zone/area with an
RBP Obligation (“RBO”) based on the LSE’s pro-rata share of the total RBP Obligation
MW for the zone/area.
(ii)
The RBP Charge assessed daily to an LSE in a zone/area shall be the
LSE’s daily reported RBO MW in the zone/area divided by the total RBO MW in the
zone/area multiplied by total, daily RBP Charges allocated to the zone/area.
(iii)
The RBO MW shall be, where available, the state and/or RERRA-
determined allocation of cleared RBP UCAP MW to LSEs within each Electric
Distributor’s zone/area, as reported by each Electric Distributor to the Office of the
Interconnection, with the initial allocation reported no later than sixty (60) days prior to
the 2028/2029 Delivery Year. If no RBO MW are reported to the Office of the
Interconnection in an Electric Distributor zone/area, PJM will allocate the RBP Charges
for that zone/area to all load in the zone/area using each LSE’s ratio share of the Daily
Unforced Capacity Obligation for the zone/area as determined in RAA, Schedule 8.
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PJMSettlement shall be the Counterparty to each LSE’s obligation to pay, and payments
of, RBP Charges.
(iv)
RBP Shortfall Charges will be allocated to LSEs as credits based on using
the same pro-rata share of the RBP Charges, pursuant to RAA, Section 7.2B.
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18.4 Scope of the Reliability Backstop Procurement
The Office of the Interconnection shall conduct an RBP to commit RBP Resources up to the
UCAP MW value to meet the Final RBP Target. The Reliability Backstop Procurement offer
submission window for RBP Sell Offers shall open for three weeks in 2026. The clearing and
selection process will take place thereafter and concluding six weeks following the close of the
offer submission window. The Office of the Interconnection shall notify RBP Sellers that
receive a commitment as an RBP Resource as soon as practicable upon the conclusion of the
RBP. The Office of the Interconnection shall post specific dates on the PJM website prior to the
commencement of the Reliability Backstop Procurement.
RBP Sellers may submit RBP Sell Offers of RBP Resources supporting RBP UCAP MW into
the Reliability Backstop Procurement. PJMSettlement shall be the Counterparty to the
transactions arising from the RBP.
An RBP Sell Offer will be considered binding once any PJM-identified deficiencies are cured
and until the conclusion of the Reliability Backstop Procurement and the underlying resource
does not receive a commitment in the Reliability Backstop Procurement.
The Reliability Backstop Procurement shall offer commitments for RBP UCAP MW for a fixed
period of fifteen (15) Delivery Years, starting with the 2028/2029 Delivery Year. Resources
with a commercial operation date later than the 2028/2029 Delivery Year shall be committed for
the remainder of the fifteen-year term of the Reliability Backstop Procurement commitment
period, i.e. through the end of the 2042/2043 Delivery Year.
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18.5 The Reliability Backstop Procurement Process
(a)
RBP Seller Eligibility to Participate and General Requirements for Resources
Supporting RBP UCAP MW
To be eligible to participate in the Reliability Backstop Procurement, an RBP Seller must meet
the RBP credit requirements, set forth in Tariff, Attachment DD, section 18.8, with RBP Sell
Offer(s) for RBP UCAP MW based on a resource that:
(i)
Has a commercial operation date, or is reasonably expected to be an
Annual Demand Resource or DER Capacity Aggregation Resource that will be registered
with the Office of the Interconnection and under a contract to perform based on PJM
dispatch instructions, by no later than June 1, 2032, inclusive of any required Network
Upgrades;
(ii)
Has not received a capacity commitment or been committed in an FRR
Plan as of the commencement of the Reliability Backstop Procurement;
(iii)
Is not supplying Qualifying RBP Offset UCAP MW;
(iv)
To the extent the subject of a notice of intent for the 2028/2029 Base
Residual Auction, must have offered and not cleared in the 2028/2029 Base Residual
Auction;
(v)
To the extent the subject of a notice of intent for the 2029/2030 Base
Residual Auction, must be offered into the 2029/2030 Base Residual Auction; and
(vi)
Meets the requirements in Tariff, Attachment DD, sections 18.5(b),
18.5(c), or 18.5(d).
(b)
Generation or Energy Storage Resources as an RBP Resource
To qualify as an RBP Resource, a generation or Energy Storage Resource that supplies RBP
UCAP MW eligible to be offered into the Reliability Backstop Procurement shall be in the PJM
Region or meet the requirements to pseudo-tie into the PJM Region in Tariff, Attachment DD,
section 5.5A(b), must meet the requirements of Tariff, Attachment DD, section 18.5(a) and must
be:
(i)
Composed of new Installed Capacity and new Maximum Facility Output;
(ii)
Supported by new Capacity Interconnection Rights (if located in the PJM
Region) or Capacity Interconnection Rights transferred from a deactivated resource or a
resource that announced deactivation as of April 10, 2026; and
(iii)
Consist of (1) new build; (2) incremental capacity created by an uprate of
an existing Generation Capacity Resource’s or Energy Storage Resource’s installed
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capacity and associated level of Capacity Interconnection Rights; or (3) repowering of a
generation resource that had deactivated, or announced deactivation, on or before April
10, 2026.
(c)
RBP Demand Resources
To qualify as a Demand Resource that supplies RBP UCAP MW eligible to be offered into the
Reliability Backstop Procurement, a Demand Resource must meet the requirements of Tariff,
Attachment DD, sections 18.5(a), and:
(i)
Not be reliant on or composed of registered location(s) that previously
supported a Demand Resource that provided capacity in a prior Delivery Year unless
such location represents an incremental increase in capacity resulting from an investment
in new generation or new storage resources at that location; and
(ii)
Identify, as part of its RBP Sell Offer, for the full length of the fixed term,
the location(s) and associated participation contract(s).
(d)
RBP DER Aggregation Resources
To qualify as a DER Capacity Aggregation Resource that supplies RBP UCAP MW eligible to
be offered into the Reliability Backstop Procurement, a Planned DER Capacity Aggregation
Resource must meet the requirements of Tariff, Attachment DD, sections 18.5(b) and:
(i)
Identify, as part of its RBP Sell Offer, for the length of the fixed term, the
location(s) and associated participation contract(s).
(e)
RBP Sell Offers
RBP Sell Offers for RBP UCAP MW shall specify an offer quantity in UCAP MW and an offer
price in $/MW-day UCAP for each Delivery Year beginning with the first full Delivery Year in
which the RBP UCAP MW is expected to provide capacity through the end of the fixed 15-year
term.
RBP Sellers will be responsible for all actual Network Upgrade costs as determined through the
interconnection process, without subsequent adjustments to RBP Sell Offers.
Each RBP Sell Offer shall include the following information for the RBP UCAP MW offered:
(i)
the MW of UCAP to be provided by such resource for each Delivery Year,
where the maximum UCAP included in an RBP Sell Offer shall be limited to no greater
than 120% of the resource type’s most recent maximum Preliminary ELCC Class Ratings
for 2028/2029 through the last posted Delivery Year or based on the resource’s maximum
estimated unit-specific ELCC ratings across such period for resources with no ELCC
Class Rating, multiplied by the resource’s ICAP;
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(ii)
the price in $/MW-day UCAP for each Delivery Year beginning with the
first full Delivery Year in which the RBP UCAP MW is expected to provide capacity
through the end of the fixed 15-year term;
(iii)
the first full Delivery Year for which such resource shall be available and
offering to provide capacity;
(iv)
all relevant documentation necessary for the Office of the Interconnection
to evaluate whether the project satisfies the gating criteria, as set forth in Tariff,
Attachment DD, section 18.5(f)(i).
(f)
Clearing Structure
Following the closing date of bid solicitation for the Reliability Backstop Procurement in
October 2026, the Office of the Interconnection shall complete the Reliability Backstop
Procurement in two stages: (1) gating criteria evaluation and (2) selection assessment, with
notification of finalized commitments posted prior to the Base Residual Auction for the
2029/2030 Delivery Year. The Reliability Backstop Procurement shall be pay-as-bid.
(i)
Stage 1: Gating Criteria Evaluation
A valid RBP Sell Offer shall include the information and evidence required by this
section. The Office of the Interconnection shall evaluate all RBP Sell Offers for
compliance with this requirement. Such evaluation shall be conducted by the Office of
the Interconnection on a pass/fail basis.
RBP Sell Offers that do not include the following information shall not proceed to
selection assessment, provided, however, that the Office of the Interconnection shall
provide the RBP Seller the opportunity to cure any identified deficiencies within five (5)
calendar days. Notwithstanding, such opportunity to cure shall not extend past the close
of the bid submission window of the Reliability Backstop Procurement.
RBP Sell Offers for RBP Generation and/or Storage Capacity Resources must be
accompanied by:
(1)
A critical path construction schedule and expected commercial
operation date, with attestation, for the Office of the Interconnection to validate
that RBP Sell Offers are for RBP UCAP MW with a feasible commercial
operation date of June 1, 2032 or earlier;
(A)
With respect to a project in Transition Cycle #2 under
Tariff, Part VII and earlier, such project must provide study information
and timeline from its most current PJM study;
(B)
With respect to a project in Cycle 1 under Tariff Part VIII,
the Expedited Interconnection Track under Tariff, Part X, or not under
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study, the project must provide study information and timeline from an
independent consultant report;
(2)
Evidence of 100% Site Control for each of the Generating Facility
(including the location of the main step-up transformer), the Interconnection
Facilities, and the Interconnection Switchyard (as defined in the PJM Manuals)
for a term of at least three years from the date of submission of the Application.
In addition, a certification, executed by an officer or authorized representative of
the Generation Project Developer, verifying that the Site Control requirements
have been met. Further, at Transmission Provider’s request, Generation Project
Developer shall provide copies of landowner attestations or county recordings.
The Site Control requirements include an acreage requirement for the Project, as
set forth in the PJM Manuals.
Evidence of site control shall be consistent with Tariff, Part VIII, Subpart A,
section 402;
(3)
Financing plan, i.e., identified financing sources and details (e.g.,
project financing, balance sheets, tax equity, sponsor equity), current status of any
financing commitments or term sheets, and a general description of the capital
structure and expected timeline to financial close;
(4)
Permitting plan, e.g., a list of all applicable permits, current status,
and timeline to obtain each;
(5)
Signed memorandum for the acquisition of major equipment,
invoices or agreements to acquire major equipment, or other documentary
evidence that major equipment has been procured;
(6)
Evidence of experience having constructed a previous project of
similar size and technology or have contracted with an engineering, procurement,
and construction partner with such experience, or contract with an engineering,
procurement, and construction partner with such experience;
(7)
For natural gas-fueled generation resources, evidence of delivery
infrastructure arrangements in the form of a notice of intent or attestation of
pipeline capacity expansion to support the new project; and
(8)
For generation and/or energy storage resources located outside of
the PJM Region, evidence of (a) a completed facilities study or equivalent under
the host Regional Transmission Organization/Independent System Operator’s or
utility’s interconnection process and (b) long-term firm point-to-point
transmission service, or a confirmed transmission service request with a
completed system impact study, sufficient to deliver capacity to the border of the
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PJM Region consistent with the requirements of Tariff, Attachment DD, section
5.5A(b).
RBP Sell Offers for Demand Resources or DER Capacity Aggregation Resources must
be accompanied by:
(9)
Locations within the PJM Region by Zone/Sub-zonal LDA and
aggregate capacity for RBP Sell Offers;
(10)
Executed customer agreements or binding commitments covering
the proposed RBP UCAP MW commitment, with identified locations, customer
names, and expected curtailment/injection capability per site; and
(11)
Equipment procurement plan or evidence of deployed enabling
infrastructure such as metering, telemetry, load control, SCADA/dispatch
systems, or DER major equipment as applicable.
RBP Sell Offers for DER Capacity Aggregation Resources must also be accompanied by:
(12)
Applicable Electric Distributor interconnection/distribution impact
study requirements and a plan to initiate on a timeline consistent with the
proposed delivery date.
RBP Sell Offers for Demand Resources must also be accompanied by:
(13)
Electric Distributor coordination requirements for metering,
telemetry, and baseline measurement infrastructure.
(ii)
Stage 2: Selection Assessment
All RBP Sell Offers that pass the gating criteria evaluation shall be evaluated based on
the first Delivery Year offered in the RBP Sell Offer, levelized cost, and RBP UCAP
MW quantity.
RBP Sell Offers shall be selected in rank order from earliest to latest offered Delivery
Year, and then in least-cost order based on the levelized cost ($/MW-day) of UCAP MW
over the fixed 15-year term, until the Final RBP Target is satisfied for any Delivery Year
up through the 2032/2033 Delivery Year. RBP Resources shall not be partially cleared.
In selecting the least-cost solution that satisfies the Final RBP Target and the cost of
procurement constraint, the Office of the Interconnection may commit an RBP Sell Offer
with an offered quantity that exceeds the remaining Final RBP Target to the extent such
solution provides greater economic efficiency than an alternative solution that satisfies
the requirements and constraints.
The levelized cost of each RBP Sell Offer shall be calculated as:
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Levelized Cost ($/MW-day) = Net Present Value (RBP Sell Offer price x UCAP
offered)/Net Present Value (UCAP offered)
with a discount rate equal to 9.5% after-tax average weighted average cost of capital
(ATWACC).
The MW-weighted average of the levelized procurement cost of all selected RBP Sell
Offers shall not exceed $555/MW-day UCAP.
In the event that two or more RBP Sell Offers with the same initial offered Delivery Year
and levelized cost, and fewer than all of such offers are needed to satisfy the Final RBP
Target, the Office of the Interconnection shall select the RBP Sell Offer(s) proposing
resources based on the earliest timestamp of such RBP Sell Offer(s).
In the event that the Reliability Backstop Procurement cannot meet the Final RBP Target,
the Reliability Backstop Procurement shall clear short of the Final RBP Target.
(g)
Settlement Structure
(i)
UCAP MW Eligible to Be Settled as Contract for Difference
Each RBP Resource that has been committed in the Reliability Backstop Procurement
shall be individually settled as a contract for difference (“CfD”).
An RBP Resource’s total daily MW eligible to be settled as a CfD shall be the lesser of
the RBP Resource’s daily committed RBP UCAP MW, daily owned UCAP MW, and
daily cleared RPM UCAP MW.
All UCAP MW of an RBP Resource above the committed RBP UCAP MW shall be
eligible to participate in RPM Auctions, subject to existing RPM rules, without being
subject to RBP obligations or settlement.
(ii)
RBP Settlement Credits Based on Contract for Difference
An RBP Resource’s contract for difference (“CfD”), represented as positive or negative
RBP Settlement Credits, shall be settled daily as the product of the total daily UCAP MW
eligible to settle as CfD and the difference between the price at which the RBP Resource
was committed in the Reliability Backstop Procurement for a Delivery Year and the RBP
Resource’s unit-specific weighted average resource clearing price of all applicable RPM
Auctions from the associated Delivery Year. Applicable RPM Auctions include all RPM
Auctions for the associated Delivery Year that are conducted after the Reliability
Backstop Procurement. If the RBP Resource is committed through the RBP for a
Delivery Year in which PJM has already conducted the Base Residual Auction, the CfD
will be settled using the difference between the price at which the RBP Resource was
committed in the Reliability Backstop Procurement for such Delivery Year and the
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weighted average resource clearing price in the applicable Incremental Auction(s) for
such Delivery Year.
(iii)
RBP Charges
RBP Charges shall be based on the total RBP Settlement Credits, positive and negative,
of all RBP Resources across the PJM Region.
RBP Charges shall be calculated daily and allocated to Load Serving Entities by the
relevant Electric Distributor(s) in accordance with Tariff, Attachment DD, section
18.3(b) and the RAA, Article 7, section 2B.
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18.6
RBP Resource Obligations
(a)
Capacity Must Offer Obligation
An RBP Resource committed through the Reliability Backstop Procurement must offer all
committed RBP UCAP MW into the RPM Auctions as Capacity Resources pursuant to the
capacity must offer requirements and exceptions set forth in Tariff, Attachment DD, sections 6.6
and 6.6A. The applicable RPM auctions shall be the Base Residual Auctions and Incremental
Auctions conducted after an RBP Resource’s RBP UCAP MW have been committed through the
Reliability Backstop Procurement and continuing for each subsequent Delivery Year through the
end of the fixed 15-year term, except RBP UCAP MW for RBP Resources without a notice of
intent to offer submitted pursuant to Tariff, Attachment DD, section 5.5 for the 2029/2030 Base
Residual Auction shall have a must offer requirement in the next RPM Auction, including but
not limited to the 2030/2031 Base Residual Auction and the 2029/2030 Second Incremental
Auction. The RBP Resource’s capacity must offer obligation into RPM Auctions for a Delivery
Year is satisfied once the entirety of the committed RBP UCAP MW have cleared in RPM
Auction(s) for such Delivery Year.
RBP Resources with RBP UCAP MW committed through RPM Auctions will be subject to all
RPM capacity market rules, as set forth in Tariff, Attachments DD and DD-1.
(i)
Price
RBP UCAP MW committed through the Reliability Backstop Procurement, and not
qualifying for an exception pursuant to Tariff, Attachment DD, section 6.6(g), must be
offered into the applicable RPM Auctions as price takers, i.e., $0/MW-day UCAP.
(ii)
Quantity
RBP Resources committed through the Reliability Backstop Procurement must be offered
into the applicable RPM Auctions. The UCAP MW quantity offered in an applicable
RPM Auction for the Delivery Year must be a quantity equal to the lesser of committed
RBP UCAP MW minus total RPM committed MW through RPM Auctions for the
Delivery Year and the available UCAP MW at the time of the RPM Auction.
(b)
Exceptions to the Must Offer Obligation
An RBP Resource that is granted an exception to the RPM must-offer obligation, as set forth in
Tariff, Attachment DD, section 6.6(g) or 6.6A(c), shall nevertheless be subject to the RBP
shortfall charge.
(c)
RBP Shortfall UCAP MW
RBP UCAP MW committed through the Reliability Backstop Procurement that is unable to be
delivered in a Delivery Year within the fixed, 15-year period will not be compensated for the
undelivered megawatts via RBP Settlement Credits for each day the daily unforced capacity
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value of the RBP Resource is below the daily committed RBP UCAP MW and will be subject to
any applicable RBP shortfall charges.
(d)
RBP Shortfall Charges
RBP Resources with RBP UCAP MW committed through the Reliability Backstop Procurement
that are unable to meet its full RBP UCAP MW commitment due to not achieving commercial
operation by the first Delivery Year of the RBP commitment shall be subject to RBP shortfall
charges for the committed RBP UCAP MW until the resources achieves commercial operation,
for up to three years.
RBP shortfall charges shall be assessed daily, beginning in the first Delivery Year of the RBP
commitment, on the full RBP committed UCAP.
The RBP shortfall charge shall equal the committed RBP UCAP MW times a charge rate equal
to 20% of the RBP commitment price of such resource (i.e., RBP shortfall charge = committed
RBP UCAP MW * 20% of RBP commitment price), for the applicable Delivery Year
(i)
Exception to RBP Shortfall Charges
An RBP Resource that is a generation or Energy Storage Resource and is unable to meet
expected commercial operation date solely due to Network Upgrades shall be excepted
from RBP shortfall charges if the RBP Resource successfully demonstrates readiness
through test energy and seeks interim deliverability.
(e)
Failure of RBP UCAP MW to Materialize
Commitments of RBP UCAP MW through the Reliability Backstop Procurement shall be
rescinded for the remainder of the fifteen-year term where RBP UCAP MW fail to come online
for three Delivery Years beginning with the first Delivery Year in which the RBP Resource was
committed. Once rescinded, RBP UCAP MW commitments will not be eligible to be
compensated as RBP UCAP MW for the remainder of the fixed 15-year term and shall no longer
be subject to RBP shortfall charges.
(f)
Change in Ownership
Commitments of RBP UCAP MW shall follow the RBP Resource. With change in ownership of
the RBP Resource, the commitment of RBP UCAP MW shall be conveyed to the new owner and
continue through the end of the fixed 15-year term.
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18.7
Exiting Transmission Owner RBP Obligations
In the event a Transmission Owner exits PJM Interconnection, L.L.C. and the quantity of load
with the Transmission Owner is commensurate with the RBP Resources that are located in that
Transmission Owner’s territory, the Transmission Owner shall honor the remaining term of the
RBP commitment.
(a)
Exiting Transmission Owner with Committed RBP Resources
Any Transmission Owner seeking to exit PJM Interconnection, L.L.C. may, prior to exiting PJM,
enter into agreements that maintain appropriate rates, terms, and conditions that preserves the
RBP commitments with the owners of RBP Resource(s) that have been committed through the
Reliability Backstop Procurement that are located within the physical boundaries of the
Transmission Owner’s Zone. PJM and PJMSettlement shall be relieved of any applicable RBP
obligations made to RBP Resources that are subject to such agreements. In the event no such
agreement is made and such RBP Resource(s) can be pseudo-tied into the PJM Region, the
exiting Transmission Owner must, to the extent the Office of the Interconnection elects to retain
such RBP Resource throughout the term of its RBP commitment, pay all costs for RBP
Resources to pseudo-tie into the PJM Region so that such resource meets the external Capacity
Resource eligibility requirements set forth in Tariff, Attachment DD, section 5.5A prior to the
Transmission Owner exiting PJM Interconnection, L.L.C.
Any Transmission Owner seeking to exit PJM Interconnection, L.L.C. with RBP Resource(s)
that (i) are located within the physical boundaries of the Transmission Owner’s Zone and (ii)
cannot be pseudo-tied into the PJM Region, and/or which the Office of the Interconnection elects
not to retain the RBP Resource as a Capacity Resource throughout the term of its RBP
commitment, shall pay costs associated with the remaining term of the RBP Resource, the
amount which shall be determined through a filing submitted under the Federal Power Act, prior
to exiting PJM Interconnection, L.L.C. Revenues collected in such an event shall be credited to
Load Serving Entities that are allocated a share of the RBP Charges on a pro rata basis through
the remaining term of the RBP commitment.
(b)
Exiting Transmission Owner with Load Allocated RBP Charges
Any Transmission Owner seeking to exit PJM Interconnection, L.L.C. with net load that has
been allocated RBP Charges for RBP Resources not located within the physical boundaries of
the Transmission Owner’s Zone may, prior to exiting PJM, enter into agreements that maintain
appropriate rates, terms and conditions that preserves the RBP commitments with the owners of
such RBP Resource(s). PJM and PJMSettlement shall be relieved of any applicable RBP
obligations made to RBP Resources that are subject to such agreements. In the event no such
agreement is made, the exiting Transmission Owner must pay all forward obligations on an
accelerated basis, the amount which shall be determined through a filing submitted under the
Federal Power Act, prior to exiting PJM Interconnection, L.L.C. Any such revenues collected
shall be distributed to the RBP Resources under the standard daily RBP settlement schedule to
such resources through the remaining term of the RBP commitment.
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18.8 Credit Requirements for RBP Sellers and LSEs Allocated RBP Charges
The provisions of Tariff, Attachment DD, section 18.8(a) shall apply to RBP Sellers seeking to
submit RBP Sell Offers in the Reliability Backstop Procurement. The provisions of Tariff,
Attachment DD, section 18.8(b) shall apply to LSEs allocated costs for RBP UCAP MW
procured through the Reliability Backstop Procurement, as determined in accordance with Tariff,
Attachment DD, section 18.3. Nothing in this Tariff, Attachment DD, section 18 supersedes the
provisions of Tariff, Attachment Q.
In addition, settlement during any Delivery Year of cleared positions resulting from, or expected
to result from, the Reliability Backstop Procurement may be included, as appropriate, in Peak
Market Activity pursuant to Tariff, Attachment Q, Section VII.A. The forms of acceptable credit
support shall be limited to RBP Collateral.
The Reliability Backstop Procurement credit requirements described herein shall be separate
from and additional to any credit requirements for participation in RPM Auctions and bilateral
transactions under Tariff, Attachment DD, section 4.6, and other market activity in the PJM
Markets, as set forth in Tariff, Attachment Q, and shall be applied separately to each RBP Seller
with RBP Sell Offer and each LSE allocated cost for RBP UCAP MW procured through the
Reliability Backstop Procurement, as determined in accordance with Tariff, Attachment DD,
section 18.3.
(a)
RBP Credit Requirements of RBP Sellers Seeking to Submit RBP Sell Offers
Prior to or simultaneous with submitting RBP Sell Offers, RBP Sellers seeking to participate in
the Reliability Backstop Procurement must post the appropriate amount of the Reliability
Backstop Procurement credit requirement to each RBP Resource for which RBP Sell Offers are
submitted.
(i)
Applicability
An RBP Seller seeking to submit an RBP Sell Offer in the Reliability Backstop
Procurement must satisfy the credit requirement, i.e., the RBP credit requirement
specified herein, prior to or simultaneously with submitting such RBP Sell Offer.
(ii)
RBP Resource Credit Requirement
The credit requirement applicable to an RBP Seller seeking to submit an RBP Sell Offer
in the Reliability Backstop Procurement shall be the RBP credit requirement as provided
in Tariff, Attachment DD, section 18.8(iv).
The total RBP credit requirement for each RBP Seller shall be, for the sum of the credit
requirements for all RBP Sell Offers submitted by such RBP Seller in the Reliability
Backstop Procurement.
(iii)
Reduction in RBP Credit Requirement
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(A)
The RBP credit requirement shall be returned for any RBP
Resources that do not receive a commitment through the Reliability Backstop
Procurement, within five (5) business of the completion of the clearing process
pursuant to Tariff, Attachment DD, section 18.5(f).
(B)
Where an RBP Seller’s RBP Sell Offer is committed through the
Reliability Backstop Procurement and the RBP Resource subsequently achieves
commercial operation, the Office of the Interconnection may return the Reliability
Backstop Procurement Credit Requirement after a one-year look-back from the
achievement of commercial operation.
(iv)
Calculation of RBP Credit Requirement for RBP Sellers Seeking to
Submit RBP Sell Offers in the RBP
RBP Sell Offers submitted by RBP Sellers in the Reliability Backstop Procurement shall
be accompanied by a Reliability Backstop Procurement credit requirement, which shall
be equal to:
(v)
Credit Responsibility for Traded RBP Resource Commitment
The Office of the Interconnection may require that credit and financial responsibility for
a committed RBP Resource that is traded remain with the original party (which for these
purposes, means the party bearing credit responsibility for the committed RBP Resource
immediately prior to trade) unless the Office of the Interconnection determines that the
receiving party has independently posted sufficient credit support with the Office of the
Interconnection and agreed by providing written confirmation to the Office of the
Interconnection that it will fully assume the credit responsibility associated with the
committed RBP Resource. In determining the appropriate level of credit for any
receiving party, the Office of the Interconnection may rely on Tariff, Attachment Q.
(b)
RBP Credit Requirements Applicable to Load Serving Entities Responsible for
RBP Charges
Prior to the first Delivery Year, the assessment of an RBP credit requirement by the Office of the
Interconnection, LSEs allocated cost responsibility for RBP Charges, pursuant to Tariff,
Attachment DD, section 18.3, must post RBP Collateral for the RBP credit requirement,
calculated as set forth herein:
(i)
RBP Credit Requirement for Load Serving Entities
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(A)
The cumulative RBP credit requirement for Load Serving Entities
for a given Delivery Year shall be equivalent to the product of the RBP Credit
Rate multiplied by RBP UCAP MW committed, where
the RBP Credit Rate shall equal $1.5 million, as may be reduced,
for reasons including a change in the total committed RBP UCAP MW,
when total posted RBP Collateral is greater than the total remaining RBP
Charges obligations, over time by the Office of the Interconnection to an
amount sufficient to cover the total existing RBP Charges obligations; and
the RBP UCAP MW committed amount shall equal the amount of
RBP UCAP MW that receives a commitment through the Reliability
Backstop Procurement minus each commitment of RBP UCAP MW that
is rescinded pursuant to Tariff, Attachment DD, section 18.6(e).
The cumulative RBP credit requirement shall be met through RBP Collateral
posted by those Load Serving Entities allocated cost pursuant to Tariff,
Attachment DD, section 18.3.
(B)
The Office of the Interconnection shall apply the following credit
requirements to each Load Serving Entity allocated responsibility for RBP
Obligations, pursuant to Tariff, Attachment DD, section 18.3, as follows:
(1)
For Load Serving Entities with an RBP Obligation in
accordance Tariff, Attachment DD, section 18.3, prior to forty-five (45)
days before the start of the Delivery Year, such Load Serving Entities,
must post, or maintain an existing, RBP Collateral equal to $1.5 million x
the allocated RBP Obligation MW, where the RBP Obligation MW equals
the RBP Obligation MW submitted for the Load Serving Entity by the
Electric Distributor and scaled, as necessary, in the event that the RBP
Obligation MW values uploaded by the Electric Distributor do not sum to
the fixed, Final RBP Target MW for the zone/area. For Load Serving
Entities required to post RBP Collateral by the foregoing sentence, the
Office of the Interconnection may evaluate such Load Serving Entity for
unreasonable credit risk under the Unreasonable Credit Risk provisions of
Tariff, Attachment Q, Section II, and require additional RBP Collateral as
appropriate.
(2)
To the extent such Load Serving Entity is allocated cost
pursuant to Tariff, Attachment DD, section 18.3 and no RBP Obligations
are reported to the Office of the Interconnection in an Electric Distributor
zone/area in which the Load Serving Entity serves load, prior to forty-five
(45) days before the start of the Delivery Year, such Load Serving
Entities, may be required to post, or maintain an existing, RBP Collateral
equal to the product of the RBP Credit Rate multiplied by the allocated
RBP UCAP MW, where the allocated RBP UCAP MW shall equal the
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Load Serving Entity’s pro-rata share of the Daily Unforced Capacity
Obligation for the zone/area as determined in RAA, Schedule 8. For Load
Serving Entities required to post RBP Collateral by the foregoing
sentence, the Office of the Interconnection may evaluate whether such
Load Serving Entity for unreasonable credit risk under the Unreasonable
Credit Risk provisions of Tariff, Attachment Q, Section II, and require
additional RBP Collateral as appropriate.
(C)
Credit Requirements Associated With Intra-Delivery Year Transfer
of Load and Allocated RBP UCAP MW Cost Responsibility
(1)
To the extent a Load Serving Entity transfers its load
serving obligations that are associated with RBP UCAP MW, as
determined pursuant to Tariff, Attachment DD, section 18.3, then the
transferee LSE must fully satisfy all applicable credit and collateral
requirements required herein associated with such transferred RBP UCAP
MW obligation and, as applicable, the credit requirements in Tariff,
Attachment Q. Transferee shall independently post sufficient RBP
Collateral directly with the Office of the Interconnection to satisfy the
incremental RBP UCAP MW associated with the acquired load.
(2)
Transferor shall be released from its financial obligations
for amount of RBP Collateral associated with the RBP UCAP MW
associated with the transferred load. Any RBP Collateral posted by
transferor shall be returned once Transferee has posted the RBP Collateral
determined in accordance with Tariff, Attachment DD, section 18.8(c) and
any unpaid invoice amounts associated with such transfer have been paid
by the transferor.
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18.9
RBP Default Allocation
(a)
LSE Nonpayment of RBP Charges
In the event a Load Serving Entity defaults and fails to pay an RBP Charge, the defaulted amount
will be allocated to all remaining Load Serving Entities responsible for paying RBP Charges
based on their pro-rata share of the total RBP Charges for all such Load Serving Entities. Such
amounts may be offset by the RBP Collateral posted by the defaulting Load Serving Entity.
(b)
RBP Resource Nonpayment of RBP Shortfall Charges
In the event that an RBP Resource subject to RBP shortfall charges pursuant to Tariff,
Attachment DD, section 18.6(d) defaults on payment of RBP shortfall charges, the
corresponding credits will not be allocated to the Load Serving Entities that would otherwise
receive the RBP shortfall credits.
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ARTICLE 1 – DEFINITIONS
Unless the context otherwise specifies or requires, capitalized terms used herein shall
have the respective meanings assigned herein or in the Schedules hereto, or in the PJM Tariff or
PJM Operating Agreement if not otherwise defined in this Agreement, for all purposes of this
Agreement (such definitions to be equally applicable to both the singular and the plural forms of
the terms defined). Unless otherwise specified, all references herein to Articles, Sections or
Schedules, are to Articles, Sections or Schedules of this Agreement. As used in this Agreement:
Accredited UCAP:
“Accredited UCAP” shall mean the quantity of Unforced Capacity, as denominated in Effective
UCAP, that an ELCC Resource is capable of providing in a given Delivery Year.
Accredited UCAP Factor:
“Accredited UCAP Factor” shall mean, through the 2024/2025 Delivery Year, one minus
EFORd, and for 2025/2026 Delivery Year and subsequent Delivery Years, the ratio of the
Capacity Resource’s Accredited UCAP to the Capacity Resource’s installed capacity.
Agreement:
“Agreement” shall mean this Reliability Assurance Agreement, together with all Schedules
hereto, as amended from time to time.
Annual Demand Resource:
“Annual Demand Resource” shall mean a resource that is placed under the direction of the
Office of the Interconnection during the Delivery Year, and will be available for an unlimited
number of interruptions during such Delivery Year by the Office of the Interconnection, and will
be capable of maintaining each such interruption between the hours of 10:00AM to 10:00PM
Eastern Prevailing Time for the months of June through October and the following May, and
6:00AM through 9:00PM Eastern Prevailing Time for the months of November through April
unless there is an Office of the Interconnection approved maintenance outage during October
through April. The Annual Demand Resource must be available in the corresponding Delivery
year to be offered for sale or Self-Supplied in an RPM Auction, or included as an Annual
Demand Resource in an FRR Capacity Plan for the corresponding Delivery Year.
Annual Energy Efficiency Resource:
“Annual Energy Efficiency Resource” shall mean a project, including installation of more
efficient devices or equipment or implementation of more efficient processes or systems,
meeting the requirements of Reliability Assurance Agreement, Schedule 6 and exceeding then-
current building codes, appliance standards, or other relevant standards, designed to achieve a
continuous (during the summer and winter periods described in such Schedule 6 and the PJM
Manuals) reduction in electric energy consumption that is not reflected in the peak load forecast
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prepared for the Delivery Year for which the Energy Efficiency Resource is proposed, and that is
fully implemented at all times during such Delivery Year, without any requirement of notice,
dispatch, or operator intervention.
Applicable Regional Entity:
“Applicable Regional Entity” shall have the same meaning as in the PJM Tariff.
Base Capacity Demand Resource:
“Base Capacity Demand Resource” shall mean, for the 2018/2019 and 2019/2020 Delivery
Years, a resource that is placed under the direction of the Office of the Interconnection and that
will be available June through September of a Delivery Year, and will be available to the Office
of the Interconnection for an unlimited number of interruptions during such months, and will be
capable of maintaining each such interruption for at least a 10-hour duration between the hours
of 10:00AM to 10:00PM Eastern Prevailing Time. The Base Capacity Demand Resource must
be available June through September in the corresponding Delivery Year to be offered for sale or
self-supplied in an RPM Auction, or included as a Base Capacity Demand Resource in an FRR
Capacity Plan for the corresponding Delivery Year.
Base Capacity Energy Efficiency Resource:
“Base Capacity Energy Efficiency Resource” shall mean, for the 2018/2019 and 2019/2020
Delivery Years, a project, including installation of more efficient devices or equipment or
implementation of more efficient processes or systems, meeting the requirements of RAA,
Schedule 6 and exceeding then-current building codes, appliance standards, or other relevant
standards, designed to achieve a continuous (during the summer peak periods as described in
Reliability Assurance Agreement, Schedule 6 and the PJM Manuals) reduction in electric energy
consumption that is not reflected in the peak load forecast prepared for the Delivery Year for
which the Base Capacity Energy Efficiency Resource is proposed, and that is fully implemented
at all times during such Delivery Year, without any requirement of notice, dispatch, or operator
intervention.
Base Capacity Resource:
“Base Capacity Resource” shall have the same meaning as in Tariff, Attachment DD.
Base Residual Auction:
“Base Residual Auction” shall have the same meaning as in Tariff, Attachment DD.
Behind The Meter Generation:
“Behind The Meter Generation” shall refer to a generating unit that delivers energy to load
without using the Transmission System or any distribution facilities (unless the entity that owns
or leases the distribution facilities consented to such use of the distribution facilities and such
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consent has been demonstrated to the satisfaction of the Office of the Interconnection; provided,
however, that Behind The Meter Generation does not include (i) at any time, any portion of such
generating unit’s capacity that is designated as a Generation Capacity Resource or DER Capacity
Aggregation Resource or (ii) in any hour, any portion of the output of such generating unit that is
sold to another entity for consumption at another electrical location or into the PJM Interchange
Energy Market.
Black Start Capability:
“Black Start Capability” shall mean the ability of a generating unit or station to go from a
shutdown condition to an operating condition and start delivering power without assistance from
the power system.
Capacity Emergency Transfer Objective (CETO):
“Capacity Emergency Transfer Objective” or “CETO” shall mean, through the 2024/2025
Delivery Year, the amount of electric energy that a given area must be able to import in order to
remain within a loss of load expectation of one event in 25 years when the area is experiencing a
localized capacity emergency, as determined in accordance with the PJM Manuals. Without
limiting the foregoing, CETO shall be, for Delivery Years through 2024/2025, calculated based
in part on EFORD determined in accordance with Reliability Assurance Agreement, Schedule 5,
Paragraph C. Beginning with the 2025/2026 Delivery Year, CETO shall mean the amount of
electric energy that a given area must be able to import in order to satisfy a normalized expected
unserved energy for the area that is equal to forty percent of the normalized expected unserved
energy for the RTO when at the annual reliability criteria, where normalized expected unserved
energy is the expected unserved energy (for the area or RTO, as appropriate) divided by the
forecasted annual energy (for the area or RTO, as appropriate), when the area is experiencing a
localized capacity emergency, as determined in accordance with the PJM Manuals.
Capacity Emergency Transfer Limit (CETL):
Capacity Emergency Transfer Limit” or “CETL” shall mean the capability of the transmission
system to support deliveries of electric energy to a given area experiencing a localized capacity
emergency as determined in accordance with the PJM Manuals.
Capacity Import Limit:
For any Delivery Year up to and including the 2019/2020 Delivery Year, “Capacity Import
Limit” shall mean, (a) for the PJM Region, (1) the maximum megawatt quantity of external
Generation Capacity Resources that PJM determines for each Delivery Year, through appropriate
modeling and the application of engineering judgment, the transmission system can receive, in
aggregate at the interface of the PJM Region with all external balancing authority areas and
deliver to load in the PJM Region under capacity emergency conditions without violating
applicable reliability criteria on any bulk electric system facility of 100kV or greater, internal or
external to the PJM Region, that has an electrically significant response to transfers on such
interface, minus (2) the then-applicable Capacity Benefit Margin; and (b) for certain source
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zones identified in the PJM manuals as groupings of one or more balancing authority areas, (1)
the maximum megawatt quantity of external Generation Capacity Resources that PJM
determines the transmission system can receive at the interface of the PJM Region with each
such source zone and deliver to load in the PJM Region under capacity emergency conditions
without violating applicable reliability criteria on any bulk electric system facility of 100kV or
greater, internal or external to the PJM Region, that has an electrically significant response to
transfers on such interface, minus the then-applicable Capacity Benefit Margin times (2) the ratio
of the maximum import quantity from each such source zone divided by the PJM total maximum
import quantity. As more fully set forth in the PJM Manuals, PJM shall make such
determination based on the latest peak load forecast for the studied period, the same computer
simulation model of loads, generation and transmission topography employed in the
determination of Capacity Emergency Transfer Limit for such Delivery Year, including external
facilities from an industry standard model of the loads, generation, and transmission topography
of the Eastern Interconnection under peak conditions. PJM shall specify in the PJM Manuals the
areas and minimum distribution factors for identifying monitored bulk electric system facilities
that have an electrically significant response to such transfers on the PJM interface. Employing
such tools, PJM shall model increased power transfers from external areas into PJM to determine
the transfer level at which one or more reliability criteria is violated on any monitored bulk
electric system facilities that have an electrically significant response to such transfers. For the
PJM Region Capacity Import Limit, PJM shall optimize transfers from other source areas not
experiencing any reliability criteria violations as appropriate to increase the Capacity Import
Limit. The aggregate megawatt quantity of transfers into PJM at the point where any increase in
transfers on the interface would violate reliability criteria will establish the Capacity Import
Limit. Notwithstanding the foregoing, a Capacity Resource located outside the PJM Region
shall not be subject to the Capacity Import Limit if the Capacity Market Seller seeks an
exception thereto by demonstrating to PJM, by no later than five (5) business days prior to the
commencement of the offer period for the relevant RPM Auction, that such resource meets all of
the following requirements:
(i)
it has, at the time such exception is requested, met all applicable requirements to
be pseudo-tied into the PJM Region, or the Capacity Market Seller has committed in writing that
it will meet such requirements, unless prevented from doing so by circumstances beyond the
control of the Capacity Market Seller, prior to the relevant Delivery Year;
(ii)
at the time such exception is requested, it has long-term firm transmission service
confirmed on the complete transmission path from such resource into PJM; and
(iii)
it is, by written commitment of the Capacity Market Seller, subject to the same
obligations imposed on Generation Capacity Resources located in the PJM Region by Tariff,
Attachment DD, section 6.6 to offer their capacity into RPM Auctions; provided, however, that
(a) the total megawatt quantity of all exceptions granted hereunder for a Delivery Year, plus the
Capacity Import Limit for the applicable interface determined for such Delivery Year, may not
exceed the total megawatt quantity of Network External Designated Transmission Service on
such interface that PJM has confirmed for such Delivery Year; and (b) if granting a qualified
exception would result in a violation of the rule in clause (a), PJM shall grant the requested
exception but reduce the Capacity Import Limit by the quantity necessary to ensure that the total
quantity of Network External Designated Transmission Service is not exceeded.
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Capacity Only Option:
“Capacity Only Option” shall mean participation in Emergency Load Response Program or Pre-
Emergency Program which allows, pursuant to Tariff, Attachment DD and as applicable, a
capacity payment for the ability to reduce load during a pre-emergency or emergency event.
Capacity Performance Resource:
“Capacity Performance Resource” shall have the same meaning as in Tariff, Attachment DD.
Capacity Resources:
“Capacity Resources” shall mean megawatts of (i) net capacity from Existing Generation
Capacity Resources or Planned Generation Capacity Resources meeting the requirements of the
Reliability Assurance Agreement, Schedules 9 and Reliability Assurance Agreement, Schedule
10 that are or will be owned by or contracted to a Party and that are or will be committed to
satisfy that Party's obligations under the Reliability Assurance Agreement, or to satisfy the
reliability requirements of the PJM Region, for a Delivery Year; (ii) net capacity from Existing
Generation Capacity Resources or Planned Generation Capacity Resources not owned or
contracted for by a Party which are accredited to the PJM Region pursuant to the procedures set
forth in such Schedules 9 and 10; or (iii) load reduction capability provided by Demand
Resources or Energy Efficiency Resources that are accredited to the PJM Region pursuant to the
procedures set forth in the Reliability Assurance Agreement, Schedule 6; or (iv) generation and
load reduction capability provided by a DER Capacity Aggregation Resource, pursuant to the
procedures set forth in the Reliability Assurance Agreement, Schedule 6.2 and the PJM Manuals.
Capacity Resource Provider:
“Capacity Resource Provider” shall mean a Member that (1) owns, or has the contractual
authority to control the output of, a Generation Capacity Resource, that has not transferred such
authority to another entity; (2) or a DER Aggregator that has a contractual relationship to use a
Component DER within a DER Aggregation Resource that is linked to a DER Capacity
Aggregation Resource.
Capacity Storage Resource Class:
“Capacity Storage Resource Class” shall mean the ELCC Classes specified in Schedules 9.1 and
9.2, section B of this Agreement, each of which is composed of (1) Capacity Storage Resources
with the same specified characteristic duration of 4, 6, 8, and 10 hours or; (2) storage device
Component DER. The characteristic duration of an Energy Storage Resource Class is the ratio of
the modeled MWh energy storage capability of members of the class to the modeled MW power
capability of members of the class.
Capacity Transfer Right:
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“Capacity Transfer Right” shall have the meaning specified in Tariff, Attachment DD.
Coal Class:
“Coal Class” shall mean an ELCC Class consisting of Unlimited Resources primarily
fueled by coal.
Combination Resource:
“Combination Resource” shall mean a Generation Capacity Resource, or a generation
Component DER within a DER Aggregation Resource that is linked to a DER Capacity
Aggregation Resource, that has a component that has the characteristics of a Limited Duration
Resource combined with (i) a component that has the characteristics of an Unlimited Resource or
(ii) a component that has the characteristics of a Variable Resource.
Compliance Aggregation Area (CAA):
“Compliance Aggregation Area” or “CAA” shall have the same meaning as in the Tariff.
Complex Hybrid Class:
“Complex Hybrid Class” shall mean an ELCC Class composed of Combination Resources that
combine three or more components, whereby one component is a class of Limited Duration
Resource, and the other components are different Variable Resource classes, and such
Combination Resources cannot be included in any other Combination Resource class. A resource
that is a member of a Complex Hybrid Class has a single Point Of Interconnection, unless the
resource is controlled in an integrated fashion, is at a single site, and is approved by PJM to be
considered a single resource in accordance with the PJM Manuals.
Consolidated Transmission Owners Agreement, PJM Transmission Owners Agreement or
Transmission Owners Agreement:
“Consolidated Transmission Owners Agreement,” “PJM Transmission Owners Agreement” or
“Transmission Owners Agreement” shall mean that certain Consolidated Transmission Owners
Agreement, dated as of December 15, 2005, by and among the Transmission Owners and by and
between the Transmission Owners and PJM Interconnection, L.L.C. on file with the
Commission, as amended from time to time.
Control Area:
“Control Area” shall mean an electric power system or combination of electric power systems
bounded by interconnection metering and telemetry to which a common generation control
scheme is applied in order to:
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(a)
match the power output of the generators within the electric power system(s) and
energy purchased from entities outside the electric power system(s), with the load within the
electric power system(s);
(b)
maintain scheduled interchange with other Control Areas, within the limits of
Good Utility Practice;
(c)
maintain the frequency of the electric power system(s) within reasonable limits in
accordance with Good Utility Practice and the criteria of NERC and each Applicable Regional
Entity;
(d)
maintain power flows on transmission facilities within appropriate limits to
preserve reliability; and
(e)
provide sufficient generating capacity to maintain operating reserves in
accordance with Good Utility Practice.
Daily Unforced Capacity Obligation:
“Daily Unforced Capacity Obligation” shall mean the capacity obligation of a Load Serving
Entity during the Delivery Year, determined in accordance with the Reliability Assurance
Agreement, Schedule 8 or, as to an FRR Entity, in the Reliability Assurance Agreement,
Schedule 8.1.
Delivery Year:
“Delivery Year” shall mean a Planning Period for which a Capacity Resource is committed
pursuant to the auction procedures specified in Tariff, Attachment DD or pursuant to an FRR
Capacity Plan under RAA, Schedule 8.1.
Demand Resource (DR):
“Demand Resource” or “DR” shall mean a Limited Demand Resource, Extended Summer
Demand Resource, Annual Demand Resource, Base Capacity Demand Resource or Summer-
Period Demand Resource with a demonstrated capability to provide a reduction in demand or
otherwise control load in accordance with the requirements of RAA, Schedule 6 that offers and
that clears load reduction capability in a Base Residual Auction or Incremental Auction or that is
committed through an FRR Capacity Plan.
Demand Resource Factor or DR Factor:
“Demand Resource Factor” or “DR Factor” shall mean, for Delivery Years through May 31,
2018, that factor approved from time to time by the PJM Board used to determine the unforced
capacity value of a Demand Resource in accordance with Reliability Assurance Agreement,
Schedule 6
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Demand Resource Officer Certification Form:
“Demand Resource Officer Certification Form” shall mean a certification as to an intended
Demand Resource Sell Offer, in accordance with Reliability Assurance Agreement, Schedule 6
and Reliability Assurance Agreement, Schedule 8.1 and the PJM Manuals.
Demand Resource Registration:
“Demand Resource Registration” shall mean a registration in the Full Program Option or
Capacity Only Option of the Emergency or Pre-Emergency Load Resource Program in
accordance with Tariff, Attachment K-Appendix, section 8.
Demand Resource Sell Offer Plan:
“Demand Resource Sell Offer Plan” shall mean the plan required by Reliability Assurance
Agreement, Schedule 6 and Reliability Assurance Agreement, Schedule 8.1 in support of an
intended offer of Demand Resources in an RPM Auction, or an intended inclusion of Demand
Resources in an FRR Capacity Plan.
Diesel Utility Class:
"Diesel Utility Class" shall mean an ELCC Class consisting of Unlimited Resources of the diesel
technology type that is not primarily fueled by landfill gas.
DER Aggregator Officer Certification Form:
“DER Aggregator Officer Certification Form” shall mean a DER Aggregator’s certification as to
an intended DER Capacity Aggregation Resource Sell Offer, in accordance with Reliability
Assurance Agreement, Schedule 6.2 and Reliability Assurance Agreement, Schedule 8.1 and the
PJM Manuals.
DER Capacity Aggregation Resource Sell Offer Plan:
“DER Capacity Aggregation Resource Sell Offer Plan” shall mean the plan required by
Reliability Assurance Agreement, Schedule 6.2 and Reliability Assurance Agreement, Schedule
8.1 in support of an intended offer of a DER Capacity Aggregation Resource in an RPM
Auction, or an intended inclusion of a DER Capacity Aggregation Resource in an FRR Capacity
Plan.
Effective Nameplate Capacity:
“Effective Nameplate Capacity” shall mean (i) for each Variable Resource and Combination
Resource that is a Generation Capacity Resource, the resource’s Maximum Facility Output (or,
for a Co-Located Resource, the applicable share of the Mixed Technology Facility’s Maximum
Facility Output); (ii) for each Variable Resource and Combination Resource, that is an individual
Component DER within a DER Aggregation Resource that is linked to a DER Capacity
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Aggregation Resource, the device’s maximum energy production capability, as defined by the
resource’s state interconnection agreement; or (iii) for each Limited Duration Resource, the
sustained level of output that the device can provide and maintain over a continuous period,
whereby the duration of that continuous period matches the characteristic duration of the
corresponding ELCC Class, with consideration given to ambient conditions expected to exist at
the time of PJM system peak load, to the extent that such conditions impact such resource’s
capability, not to exceed the Maximum Facility Output (or, for a Co-Located Resource, the
applicable share of the Mixed Technology Facility’s Maximum Facility Output). For the
2025/2026 Delivery Year and subsequent Delivery Years, the Effective Nameplate Capacity of
each Limited Duration Resource shall not exceed the greater of the Capacity Interconnection
Rights of such Limited Duration Resource, or the transitional system capability as limited by the
transitional resource MW ceiling as defined in the PJM Manuals, awarded for the applicable
Delivery Year.
Effective UCAP:
“Effective UCAP” shall mean a unit of measure that represents the capacity product transacted in
the Reliability Pricing Model and included in FRR Capacity Plans. One megawatt of Effective
UCAP has the same capacity value of one megawatt of Unforced Capacity.
ELCC Class:
“ELCC Class” shall mean a defined group of ELCC Resources that share a common set of
operational characteristics and for which effective load carrying capability analysis, as set forth
in RAA, Schedules 9.1 and 9.2, will establish a unique ELCC Class UCAP and corresponding
ELCC Class Rating(s). ELCC Classes shall be defined in the Schedules 9.1 and 9.2, section B of
this Agreement. Members of an ELCC Class shall share a common method of calculating the
ELCC Resource Performance Adjustment, provided that the individual ELCC Resource
Performance Adjustment values will generally differ among ELCC Resources.
ELCC Class Rating:
“ELCC Class Rating” shall mean the rating factor, based on effective load carrying capability
analysis, that applies to ELCC Resources that are members of an ELCC Class as part of the
calculation of their Accredited UCAP.
ELCC Class UCAP:
“ELCC Class UCAP” shall mean the aggregate Effective UCAP all modeled ELCC Resources in
a given ELCC Class are capable of providing in a given Delivery Year.
ELCC Portfolio UCAP:
“ELCC Portfolio UCAP” shall mean the aggregate Effective UCAP that all modeled ELCC
Resources are capable of providing in a given Delivery Year.
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ELCC Resource:
“ELCC Resource” shall mean a Component DER within a DER Aggregation Resource that is
linked to a DER Capacity Aggregation Resource, a Generation Capacity Resource or a Demand
Resource.
ELCC Resource Performance Adjustment:
“ELCC Resource Performance Adjustment” shall mean the performance of a specific ELCC
Resource relative to the aggregate performance of the ELCC Class to which it belongs as further
described in RAA, Schedule 9.1, section F and RAA, Schedule 9.2, section D.
Electric Cooperative:
“Electric Cooperative” shall mean an entity owned in cooperative form by its customers that is
engaged in the generation, transmission, and/or distribution of electric energy.
Electric Distributor:
“Electric Distributor” shall mean a Member that 1) owns or leases with rights equivalent to
ownership of electric distribution facilities that are used to provide electric distribution service to
electric load within the PJM Region; or 2) is a generation and transmission cooperative or a joint
municipal agency that has a member that owns electric distribution facilities used to provide
electric distribution service to electric load within the PJM Region.
Emergency:
“Emergency” shall mean (i) an abnormal system condition requiring manual or automatic action
to maintain system frequency, or to prevent loss of firm load, equipment damage, or tripping of
system elements that could adversely affect the reliability of an electric system or the safety of
persons or property; or (ii) a fuel shortage requiring departure from normal operating procedures
in order to minimize the use of such scarce fuel; or (iii) a condition that requires implementation
of emergency procedures as defined in the PJM Manuals.
End-Use Customer:
“End-Use Customer” shall mean a Member that is a retail end-user of electricity within the PJM
Region. For purposes of Members Committee sector classification, a Member that is a retail
end-user that owns generation may qualify as an End-Use customer if: (1) the average physical
unforced capacity owned by the Member and its affiliates in the PJM region over the five
Planning Periods immediately preceding the relevant Planning Period does not exceed the
average PJM capacity obligation for the Member and its affiliates over the same time period; or
(2) the average energy produced by the Member and its affiliates within the PJM region over the
five Planning Periods immediately preceding the relevant Planning Period does not exceed the
average energy consumed by that Member and its affiliates within the PJM region over the same
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time period. The foregoing notwithstanding, taking retail service may not be sufficient to qualify
a Member as an End-Use Customer.
Energy Efficiency Resource:
“Energy Efficiency Resource” shall mean a project, including installation of more efficient
devices or equipment or implementation of more efficient processes or systems, meeting the
requirements of RAA, Schedule 6 and exceeding then-current building codes, appliance
standards, or other relevant standards, designed to achieve a continuous (during the periods
described in Reliability Assurance Agreement, Schedule 6 and the PJM Manuals) reduction in
electric energy consumption that is not reflected in the peak load forecast prepared for the
Delivery Year for which the Energy Efficiency Resource is proposed, and that is fully
implemented at all times during such Delivery Year, without any requirement of notice, dispatch,
or operator intervention. Annual Energy Efficiency Resources, Base Capacity Energy Efficiency
Resources and Summer-Period Energy Efficiency Resources are types of Energy Efficiency
Resources.
Exigent Water Storage:
“Exigent Water Storage” shall mean water stored in the pondage or reservoir of a hydropower
resource which is not typically available during normal operating conditions (as those conditions
are described in the relevant FERC hydropower license), but which can be drawn upon during
emergency conditions (as described in the FERC hydropower license), including in order to
avoid a load shed. In an effective load carrying capability analysis, exigent storage capability
from an upstream hydro facility can be considered relative to a downstream hydro facility by
assessing cascading storage and flows.
Existing Demand Resource:
“Existing Demand Resource” shall mean a Demand Resource for which the Demand Resource
Provider has identified existing end-use customer sites that are registered for the current Delivery
Year with PJM (even if not registered by such Demand Resource Provider) and that the Demand
Resource Provider reasonably expects to have under a contract to reduce load based on PJM
dispatch instructions by the start of the Delivery Year for which such resource is offered.
Existing DER Capacity Aggregation Resource:
“Existing DER Capacity Aggregation Resource” shall mean a DER Capacity Aggregation
Resource for which the DER Aggregator has identified existing Component DER that are
registered in a DER Capacity Aggregation Resource for the current Delivery Year with PJM
(even if not registered by such DER Aggregator) and that the DER Aggregator reasonably
expects to have under a contract to generate or reduce load based on PJM dispatch instructions
by the start of the Delivery Year for which such DER Capacity Aggregation Resource is offered.
Existing Generation Capacity Resource:
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“Existing Generation Capacity Resource” shall mean, for purposes of the must-offer requirement
and mitigation of offers for any RPM Auction for a Delivery Year, a Generation Capacity
Resource that, as of the date on which bidding commences for such auction: (a) is in service; or
(b) is not yet in service, but has cleared any RPM Auction for any prior Delivery Year. A
Generation Capacity Resource shall be deemed to be in service if interconnection service has
ever commenced (for resources located in the PJM Region), or if it is physically and electrically
interconnected to an external Control Area and is in full commercial operation (for resources not
located in the PJM Region). The additional megawatts of a Generation Capacity Resource that is
being, or has been, modified to increase the number of megawatts of available installed capacity
thereof shall not be deemed to be an Existing Generation Capacity Resource until such time as
those megawatts (a) are in service; or (b) are not yet in service, but have cleared any RPM
Auction for any prior Delivery Year.
Extended Summer Demand Resource:
“Extended Summer Demand Resource” shall mean, for Delivery Years through May 31, 2018,
and for FRR Capacity Plans Delivery Years through May 31, 2019, a resource that is placed
under the direction of the Office of the Interconnection and that will be available June through
October and the following May, and will be available for an unlimited number of interruptions
during such months by the Office of the Interconnection, and will be capable of maintaining each
such interruption for at least a 10-hour duration between the hours of 10:00AM to 10:00PM
Eastern Prevailing Time. The Extended Summer Demand Resource must be available June
through October and the following May in the corresponding Delivery Year to be offered for sale
or Self-Supplied in an RPM Auction, or included as an Extended Summer Demand Resource in
an FRR Capacity Plan for the corresponding Delivery Year.
Facilities Study Agreement:
“Facilities Study Agreement” shall have the same meaning as in Tariff, Part VI, section 206.
FERC or Commission:
“FERC” or “Commission” shall mean the Federal Energy Regulatory Commission or any
successor federal agency, commission or department exercising jurisdiction over the Tariff,
Operating Agreement and Reliability Assurance Agreement.
Firm Point-To-Point Transmission Service:
“Firm Point-To-Point Transmission Service” shall have the meaning specified in the Tariff.
Firm Service Level:
“Firm Service Level” or “FSL” of Price Responsive Demand shall mean the level, determined at
a PRD Substation level, to which Price Responsive Demand shall be reduced during the Delivery
Year when the Locational Marginal Price exceeds the price associated with such Price
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Responsive Demand identified by the PRD Provider in its PRD Plan. “Firm Service Level” or
“FSL” of Demand Resource shall mean the pre-determined level to which an end-use customer’s
load shall be reduced, upon notification from the Curtailment Service Provider’s market
operations center or its agent.
Firm Transmission Service:
“Firm Transmission Service” shall mean transmission service that is intended to be available at
all times to the maximum extent practicable, subject to an Emergency, an unanticipated failure of
a facility, or other event beyond the control of the owner or operator of the facility or the Office
of the Interconnection.
Fixed Resource Requirement Alternative or FRR Alternative:
“Fixed Resource Requirement Alternative” or “FRR Alternative” shall mean an alternative
method for a Party to satisfy its obligation to provide Unforced Capacity hereunder, as set forth
in the Reliability Assurance Agreement, Schedule 8.1.
Fixed-Tilt Solar Class:
“Fixed-Tilt Solar Class” shall mean an ELCC Class consisting of Variable Resources that
produce electrical energy with solar panels that are primarily mounted in a fixed orientation.
Forecast Pool Requirement:
“Forecast Pool Requirement” or “FPR” shall mean the amount equal to one plus the unforced
reserve margin (stated as a decimal number) for the PJM Region required pursuant to this
Reliability Assurance Agreement, as approved by the PJM Board pursuant to Reliability
Assurance Agreement, Schedule 4.1.
FRR Capacity Plan or FRR Plan:
“FRR Capacity Plan” or “FRR Plan” shall mean a long-term plan for the commitment of
Capacity Resources and Price Responsive Demand to satisfy the capacity obligations of a Party
that has elected the FRR Alternative, as more fully set forth in the Reliability Assurance
Agreement, Schedule 8.1.
FRR Entity:
“FRR Entity” shall mean, for the duration of such election, a Party that has elected the FRR
Alternative hereunder.
FRR Service Area:
“FRR Service Area” shall mean (a) the service territory of an IOU as recognized by state law,
rule or order; (b) the service area of a Public Power Entity or Electric Cooperative as recognized
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by franchise or other state law, rule, or order; or (c) a separately identifiable geographic area that
is: (i) bounded by wholesale metering, or similar appropriate multi-site aggregate metering, that
is visible to, and regularly reported to, the Office of the Interconnection, or that is visible to, and
regularly reported to an Electric Distributor and such Electric Distributor agrees to aggregate the
load data from such meters for such FRR Service Area and regularly report such aggregated
information, by FRR Service Area, to the Office of the Interconnection; and (ii) for which the
FRR Entity has or assumes the obligation to provide capacity for all load (including load growth)
within such area. In the event that the service obligations of an Electric Cooperative or Public
Power Entity are not defined by geographic boundaries but by physical connections to a defined
set of customers, the FRR Service Area in such circumstances shall be defined as all customers
physically connected to transmission or distribution facilities of such Electric Cooperative or
Public Power Entity within an area bounded by appropriate wholesale aggregate metering as
described above.
Full Program Option:
“Full Program Option” shall mean participation in Emergency Load Response Program or Pre-
Emergency Program which allows, pursuant to Tariff, Attachment DD and as applicable, (i) an
energy payment for load reductions during a pre-emergency or emergency event, and (ii) a
capacity payment for the ability to reduce load during a pre-emergency or emergency event.
Full Requirements Service:
“Full Requirements Service” shall mean wholesale service to supply all of the power needs of a
Load Serving Entity to serve end-users within the PJM Region that are not satisfied by its own
generating facilities.
Gas Combined Cycle Class:
“Gas Combined Cycle Class” shall mean an ELCC Class consisting of Unlimited Resources of
the combined cycle technology type that is primarily fueled by natural gas, but does not meet the
requirements to be included in the Gas Combined Cycle Dual Fuel Class.
Gas Combined Cycle Dual Fuel Class:
“Gas Combined Cycle Dual Fuel Class” shall mean an ELCC Class consisting of Unlimited
Resources of the combined cycle technology type that is primarily fueled by natural gas, and that
attests that it has the capability to start independently using onsite sources and operate
independently on alternate onsite fuel source(s) up to its maximum capacity level during the
winter season of the applicable Delivery Year in which it is providing capacity, and capable of
operating on the alternate fuel for two 16-hour periods over two consecutive days at its
maximum capacity level.
Gas Combustion Turbine Class:
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“Gas Combustion Turbine Class” shall mean an ELCC Class consisting of Unlimited Resources
of the combustion turbine technology type that is primarily fueled by natural gas, but does not
meet the requirements to be included in the Gas Combustion Turbine Dual Fuel Class.
Gas Combustion Turbine Dual Fuel Class:
“Gas Combustion Turbine Dual Fuel Class” shall mean an ELCC Class consisting of Unlimited
Resources of the combustion turbine technology type that is primarily fueled by natural gas, and
attests that it has the capability to start independently using onsite sources and operate
independently on alternate onsite fuel source(s) up to its maximum capacity level during the
winter season of the applicable Delivery Year in which it is providing capacity, and capable of
operating on the alternate fuel for two 16-hour periods over two consecutive days at its
maximum capacity level.
Generation Capacity Resource:
“Generation Capacity Resource” shall mean a Generating Facility, or the contractual right to
capacity from a specified Generating Facility, that meets the requirements of RAA, Schedule 9
and RAA, Schedule 10, and, for Generating Facilities that are committed to an FRR Capacity
Plan, that meets the requirements of RAA, Schedule 8.1. A Generation Capacity Resource may
be an Existing Generation Capacity Resource or a Planned Generation Capacity Resource.
Generation Owner:
“Generation Owner” shall mean a Member that owns or leases with rights equivalent to
ownership, or otherwise controls and operates one or more operating generation resources
located in the PJM Region. The foregoing notwithstanding, for a planned generation resource to
qualify a Member as a Generation Owner, such resource shall have cleared an RPM auction, and
for Energy Resources, the resource shall have a FERC-jurisdictional interconnection agreement
or wholesale market participation agreement within PJM. Purchasing all or a portion of the
output of a generation resource shall not be sufficient to qualify a Member as a Generation
Owner. For purposes of Members Committee sector classification, a Member that is primarily a
retail end-user of electricity that owns generation may qualify as a Generation Owner if: (1) the
generation resource is the subject of a FERC-jurisdictional interconnection agreement or
wholesale market participation agreement within PJM; (2) the average physical unforced
capacity owned by the Member and its affiliates over the five Planning Periods immediately
preceding the relevant Planning Period exceeds the average PJM capacity obligation of the
Member and its affiliates over the same time period; and (3) the average energy produced by the
Member and its affiliates within PJM over the five Planning Periods immediately preceding the
relevant Planning Period exceeds the average energy consumed by the Member and its affiliates
within PJM over the same time period.
Generator Forced Outage:
“Generator Forced Outage” shall mean an immediate reduction in output or capacity or removal
from service, in whole or in part, of a generating unit by reason of an Emergency or threatened
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Emergency, unanticipated failure, or other cause beyond the control of the owner or operator of
the facility, as specified in the relevant portions of the PJM Manuals. A reduction in output or
removal from service of a generating unit in response to changes in market conditions shall not
constitute a Generator Forced Outage.
Generator Maintenance Outage:
“Generator Maintenance Outage” shall mean the scheduled removal from service, in whole or in
part, of a generating unit in order to perform repairs on specific components of the facility, if
removal of the facility qualifies as a maintenance outage pursuant to the PJM Manuals.
Generator Planned Outage:
“Generator Planned Outage” shall mean the scheduled removal from service, in whole or in part,
of a generating unit for inspection, maintenance or repair with the approval of the Office of the
Interconnection in accordance with the PJM Manuals.
Good Utility Practice:
“Good Utility Practice” shall mean any of the practices, methods and acts engaged in or
approved by a significant portion of the electric utility industry during the relevant time period,
or any of the practices, methods and acts which, in the exercise of reasonable judgment in light
of the facts known at the time the decision was made, could have been expected to accomplish
the desired result at a reasonable cost consistent with good business practices, reliability, safety
and expedition. Good Utility Practice is not intended to be limited to the optimum practice,
method, or act to the exclusion of all others, but rather is intended to include acceptable
practices, methods, or acts generally accepted in the region; including those practices required by
Federal Power Act Section 215(a)(4).
Hybrid Resource Class:
“Hybrid Resource Class” shall mean the ELCC Classes specified in RAA Schedules 9.1 and 9.2
Section B. Each Hybrid Resource Class has a specified combination of two components,
whereby, absent being part of a Combination Resource, the individual components would be in a
Capacity Storage Resource Class, a Variable Resource Class or would be an Unlimited
Resource. A resource that is a member of a Hybrid Resource Class has a single Point Of
Interconnection, unless the resource is controlled in an integrated fashion, is at a single site, and
is approved by PJM to be considered a single resource in accordance with the PJM Manuals.
Hydropower With Non-Pumped Storage:
“Hydropower With Non-Pumped Storage” shall mean a hydropower facility that can capture and
store incoming stream flow, without use of pumps, in pondage or a reservoir, and the Generation
Owner has the ability, within the constraints available in the applicable operating license, to exert
material control over the quantity of stored water and output of the facility throughout an
Operating Day.
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Hydropower With Non-Pumped Storage Class:
“Hydropower With Non-Pumped Storage Class” shall mean an ELCC Class consisting of
Combination Resources that are Hydropower With Non-Pumped Storage resources.
Incremental Auction:
“Incremental Auction” shall mean any of several auctions conducted for a Delivery Year after
the Base Residual Auction for such Delivery Year and before the first day of such Delivery Year,
including the First Incremental Auction, Second Incremental Auction, Third Incremental
Auction, or Conditional Incremental Auction. Incremental Auctions (other than the Conditional
Incremental Auction), shall be held for the purposes of:
(i)
allowing Market Sellers that committed Capacity Resources in the Base Residual
Auction for a Delivery Year, which subsequently are determined to be unavailable
to deliver the committed Unforced Capacity in such Delivery Year (due to
resource retirement, resource cancellation or construction delay, resource
derating, EFORd increase, Accredited UCAP Factor decrease, a decrease in the
Nominated Demand Resource Value of a Planned Demand Resource, delay or
cancellation of a Qualifying Transmission Upgrade, or similar occurrences) to
submit Buy Bids for replacement Capacity Resources; and
(ii)
allowing the Office of the Interconnection to reduce or increase the amount of
committed capacity secured in prior auctions for such Delivery Year if, as a result
of changed circumstances or expectations since the prior auction(s), there is,
respectively, a significant excess or significant deficit of committed capacity for
such Delivery Year, for the PJM Region or for an LDA.
Intermittent Hydropower Class:
“Intermittent Hydropower Class” shall mean an ELCC Class consisting of Variable Resources
that are run-of-river hydropower generators that must generally pass incoming water and
therefore cannot appreciably store water to later increase the output of the facility. Resources in
the Intermittent Hydropower Class are not Hydropower with Non-Pumped Storage resources.
IOU:
“IOU” shall mean an investor-owned utility with substantial business interest in owning and/or
operating electric facilities in any two or more of the following three asset categories:
generation, transmission, distribution.
Intermittent Landfill Gas Class:
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“Intermittent Landfill Gas Class” shall mean an ELCC Class consisting of Variable Resources
fueled by landfill gas that, because of fuel availability patterns, cannot run consistently at
installed capacity levels for 24 or more hours.
Large Load Adjustment:
“Large Load Adjustment” shall mean any MW quantity of adjustments to summer peak load at
the “zone/area” level and summed by Zone as further detailed in PJM Manuals. For purposes of
this definition, a “zone/area” is an area within a Zone for which the relevant Electric Distributor
specifies a separate Obligation Peak Load MW value. A zone/area is a service area of an
Electric Distributor that is a separately identifiable, geographic area bounded by wholesale
metering (e.g., the service territory of an operating company of a Transmission Owner).
Limited Demand Resource:
“Limited Demand Resource” shall mean, for Delivery Years through May 31, 2018, and for FRR
Capacity Plans Delivery Years through May 31, 2019, a resource that is placed under the
direction of the Office of the Interconnection and that will, at a minimum, be available for
interruption for at least 10 Load Management Events during the summer period of June through
September in the Delivery Year, and will be capable of maintaining each such interruption for at
least a 6-hour duration. At a minimum, the Limited Demand Resource shall be available for
such interruptions on weekdays, other than NERC holidays, from 12:00PM (noon) to 8:00PM
Eastern Prevailing Time. The Limited Demand Resource must be available during the summer
period of June through September in the corresponding Delivery Year to be offered for sale or
Self-Supplied in an RPM Auction, or included as a Limited Demand Resource in an FRR
Capacity Plan for the corresponding Delivery Year.
Limited Duration Resource:
“Limited Duration Resource” shall mean a Generation Capacity Resource or a generation
Component DER within a DER Aggregation Resource that is linked to a DER Capacity
Aggregation Resource, that is not a Variable Resource, that is not a Combination Resource, and
that is not capable of running continuously at Maximum Facility Output for 24 hours or longer.
A Capacity Storage Resource is a Limited Duration Resource.
Load Serving Entity or LSE:
“Load Serving Entity” or “LSE” shall mean any entity (or the duly designated agent of such an
entity), including a load aggregator or power marketer, (i) serving end-users within the PJM
Region, and (ii) that has been granted the authority or has an obligation pursuant to state or local
law, regulation or franchise to sell electric energy to end-users located within the PJM Region.
Load Serving Entity shall include any end-use customer that qualifies under state rules or a
utility retail tariff to manage directly its own supply of electric power and energy and use of
transmission and ancillary services.
Locational Reliability Charge:
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“Locational Reliability Charge” shall mean the charge determined pursuant to RAA, Article 7,
section 2.
Markets and Reliability Committee:
“Markets and Reliability Committee” shall mean the committee established pursuant to the
Operating Agreement as a Standing Committee of the Members Committee.
Maximum Emergency Service Level:
“Maximum Emergency Service Level” or “MESL” of Price Responsive Demand for the
2017/2018 through the 2021/2022 Delivery Years shall mean the level, determined at a PRD
Substation level, to which Price Responsive Demand shall be reduced during the Delivery Year
when a Maximum Generation Emergency is declared and the Locational Marginal Price exceeds
the price associated with such Price Responsive Demand identified by the PRD Provider in its
PRD Plan.
Member:
“Member” shall have the meaning provided in the Operating Agreement.
Members Committee:
“Members Committee” shall mean the committee specified in Operating Agreement, section 8
composed of the representatives of all the Members.
NERC:
“NERC” shall mean the North American Electric Reliability Corporation or any successor
thereto.
Network External Designated Transmission Service:
“Network External Designated Transmission Service” shall mean the quantity of network
transmission service confirmed by PJM for use by a market participant to import power and
energy from an identified Generation Capacity Resource located outside the PJM Region, upon
demonstration by such market participant that it owns such Generation Capacity Resource, has
an executed contract to purchase power and energy from such Generation Capacity Resource, or
has a contract to purchase power and energy from such Generation Capacity Resource contingent
upon securing firm transmission service from such resource.
Network Resources:
“Network Resources” shall have the meaning set forth in the PJM Tariff.
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Network Transmission Service:
“Network Transmission Service” shall mean transmission service provided pursuant to the rates,
terms and conditions set forth in Tariff, Part III or transmission service comparable to such
service that is provided to a Load Serving Entity that is also a Transmission Owner.
Nominal PRD Value:
“Nominal PRD Value” shall mean, as to any PRD Provider, an adjustment, determined in
accordance with Reliability Assurance Agreement, Schedule 6.1, to the peak-load forecast used
to determine the quantity of capacity sought through an RPM Auction, reflecting the aggregate
effect of Price Responsive Demand on peak load resulting from the Price Responsive Demand to
be provided by such PRD Provider.
Nominated Demand Resource Value:
“Nominated Demand Resource Value” shall have the meaning specified in Tariff, Attachment
DD.
Non-Retail Behind the Meter Generation:
“Non-Retail Behind the Meter Generation” shall mean Behind the Meter Generation that is used
by municipal electric systems, electric cooperatives, and electric distribution companies to serve
load.
Nuclear Class:
“Nuclear Class” shall mean an ELCC Class consisting of Unlimited Resources primarily fueled
by nuclear fuel.
Obligation Peak Load:
“Obligation Peak Load” shall have the meaning specified in Reliability Assurance Agreement,
Schedule 8.
Office of the Interconnection:
“Office of the Interconnection” shall mean the employees and agents of PJM Interconnection,
L.L.C., subject to the supervision and oversight of the PJM Board, acting pursuant to the
Operating Agreement.
Offshore Wind Class:
“Offshore Wind Class” shall mean an ELCC Class consisting of Variable Resources that produce
electrical energy with offshore wind turbines located in the ocean.
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Onshore Wind Class:
“Onshore Wind Class” shall mean an ELCC Class consisting of Variable Resources that produce
electrical energy using wind turbines and that are not in the Offshore Wind Class.
Operating Agreement of the PJM Interconnection, L.L.C., Operating Agreement or PJM
Operating Agreement:
“Operating Agreement of the PJM Interconnection, L.L.C.,” “Operating Agreement” or “PJM
Operating Agreement” shall mean that agreement, dated as of April 1, 1997 and as amended and
restated as of June 2, 1997, including all Schedules, Exhibits, Appendices, addenda or
supplements hereto, as amended from time to time thereafter, among the Members of the PJM
Interconnection, L.L.C, on file with the Commission.
Operating Day:
“Operating Day” shall have the same meaning as provided in the Operating Agreement.
Operating Reserve:
“Operating Reserve” shall mean the amount of generating capacity scheduled to be available for
a specified period of an Operating Day to ensure the reliable operation of the PJM Region, as
specified in the PJM Manuals.
Ordinary Water Storage:
“Ordinary Water Storage” shall mean water stored in the pondage or reservoir of a hydropower
resource which is typically available during normal operating conditions pursuant to the FERC
license governing the operation of the hydropower resource.
Other Limited Duration Class:
“Other Limited Duration Class” shall mean the ELCC Classes specified in RAA Schedules 9.1
and 9.2 section B of this Agreement, each of which has a specified characteristic duration and
consists of Limited Duration Resources that are not Capacity Storage Resources. The
characteristic duration of an Other Limited Duration Class is the maximum period of time
represented in the ELCC model that the resources of the class can run at a stated capability.
Other Limited Duration Combination Class:
“Other Limited Duration Combination Class” shall mean the ELCC Classes specified in RAA
Schedules 9.1 and 9.2 section B. Each Other Limited Duration Class has a specified combination
of two components, whereby, absent being part of a Combination Resource, one component
would be in an Other Limited Duration Class, and the other component would be in a Variable
Resource Class or would be an Unlimited Resource. A resource that is a member of an Other
Limited Duration Combination Class has a single Point Of Interconnection, unless the resource is
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controlled in an integrated fashion, is at a single site, and is approved by PJM to be considered a
single resource in accordance with the PJM Manuals.
Other Supplier:
“Other Supplier” shall mean a Member that: (i) is engaged in buying, selling or transmitting
electric energy, capacity, ancillary services, Financial Transmission Rights or other services
available under PJM’s governing documents in or through the Interconnection or has a good faith
intent to do so, and (ii) is not a Generation Owner, Electric Distributor, Transmission Owner or
End-Use Customer.
Other Unlimited Resource Class:
“Other Unlimited Resource Class” shall mean an ELCC Class consisting of Unlimited Resources
that do not qualify for any other ELCC Class specified in RAA Schedule 9.2, section D.
Other Variable Resource Class:
“Other Variable Resource Class” shall mean an ELCC Class consisting of Variable Resources
that are not in any other Variable Resource class, including Variable Resources that are
composed of multiple components, each of which would be a Variable Resource. A resource
composed of both fixed-tilt solar panels and tracking solar panels is not in this class. A resource
that is a member of a Other Variable Resource Class has a single Point Of Interconnection,
unless the resource is controlled in an integrated fashion, is at a single site, and is approved by
PJM to be considered a single resource in accordance with the PJM Manuals.
Partial Requirements Service:
“Partial Requirements Service” shall mean wholesale service to supply a specified portion, but
not all, of the power needs of a Load Serving Entity to serve end-users within the PJM Region
that are not satisfied by its own generating facilities.
Party:
“Party” shall mean an entity bound by the terms of the Operating Agreement.
Peak Shaving Adjustment:
“Peak Shaving Adjustment” shall mean a load forecast mechanism that allows load reductions by
end-use customers to result in a downward adjustment of the summer load forecast for the
associated Zone. Any End-Use Customer identified in an approved peak shaving plan shall not
also participate in PJM Markets as Price Responsive Demand, Demand Resource, Base Capacity
Demand Resource, Capacity Performance Demand Resource, or Economic Load Response
Participant.
Percentage Internal Resources Required:
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“Percentage Internal Resources Required” shall mean, for purposes of an FRR Capacity Plan, the
percentage of the LDA Reliability Requirement for an LDA that must be satisfied with Capacity
Resources located in such LDA.
Performance Assessment Interval:
“Performance Assessment Interval” shall have the meaning specified in Tariff, Attachment DD.
PJM:
“PJM” shall mean PJM Interconnection, L.L.C., including the Office of the Interconnection as
referenced in the PJM Operating Agreement. When such term is being used in the RAA it shall
also include the PJM Board.
PJM Board:
“PJM Board” shall mean the Board of Managers of the LLC, acting pursuant to the Operating
Agreement, except when such term is being used in Tariff, Attachment M, in which case PJM
Board shall mean the Board of Managers of PJM or its designated representative, exclusive of
any members of PJM Management.
PJM Manuals:
“PJM Manuals” shall mean the instructions, rules, procedures and guidelines established by the
Office of the Interconnection for the operation, planning and accounting requirements of the PJM
Region.
PJM Region:
“PJM Region” shall have the same meaning as provided in the Operating Agreement.
PJM Region Installed Reserve Margin:
“PJM Region Installed Reserve Margin” shall mean the percent installed reserve margin for the
PJM Region required pursuant to Reliability Assurance Agreement, Schedule 4.1, as approved
by the PJM Board.
PJM Tariff, Tariff, O.A.T.T., OATT or PJM Open Access Transmission Tariff:
“PJM Tariff,” “Tariff,” “O.A.T.T., “OATT” or “PJM Open Access Transmission Tariff” shall
mean that certain PJM Open Access Transmission Tariff, including any schedules, appendices,
or exhibits attached thereto, on file with FERC and as amended from time to time thereafter.
Planned Demand Resource:
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“Planned Demand Resource” shall mean any Demand Resource that does not currently have the
capability to provide a reduction in demand or to otherwise control load, but that is scheduled to
be capable of providing such reduction or control on or before the start of the Delivery Year for
which such resource is to be committed, as determined in accordance with the requirements of
Reliability Assurance Agreement, Schedule 6. As set forth in Reliability Assurance Agreement,
Schedule 6 and Reliability Assurance Agreement, Schedule 8.1, a Demand Resource Provider
submitting a DR Sell Offer Plan shall identify as Planned Demand Resources in such plan all
Demand Resources in excess of those that qualify as Existing Demand Resources.
Planned DER Capacity Aggregation Resource:
A “Planned DER Capacity Aggregation Resource” shall mean any DER Capacity Aggregation
Resource that does not currently have the capability to provide generation or reduction in
demand, but that is scheduled to be capable of providing such generation or reduction in demand
on or before the start of the Delivery Year for which such resource is to be committed, as
determined in accordance with the requirements of Reliability Assurance Agreement, Schedule
6.2. As set forth in Reliability Assurance Agreement, Schedule 6.2 and Reliability Assurance
Agreement, Schedule 8.1, a DER Aggregator submitting a DER Capacity Aggregation Resource
Sell Offer Plan shall identify in such plan all DER Capacity Aggregation Resources in excess of
those that qualify as Existing DER Capacity Aggregation Resources. A Planned DER Capacity
Aggregation Resource must comply with all provisions of the DER Aggregator Participation
Model described in Tariff, Attachment K-Appendix, section 1.4B and Operating Agreement,
Schedule 1, section 1.4B, prior to the applicable Delivery Year.
Planned External Generation Capacity Resource:
“Planned External Generation Capacity Resource” shall mean a proposed Generation Capacity
Resource, or a proposed increase in the capability of a Generation Capacity Resource, that (a) is
to be located outside the PJM Region, (b) participates in the generation interconnection process
of a Control Area external to PJM, (c) is scheduled to be physically and electrically
interconnected to the transmission facilities of such Control Area on or before the first day of the
Delivery Year for which such resource is to be committed to satisfy the reliability requirements
of the PJM Region, and (d) is in full commercial operation prior to the first day of such Delivery
Year, such that it is sufficient to provide the Installed Capacity set forth in the Sell Offer forming
the basis of such resource’s commitment to the PJM Region. Prior to participation in any Base
Residual Auction for such Delivery Year, the Capacity Market Seller must demonstrate that it
has documentation which is functionally equivalent to an approved Decision Point I submission
under the PJM Tariff Part VII or VIII as applicable or, for resources which are greater than
20MWs participating in a Base Residual Auction for the 2019/2020 Delivery Year and
subsequent Delivery Years, an agreement or other documentation which is functionally
equivalent to an approved Decision Point II submission under the PJM Tariff Part VII or VIII as
applicable, with the transmission owner to whose transmission facilities or distribution facilities
the resource is being directly connected, and, as applicable, the transmission provider. Prior to
participating in any Incremental Auction for such Delivery Year, the Capacity Market Seller
must demonstrate it has entered into an interconnection agreement, or such other documentation
that is functionally equivalent to a Generation Interconnection Agreement under the PJM Tariff,
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with the transmission owner to whose transmission facilities or distribution facilities the resource
is being directly connected, and, as applicable, the transmission provider. A Planned External
Generation Capacity Resource must provide evidence to PJM that it has been studied as a
Network Resource, or such other similar interconnection product in such external Control Area,
must provide contractual evidence that it has applied for or purchased transmission service to be
deliverable to the PJM border, and must provide contractual evidence that it has applied for
transmission service to be deliverable to the bus at which energy is to delivered, the agreements
for which must have been executed prior to participation in any Reliability Pricing Model
Auction for such Delivery Year. Any such resource shall cease to be considered a Planned
External Generation Capacity Resource as of the earlier of (i) the date that interconnection
service commences as to such resource; or (ii) the resource has cleared an RPM Auction, in
which case it shall become an Existing Generation Capacity Resource for purposes of the
mitigation of offers for any RPM Auction for all subsequent Delivery Years.
Planned Generation Capacity Resource:
“Planned Generation Capacity Resource” shall mean a Generation Capacity Resource, or
additional megawatts to increase the size of a Generation Capacity Resource that is being or has
been modified to increase the number of megawatts of available installed capacity thereof,
participating in the generation interconnection process under Tariff, Part IV, Subpart A, Part VII
or Part VIII, as applicable, for which: (i) Interconnection Service is scheduled to commence on
or before the first day of the Delivery Year for which such resource is to be committed to RPM
or to an FRR Capacity Plan; (ii) for any such resource seeking to offer into a Base Residual
Auction, or for any such resource of 20 MWs or less seeking to offer into a Base Residual
Auction, all the requirements for an approved Decision Point I submission have been met under
Tariff Part VII or VIII (or, for resources for which a Decision Point I submission is not required,
has such other agreement or documentation that is functionally equivalent to a an approved
Decision Point I submission) prior to the Base Residual Auction for such Delivery Year; (iii) for
any such resource of more than 20 MWs seeking to offer into a Base Residual Auction for the
2019/2020 Delivery Year and subsequent Delivery Years, all the requirements for an approved
Decision Point II submission have been met under Tariff Part VII or VIII (or, for resources for
which a Decision Point II submission is not required, has such other agreement or documentation
that is functionally equivalent to an approved Decision Point II submission) has been executed
prior to the Base Residual Auction for such Delivery Year; and (iv) a Generation Interconnection
Agreement or Wholesale Market Participation Agreement has been executed prior to any
Incremental Auction for such Delivery Year in which such resource plans to participate.
Notwithstanding the foregoing, a Planned Generation Capacity Resource shall also include any
generation resources that are committed through the Reliability Backstop Procurement. For
purposes of the must-offer requirement and mitigation of offers for any RPM Auction for a
Delivery Year, a Generation Capacity Resource shall cease to be considered a Planned
Generation Capacity Resource as of the earlier of (i) the date that Interconnection Service
commences as to such resource; or (ii) the resource has cleared an RPM Auction for any
Delivery Year, in which case it shall become an Existing Generation Capacity Resource for any
RPM Auction for all subsequent Delivery Years.
Planning Period:
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“Planning Period” shall mean the 12 months beginning June 1 and extending through May 31 of
the following year, or such other period approved by the Members Committee.
Portfolio Expected Unserved Energy:
“Portfolio Expected Unserved Energy” shall mean the annual amount of expected unserved
energy, in MWh, that is expected for the RTO when at the annual reliability criteria that provides
an acceptable level of reliability consistent with the Reliability Principles and Standards.
PRD Curve:
“PRD Curve” shall mean a price-consumption curve at a PRD Substation level, if available, and
otherwise at a Zonal (or sub-Zonal LDA, if applicable) level, that details the base consumption
level of Price Responsive Demand and the decreasing consumption levels at increasing prices.
PRD Provider:
“PRD Provider” shall mean a PJM Member that has entered contractual arrangements with end-
use customers that satisfy the eligibility criteria for and provides Price Responsive Demand.
PRD Provider’s Zonal Expected Peak Load Value of PRD:
“PRD Provider’s Zonal Expected Peak Load Value of PRD” shall mean the expected
contribution to Delivery Year peak load of a PRD Provider’s Price Responsive Demand, were
such demand not to be reduced in response to price, based on the contribution of the end-use
customers comprising such Price Responsive Demand to the most recent prior Delivery Year’s
peak demand, escalated to the Delivery Year in question, as determined in a manner consistent
with the Office of the Interconnection’s load forecasts used for purposes of the RPM Auctions.
PRD Reservation Price:
“PRD Reservation Price” shall mean an RPM Auction clearing price identified in a PRD Plan for
Price Responsive Demand load below which the PRD Provider desires not to commit the
identified load as Price Responsive Demand.
PRD Substation:
“PRD Substation” shall mean an electrical substation that is located in the same Zone or in the
same sub-Zonal LDA as the end-use customers identified in a PRD Plan or PRD registration and
that, in terms of the electrical topography of the Transmission Facilities comprising the PJM
Region, is as close as practicable to such loads.
Price Responsive Demand:
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“Price Responsive Demand” or “PRD” shall mean end-use customer load registered by a PRD
Provider pursuant to Reliability Assurance Agreement, Schedule 6.1 that have, as set forth in
more detail in the PJM Manuals, the metering capability to record electricity consumption at an
interval of one hour or less, Supervisory Control capable of curtailing such load (consistent with
applicable RERRA requirements) at each PRD Substation identified in the relevant PRD Plan or
PRD registration in response to a Performance Assessment Interval that triggers a PRD
performance assessment or a Non-PAI Event, and a retail rate structure, or equivalent contractual
arrangement, capable of changing retail rates as frequently as an hourly basis, that is linked to or
based upon changes in real-time Locational Marginal Prices at a PRD Substation level and that
results in a predictable automated response to varying wholesale electricity prices.
Price Responsive Demand Credit:
“Price Responsive Demand Credit” shall mean a credit, based on committed Price Responsive
Demand, as determined under Reliability Assurance Agreement, Schedule 6.1.
Price Responsive Demand Plan or PRD Plan:
“Price Responsive Demand Plan” or “PRD Plan” shall mean a plan, submitted by a PRD
Provider and received by the Office of the Interconnection in accordance with Reliability
Assurance Agreement, Schedule 6.1 and procedures specified in the PJM Manuals, claiming a
peak demand limitation due to Price Responsive Demand to support the determination of such
PRD Provider’s Nominal PRD Value.
Public Power Entity:
“Public Power Entity” shall mean any agency, authority, or instrumentality of a state or of a
political subdivision of a state, or any corporation wholly owned by any one or more of the
foregoing, that is engaged in the generation, transmission, and/or distribution of electric energy.
Qualifying Transmission Upgrades:
“Qualifying Transmission Upgrades” shall have the meaning specified in Tariff, Attachment DD.
Relevant Electric Retail Regulatory Authority:
“Relevant Electric Retail Regulatory Authority” or “RERRA” shall have the meaning specified
in the PJM Operating Agreement.
Reliability Principles and Standards:
“Reliability Principles and Standards” shall mean the principles and standards established by the
Office of the Interconnection that define, among other things, an acceptable probabilistic of loss
of load criteria due to inadequate generation or transmission capability, as amended from time to
time.
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Required Approvals:
“Required Approvals” shall mean all of the approvals required for the Operating Agreement to
be modified or to be terminated, in whole or in part, including the acceptance for filing by FERC
and every other regulatory authority with jurisdiction over all or any part of the Operating
Agreement.
Self-Supply:
“Self-Supply” shall have the meaning provided in Tariff, Attachment DD.
Small Commercial Customer:
“Small Commercial Customer” shall have the same meaning as in the PJM Tariff.
State Consumer Advocate:
“State Consumer Advocate” shall mean a legislatively created office from any State, all or any
part of the territory of which is within the PJM Region, and the District of Columbia established,
inter alia, for the purpose of representing the interests of energy consumers before the utility
regulatory commissions of such states and the District of Columbia and the FERC.
State Regulatory Structural Change:
“State Regulatory Structural Change” shall mean as to any Party, a state law, rule, or order that,
after September 30, 2006, initiates a program that allows retail electric consumers served by such
Party to choose from among alternative suppliers on a competitive basis, terminates such a
program, expands such a program to include classes of customers or localities served by such
Party that were not previously permitted to participate in such a program, or that modifies retail
electric market structure or market design rules in a manner that materially increases the
likelihood that a substantial proportion of the customers of such Party that are eligible for retail
choice under such a program (a) that have not exercised such choice will exercise such choice; or
(b) that have exercised such choice will no longer exercise such choice, including for example,
without limitation, mandating divestiture of utility-owned generation or structural changes to
such Party’s default service rules that materially affect whether retail choice is economically
viable.
Steam Class:
“Steam Class” shall mean an ELCC Class consisting of Unlimited Resources of the steam
technology type and the primary fuel is not coal or nuclear.
Summer-Period Demand Resource:
Summer-Period Demand Resource shall mean, for the 2020/2021 Delivery Year and subsequent
Delivery Years, a resource that is placed under the direction of the Office of the Interconnection,
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and will be available June through October and the following May of the Delivery Year, and will
be available for an unlimited number of interruptions during such months by the Office of the
Interconnection, and will be capable of maintaining each such interruption between the hours of
10:00AM to 10:00PM Eastern Prevailing Time. The Summer-Period Demand Resource must be
available June through October and the following May in the corresponding Delivery Year to be
offered for sale in an RPM Auction, or included as a Summer-Period Demand Resource in an
FRR Capacity Plan for the corresponding Delivery Year.
Summer-Period Energy Efficiency Resource:
Summer-Period Energy Efficiency Resource shall mean, for the 2020/2021 Delivery Year and
subsequent Delivery Years, a project, including installation of more efficient devices or
equipment or implementation of more efficient processes or systems, meeting the requirements
of Reliability Assurance Agreement, Schedule 6 and exceeding then-current building codes,
appliance standards, or other relevant standards, designed to achieve a continuous (during the
summer peak periods as described in Reliability Assurance Agreement, Schedule 6 and the PJM
Manuals) reduction in electric energy consumption that is not reflected in the peak load forecast
prepared for the Delivery Year for which the Summer-Period Energy Efficiency Resource is
proposed, and that is fully implemented at all times during such Delivery Year, without any
requirement of notice, dispatch, or operator intervention.
Supervisory Control:
“Supervisory Control” shall mean the capability to curtail, in accordance with applicable
RERRA requirements, load registered as Price Responsive Demand at each PRD Substation
identified in the relevant PRD Plan or PRD registration in response to a Maximum Generation
Emergency declared by the Office of the Interconnection. Except to the extent automation is not
required by the provisions of the Operating Agreement, the curtailment shall be automated,
meaning that load shall be reduced automatically in response to control signals sent by the PRD
Provider or its designated agent directly to the control equipment where the load is located
without the requirement for any action by the end-use customer.
Threshold Quantity:
“Threshold Quantity” shall mean, as to any FRR Entity for any Delivery Year, the sum of (a) the
Unforced Capacity equivalent (determined using the Pool-Wide Average EFORD through the
2024/2025 Delivery Year, or pool-wide average Accredited UCAP Factor effective with the
2025/2026 Delivery Year) of the Installed Reserve Margin for such Delivery Year multiplied by
the Preliminary Forecast Peak Load for which such FRR Entity is responsible under its FRR
Capacity Plan for such Delivery Year, plus (b) the lesser of (i) 3% of the Unforced Capacity
amount determined in (a) above or (ii) 450 MW. If the FRR Entity is not responsible for all load
within a Zone, the Preliminary Forecast Peak Load for such entity shall be determined in
accordance with Reliability Assurance Agreement, Schedule 8.1, section D.2.
Tracking Solar Class:
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“Tracking Solar Class” shall mean an ELCC Class consisting of Variable Resources that produce
electrical energy with solar panels that are primarily mounted on trackers that align the panels
with incoming sunlight over the course of the day.
Transmission Facilities:
“Transmission Facilities” shall mean facilities that: (i) are within the PJM Region; (ii) meet the
definition of transmission facilities pursuant to FERC’s Uniform System of Accounts or have
been classified as transmission facilities in a ruling by FERC addressing such facilities; and (iii)
have been demonstrated to the satisfaction of the Office of the Interconnection to be integrated
with the PJM Region transmission system and integrated into the planning and operation of the
PJM Region to serve all of the power and transmission customers within the PJM Region.
Transmission Owner:
“Transmission Owner” shall mean a Member that owns or leases with rights equivalent to
ownership Transmission Facilities and is a signatory to the PJM Transmission Owners
Agreement. Taking transmission service shall not be sufficient to qualify a Member as a
Transmission Owner.
Unforced Capacity:
“Unforced Capacity” shall mean installed capacity rated at summer conditions that is not on
average experiencing a forced outage or forced derating, calculated for each Capacity Resource
on the 12-month period from October to September without regard to the ownership of or the
contractual rights to the capacity of the unit.
Unlimited Resource:
“Unlimited Resource” shall mean a generating unit having the ability to maintain output at a
stated capability continuously on a daily basis without interruption. Through the 2024/2025
Delivery Year, an Unlimited Resource is a Generation Capacity Resource that is not an ELCC
Resource.
Variable Resource:
“Variable Resource” shall mean a Generation Capacity Resource or a generation Component
DER within a DER Aggregation Resource that is linked to a DER Capacity Aggregation
Resource, with output that can vary as a function of its energy source, such as wind, solar, run of
river hydroelectric power without storage, and landfill gas units without an alternate fuel source.
All Intermittent Resources are Variable Resources, with the exception of Hydropower with Non-
Pumped Storage.
Winter Peak Load (or WPL):
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“Winter Peak Load” or “WPL” shall mean the average of the Demand Resource customer’s
specific peak hourly load between hours ending 7:00 EPT through 21:00 EPT on the PJM
defined 5 coincident peak days from December through February two Delivery Years prior the
Delivery Year for which the registration is submitted. Notwithstanding, if the average use
between hours ending 7:00 EPT through 21:00 EPT on a winter 5 coincident peak day is below
35% of the average hours ending 7:00 EPT through 21:00 EPT over all five of such peak days,
then up to two such days and corresponding peak demand values may be excluded from the
calculation. Upon approval by the Office of the Interconnection, a Curtailment Service Provider
may provide alternative data to calculate Winter Peak Load, as outlined in the PJM Manuals,
when there is insufficient hourly load data for the two Delivery Years prior to the relevant
Delivery Year or if more than two days meet the exclusion criteria described above.
Zonal Capacity Price:
“Zonal Capacity Price” shall mean the clearing price required in each Zone to meet the demand
for Unforced Capacity and satisfy Locational Deliverability Requirements for the LDA or LDAs
associated with such Zone. If the Zone contains multiple LDAs with different Capacity
Resource Clearing Prices, the Zonal Capacity Price shall be a weighted average of the Capacity
Resource Clearing Prices for such LDAs, weighted by the Unforced Capacity of Capacity
Resources cleared in each such LDA.
Zone or Zonal:
“Zone” or “Zonal” shall refer to an area within the PJM Region, as set forth in Tariff,
Attachment J and RAA, Schedule 15, or as such areas may be (i) combined as a result of mergers
or acquisitions or (ii) added as a result of the expansion of the boundaries of the PJM Region. A
Zone shall include any Non-Zone Network Load located outside the PJM Region that is served
from such Zone under Tariff, Attachment H-A.
Zonal Winter Weather Adjustment Factor (ZWWAF):
“Zonal Winter Weather Adjustment Factor” or “ZWWAF” shall mean the PJM zonal winter
weather normalized coincident peak divided by PJM zonal average of 5 coincident peak loads
in December through February.
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7.2B
Responsibility to Pay RBP Charges and Allocation of RBP Shortfall Credits
RBP Charges, which are calculated in accordance with Tariff, Attachment DD, section
18.5(g)(iii) and RBP shortfall credits that are collected from RBP Sellers pursuant to Tariff,
Attachment DD, section 18.6(d), are allocated to each Electric Distributor zone/area based on the
zone/area’s pro rata share of the total Final RBP Target. To the extent an Electric Distributor has
notified the Office of the Interconnection of RBP Obligation (“RBO”) MW for each Load
Serving Entity in its zone/area, as set forth in Tariff, Attachment DD, section 18.3, the Office of
the Interconnection shall further allocate the RBP Charges, and any RBP shortfall credits, for
that zone/area to each Party to the RAA, i.e. each Load Serving Entity, in the Electric
Distributor’s zone/area in accordance with the Electric Distributor’s notification.
To the extent an Electric Distributor has not notified the Office of the Interconnection of the
RBO MW of each Load Serving Entity in its zone(s)/area(s), the Office of the Interconnection
shall further allocate the RBP Charges and RBP shortfall charges for that zone/area to each Load
Serving Entity in the zone/area based on each Load Serving Entity’s share of the Daily Unforced
Capacity Obligation MW in the zone/area.
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7.2C Provision of RBP Obligations
During the Delivery Year, no later than 36 hours prior to the start of each Operating Day,
the Electric Distributor shall provide to PJM, for each Party to this Agreement serving load in
such Electric Distributor's zone/area, any RBP Obligation (“RBO”) MW. The Electric
Distributor may submit corrections to the RBO MW data up to 12:00PM Eastern Prevailing
Time of the next Business Day following the Operating Day.
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D.
FRR Capacity Plans
1.
Each FRR Entity shall submit its initial FRR Capacity Plan as required by subsection C.1
of this Schedule, and shall annually extend and update such plan by no later than one month prior
to the Base Residual Auction for each succeeding Delivery Year in such plan. Each FRR
Capacity Plan shall indicate the nature and current status of each resource, including the status of
each Planned Generation Capacity Resource or Planned Demand Resource, the planned
deactivation or retirement of any Generation Capacity Resource or Demand Resource, and the
status of commitments for each sale or purchase of capacity included in such plan.
1.1
Beginning with the 2020/2021 Delivery Year and for all subsequent Delivery Years, the
FRR Capacity Plan shall comprise only Capacity Performance Resources and Seasonal Capacity
Performance Resources. An FRR Entity may not use an Existing Generation Capacity Resource
not owned by such FRR Entity as of June 1, 2027 or any resource committed through the
Reliability Backstop Procurement to satisfy its Capacity FRR Plan.
2.
The FRR Capacity Plan of each FRR Entity that commits that it will not sell surplus
Capacity Resources as a Capacity Market Seller in any auction conducted under Attachment DD
of the PJM Tariff, or to any direct or indirect purchaser that uses such resource as the basis of
any Sell Offer in such auction, shall designate Capacity Resources in a megawatt quantity no less
than the Forecast Pool Requirement for each applicable Delivery Year times the FRR Entity’s
allocated share of the Preliminary Zonal Peak Load Forecast for such Delivery Year, as
determined in accordance with procedures set forth in the PJM Manuals. If the FRR Entity is not
responsible for all load within a Zone, the Preliminary Forecast Peak Load for such entity shall
be the Base Zonal FRR Scaling Factor times the summation of the FRR Entity’s MW share of
the Zonal Weather Normalized Summer Peak last determined prior to the Base Residual Auction
for such Delivery Year plus the Obligation Peak Load MW associated with any Load Adjustment
specified for such Delivery Year for any “zone/area” served by the FRR Entity’s Capacity Plan.
The Obligation Peak Load MW associated with a Load Adjustment specified for a “zonal/area”
is determined as set forth in RAA, Schedule 8, section B.
The FRR Capacity Plan of each FRR Entity that does not commit that it will not sell surplus
Capacity Resources as set forth above shall designate Capacity Resources at least equal to the
Threshold Quantity. To the extent the FRR Entity’s allocated share of the Final Zonal Peak
Load Forecast exceeds the FRR Entity’s allocated share of the Preliminary Zonal Peak Load
Forecast, such FRR Entity’s FRR Capacity Plan shall be updated to designate additional
Capacity Resources in an amount no less than the Forecast Pool Requirement times such
increase; provided, however, any excess megawatts of Capacity Resources included in such FRR
Entity’s previously designated Threshold Quantity, if any, may be used to satisfy the capacity
obligation for such increased load. To the extent the FRR Entity’s allocated share of the Final
Zonal Peak Load Forecast is less than the FRR Entity’s allocated share of the Preliminary Zonal
Peak Load Forecast, such FRR Entity’s FRR Capacity Plan may be updated to release previously
designated Capacity Resources in an amount no greater than the Forecast Pool Requirement
times such decrease. Peak load values referenced in this section shall be adjusted as necessary to
take into account any applicable Nominal PRD Values approved pursuant to Schedule 6.1 of this
Agreement. Any FRR Entity seeking an adjustment to peak load for Price Responsive Demand
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must submit a separate PRD Plan in compliance with Section 6.1 (provided that the FRR Entity
shall not specify any PRD Reservation Price), and shall register all PRD-eligible load needed to
satisfy its PRD commitment and be subject to compliance charges as set forth in that Schedule
under the circumstances specified therein; provided that for non-compliance by an FRR Entity,
the compliance charge rate shall be equal to 1.20 times the Capacity Resource Clearing Price
resulting from all RPM Auctions for such Delivery Year for the LDA encompassing the FRR
Entity’s Zone, weight-averaged for the Delivery Year based on the prices established and
quantities cleared in the RPM auctions for such Delivery Year; and provided further that an
alternative PRD Provider may provide PRD in an FRR Service Area by agreement with the FRR
Entity responsible for the load in such FRR Service Area, subject to the same terms and
conditions as if the FRR Entity had provided the PRD.
3.
As to any FRR Entity, the Base Zonal FRR Scaling Factor for each Zone in which it
serves load for a Delivery Year shall equal [(ZPLDY-ZLA) / ZWNSP], where:
ZPLDY = Preliminary Zonal Peak Load Forecast for such Zone for such Delivery Year;
ZLA = the Zonal MW quantity of Load Adjustment for such Delivery Year; and
ZWNSP = Zonal Weather-Normalized Summer Peak Load for such Zone for the summer
concluding four years prior to the commencement of such Delivery Year.
4.
Capacity Resources identified and committed in an FRR Capacity Plan shall meet all
requirements under this Agreement, the PJM Tariff, and the PJM Operating Agreement
applicable to Capacity Resources, including, as applicable, requirements and milestones for
Planned Generation Capacity Resources and Planned Demand Resources. A Capacity Resource
submitted in an FRR Capacity Plan must be on a unit-specific basis, and may not include “slice
of system” or similar agreements that are not unit specific. An FRR Capacity Plan may include
bilateral transactions that commit capacity for less than a full Delivery Year only if the resources
included in such plan in the aggregate satisfy all obligations for all Delivery Years. All demand
response, load management, energy efficiency, or similar programs on which such FRR Entity
intends to rely for a Delivery Year must be included in the FRR Capacity Plan, subject to
applicable demand resource constraints for the relevant Delivery Year, submitted three years in
advance of such Delivery Year and must satisfy all requirements applicable to Demand
Resources or Energy Efficiency Resources, as applicable, including, without limitation, those set
forth in Schedule 6 to this Agreement and the PJM Manuals; provided, however, that previously
uncommitted Unforced Capacity from such programs may be used to satisfy any increased
capacity obligation for such FRR Entity resulting from a Final Zonal Peak Load Forecast
applicable to such FRR Entity. Without limiting the generality of the foregoing, the FRR Entity
must submit a Demand Resource Sell Offer Plan 15 business days before the deadline for
submitting an FRR Capacity Plan as to any Demand Resources it intends to include in such FRR
Capacity Plan and may only include in such FRR Capacity Plan Demand Resources that are
approved by PJM following review of such Demand Resource Sell Offer Plan. The
requirements, standards, and procedures for a Demand Resource Sell Offer Plan shall be as set
forth in Schedule 6 of this Agreement, provided that all references (including deadlines) in
Schedule 6, section A-1 to submission or clearing of a Demand Resource offer in an RPM
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Auction shall be understood for purposes of FRR Entities as referring to inclusion of a Demand
Resource in an FRR Capacity Plan, and a distinct Demand Resource Officer Certification Form
shall be applicable to FRR Entities, as shown in the PJM Manuals and provided on the PJM
website.
5.
For each LDA for which the Office of the Interconnection is required to establish a
separate Variable Resource Requirement Curve for any Delivery Year addressed by such FRR
Capacity Plan, the plan must include a Percentage Internal Resources Required, subject to
subsections D.1.1 and D.2 of this Schedule. The Percentage Internal Resources Required will be
calculated as the LDA Reliability Requirement less the CETL for the Delivery Year, as
determined by the RTEP process as set forth in the PJM Manuals. Such requirement shall be
expressed as a percentage of the Unforced Capacity Obligation based on the Preliminary Zonal
Peak Load Forecast multiplied by the Forecast Pool Requirement. Notwithstanding the
provisions of Sections C.1 and C.2 of this Schedule 8.1, an FRR Entity may terminate its
election of the FRR Alternative prior to meeting its minimum five year commitment
without penalty for any Delivery Year after the first Delivery Year of its minimum five
year FRR commitment for which the Office of the Interconnection will be required to
establish a separate Variable Resource Requirement Curve by giving written notice two
months prior to the Base Residual Auction for the Delivery Year. The Office of the
Interconnection shall be deemed to be required to establish a separate Variable Resource
Requirement Curve for an LDA if the LDA is the Eastern Mid-Atlantic Region
(“EMAR”), Southwest Mid-Atlantic Region (“SWMAR”), or Mid-Atlantic Region
(“MAR”), or for other LDAs if the separate modeling is required by Section
5.10(a)(ii)(A) or (B) of Attachment DD of the Tariff.
6.
An FRR Entity may reduce the Percentage Internal Resources Required as to any LDA to
the extent the FRR Entity commits to a transmission upgrade that increases the CETL for such
LDA. Any such transmission upgrade shall adhere to all requirements for a Qualified
Transmission Upgrade as set forth in Attachment DD to the PJM Tariff. The increase in CETL
used in the FRR Capacity Plan shall be that approved by PJM prior to inclusion of any such
upgrade in an FRR Capacity Plan. The FRR Entity shall designate specific additional Capacity
Resources located in the LDA from which the CETL was increased, to the extent of such
increase.
7.
The Office of the Interconnection will review the adequacy of all submittals hereunder
both as to timing and content. A Party that seeks to elect the FRR Alternative that submits an
FRR Capacity Plan which, upon review by the Office of the Interconnection, is determined not to
satisfy such Party’s capacity obligations hereunder, shall not be permitted to elect the FRR
Alternative. If a previously approved FRR Entity submits an FRR Capacity Plan that, upon
review by the Office of the Interconnection, is determined not to satisfy such Party’s capacity
obligations hereunder, the Office of the Interconnection shall notify the FRR Entity, in writing,
of the insufficiency within five (5) business days after the submittal deadline of the FRR
Capacity Plan. Through the 2024/2025 Delivery Year, if the FRR Entity does not cure such
insufficiency within five (5) business days after receiving such notice of insufficiency, then such
FRR Entity shall be assessed an FRR Commitment Insufficiency Charge, in an amount equal to
two times the Cost of New Entry for the relevant location, in $/MW-day, times the shortfall of
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Capacity Resources below the FRR Entity’s capacity obligation (including any Threshold
Quantity requirement) in such FRR Capacity Plan, for the remaining term of such plan. For
Delivery Years between the 2025/2026 Delivery Year through the 2028/2029 Delivery Year, no
FRR Commitment Insufficiency Charge shall be assessed. Effective with the 2029/2030 Delivery
Year and subsequent Delivery Years, if the FRR Entity does not cure such insufficiency within
five (5) business days after receiving such notice of insufficiency, then such FRR Entity shall be
assessed an FRR Commitment Insufficiency Charge, in an amount equal to the price level
corresponding to point (1) of the Variable Resource Requirement curve, as provided in Tariff,
Attachment DD, section 5.10(a)(i), for the relevant Locational Deliverability Area, in $/MW-
day, times the shortfall of Capacity Resources below the FRR Entity’s capacity obligation
(including any Threshold Quantity requirement) in such FRR Capacity Plan, for such Delivery
Year.
8.
In a state regulatory jurisdiction that has implemented retail choice, the FRR Entity must
include in its FRR Capacity Plan all load, including expected load growth, in the FRR Service
Area, notwithstanding the loss of any such load to or among alternative retail LSEs. In the case
of load reflected in the FRR Capacity Plan that switches to an alternative retail LSE, where the
state regulatory jurisdiction requires switching customers or the LSE to compensate the FRR
Entity for its FRR capacity obligations, such state compensation mechanism will prevail. In the
absence of a state compensation mechanism, the applicable alternative retail LSE shall
compensate the FRR Entity at the capacity price in the unconstrained portions of the PJM
Region, as determined in accordance with Attachment DD to the PJM Tariff, provided that the
FRR Entity may, at any time, make a filing with FERC under Sections 205 of the Federal Power
Act proposing to change the basis for compensation to a method based on the FRR Entity's cost
or such other basis shown to be just and reasonable, and a retail LSE may at any time exercise its
rights under Section 206 of the FPA.
9.
Notwithstanding the foregoing, in lieu of providing the compensation described above,
such alternative retail LSE may, for any Delivery Year subsequent to those addressed in the FRR
Entity’s then-current FRR Capacity Plan, provide to the FRR Entity Capacity Resources
sufficient to meet the capacity obligation described in paragraph D.2 for the switched load. Such
Capacity Resources shall meet all requirements applicable to Capacity Resources pursuant to this
Agreement, the PJM Tariff, and the PJM Operating Agreement, all requirements applicable to
resources committed to an FRR Capacity Plan under this Agreement, and shall be committed to
service to the switched load under the FRR Capacity Plan of such FRR Entity. The alternative
retail LSE shall provide the FRR Entity all information needed to fulfill these requirements and
permit the resource to be included in the FRR Capacity Plan. The alternative retail LSE, rather
than the FRR Entity, shall be responsible for any performance charges or compliance penalties
related to the performance of the resources committed by such LSE to the switched load. For
any Delivery Year, or portion thereof, the foregoing obligations apply to the alternative retail
LSE serving the load during such time period. PJM shall manage the transfer accounting
associated with such compensation and shall administer the collection and payment of amounts
pursuant to the compensation mechanism.
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Such load shall remain under the FRR Capacity Plan until the effective date of any termination
of the FRR Alternative and, for such period, shall not be subject to Locational Reliability
Charges under Section 7.2 of this Agreement.