Approved DR Caps Raise Capacity Prices
Jan 31, 2014

With demand response capped in PJM, capacity prices could soar.

As a result of FERC-approved demand response caps, Limited and Summer DR is now limited to 10% of PJM’s reliability requirement, with Limited DR providing no more than 4% of this. These new rules were requested by PJM. The regional transmission organization believes the rule changes will help improve overall grid stability and reliability.

In light of these new DR caps, our advice to anyone within the PJM territory interested in pursuing demand response, is to try and enroll in DR as soon as possible.  Space for upcoming years will be more restrictive than in recent ones.

Also, PJM’s own simulations have shown that the approved DR caps could significantly increase capacity prices by as much as $1.8 billion over two years. As your energy consulting firm, Alternative Utility Services can work with you to mitigate this cost increase.

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