We have been commissioned by PJM Interconnection (PJM) to evaluate the parameters and shape of the administrative Variable Resource Requirement (VRR) curve used to procure capacity under the Reliability Pricing Model (RPM), as required periodically under the PJM Tariff. For this Fifth Quadrennial Review, we have had more substantial opportunities to gather stakeholder feedback than in past reviews, including several rounds of stakeholder presentations and feedback sessions on preliminary analysis, in addition to individual meetings with stakeholder groups and the Independent Market Monitor (IMM).
Additionally we conducted this Fifth Quadrennial Review with special attention to PJM’s Board and stakeholder stated priorities, which have emphasized three specific focus areas:
- Appropriate levels of procurement needed to support the PJM’s one-event-in-ten-years (“1- in-10”), or 0.1 loss of load events (LOLE) per year reliability standard;
- Uncertainty in Net CONE and the reference technology used for anchoring the VRR Curve; and
- Changing resource mix in PJM and impact of potential reforms that may materialize from the Resource Adequacy Senior Taskforce (RASTF).
We have conducted the entirety of this Quadrennial Review in light of the overarching design objectives of the RPM, with a particular emphasis on these focus areas.