Options for Intermittent and Seasonal Resources for 2020/21 and beyond

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Clarissa Holland
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1 Options for Intermittent and Seasonal Resources for 2020/21 and beyond April 26,

2 Base Capacity Resources Base Capacity Resources are resources that are not capable of sustained, predictable operation throughout the entire Delivery Year. Such resources may include: generation resources with output that can vary as a function of its energy source, such as wind, solar, landfill gas, run of river hydroelectric power and other renewable resources environmentally limited generation resources summer-only DR and EE storage resources including any hydroelectric power plant, flywheel, battery storage, or other such facility solely used for short term storage and injection of energy at a later time 2

river hydroelectric power and other renewable resources environmentally limited generation resources summer-only DR and EE storage resources including any

3 Transition to Single Capacity Performance Product For the 2018/2019 and 2019/2020 Delivery Years, Base Capacity Resources may offer into RPM Auctions subject to limits on the maximum quantity of such resources that can be procured in the auctions maximum limits recognize the lower reliability value of these seasonally-limited resources relative to resources that provide year-round capacity availability (i.e., CP) accordingly, the seasonally-limited resources may realize a lower RPM clearing price as compared to the clearing price for CP resources that can provide predictable, sustainable operation across an entire delivery year Effective with the 2020/2021 Delivery Year, PJM will only procure CP capacity in each auction 3

4 RPM Participation Options for Intermittent Resources 2020/2021 and beyond Participate as stand-alone resource at levels that recognize risk of nonperformance based on expected output during Performance Assessment Hours Offering at lower CP commitment quantity reduces risk of non-performance during PAHs and increases quantity eligible for Bonus Performance during PAHs (Bonus Performance MWs for actual energy delivered above committed quantity) Lower capacity market revenues offset by additional revenues during PAHs Combine with other intermittent/storage/seasonal-limited DR/EE resources to form an Aggregate Resource representing the aggregated UCAP value of the individual resources 4

Bonus Performance during PAHs (Bonus Performance MWs for actual energy delivered above committed quantity) Lower capacity market revenues offset by additional revenues

5 RPM Participation Options for Summer-only DR 2020/2021 and beyond Participate as economic DR: Paid full LMP for energy reductions with associated make whole for shutdown cost Reduce PLC (reduce capacity charge) if dispatched during 5CP eligible for Bonus Performance if dispatched during PAH Aggregate end-use sites within elrs registration process to provide integrated stand-alone DR resource that provides year-end capacity availability Combine with other intermittent/storage/seasonal-limited DR/EE resources to form an Aggregate Resource representing the aggregated UCAP value of the individual resources 5

end-use sites within elrs registration process to provide integrated stand-alone DR resource that provides year-end capacity availability Combine with

6 Capacity Performance ability to aggregate to meet annual requirement CP resource Resource Aggregation DR Intermittent (Wind) Environmental Limited Generation Energy Efficiency Grocery Store Factory Home DR customer Aggregation 6

Intermittent (Wind) Environmental Limited Generation

7 Aggregate Resource Requirements Applicable to Intermittent Resources, Capacity Storage Resources, DR, EE Resources, and environmentally limited resources Individual resources that comprise the Aggregate Resource offer must be in the same RPM account (i.e. parties must actively identify candidate resources for aggregation and enter into agreements with candidate resource owners) Resources being combined must be located in the same modeled LDA Provide support that aggregation provides a higher level of CP (in UCAP MWs) than the individual resources could otherwise provide themselves; to ensure aggregation is not merely being set up for portfolio netting purposes Aggregate Resource MW commitment must be allocated among component resources daily in order to properly determine Performance Shortfall/Bonus Performance of the Aggregate Resource 7

ate Resource offer must be in the same RPM account (i.e. parties must actively identify candidate resources for aggregation and enter into agreements with candidate resource owners) Resources being

8 Modeled LDA for Aggregate Resource Rest of RTO Rest of MAAC Rest of EMAAC Rest of PS PS North DPL South PEPCO Rest of ATSI ATSI-Cleveland COMED BGE PPL 2018/2019 DY - Locational Requirements for Resources Comprising Aggregate Resources comprising aggregate must reside in Zone(s)/Sub-zone AEP, APS, DAYTON, DEOK, DLCO, DOM, or EKPC METED or PENELEC AE, Rest of DPL, PECO, JCPL, or RECO Rest of PS PS North DPL South PEPCO Rest of ATSI ATSI-Cleveland COMED BGE PPL 8

Resources comprising aggregate must reside in Zone(s)/Sub-zone AEP, APS, DAYTON, DEOK, DLCO, DOM, or EKPC METED or

2019/2020 RPM Base Residual Auction Results

2019/2020 RPM Base Residual Auction Results Executive Summary The 2019/2020 Reliability Pricing Model (RPM) Base Residual Auction (BRA) cleared 167,305.9 MW of unforced capacity in the RTO. Accounting for load and resource commitments under the