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PJM Pays Customers to Cut Power Loads

PJM Pays Customers to Cut Power Loads

In an attempt to alleviate stresses on the power grid in the Mid-Atlantic region this summer, the PJM Interconnection L.L.C. has initiated a pilot program under which it will pay electric customers to reduce their electric loads during emergency situations.

Under its customer load-reduction program, PJM will pay market participants that have the ability to self-generate via on-site facilities or that can measurably reduce their loads though other means (conservation) during PJM emergency events. PJM's program, which still is awaiting FERC approval, began July 8 and is expected to remain in effect until Sept. 30.

PJM said it initiated the program in response to FERC's May 17 order announcing a number of interim measures that industry could take to increase generation supplies and improve the reliability of the nation's transmission grid this summer.

Eligible candidates must be PJM members that can completely disconnect from the grid and supply their own power load via self-generation, or be able to reduce a "measurable and verifiable portion" of its load via conservation/efficiency measures or other methods, according to PJM.

Specifically, candidates must be able to reduce their load by at least 100 kW during a minimum of 10 hours between July 8-Sept. 30, be able to achieve full reduction within one hour of PJM's request to reduce load, be available between the hours of 9 a.m. and 10 p.m. seven days a week, and meet certain metering requirements. The metering equipment must be capable of providing "integrated hourly kWh values.....with a maximum of two percent error end-to-end," and be able to measure actual load before and after a reduction request.

PJM said the $5,000 annual membership fee and the $1,500 application fee will be waived for participants during the pilot.

PJM noted that it will pay the appropriate zonal locational marginal price or $500/MWh, whichever is higher, to pilot participants that reduce their electric loads during emergency power situations.

"We are excited about this program that will provide an important resource during times of high electricity usage. The program will augment the region's well-established emergency procedures," said Bruce Balmat, vice president of system operations. Further information on PJM's load-reduction pilot can be found on its website

PJM operates the Mid-Atlantic energy and capacity markets. It administers almost 8% of the nation's electric power supply, with a pooled generating capacity of more than 58,000 MW and a membership of more than 190.

Susan Parker

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