FERC to Treat PJM Demand Response Measurement Statement As If Never Issued

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March 4, 2011  

FERC said yesterday that it will treat a joint statement from PJM and the Independent Market Monitor regarding the Guaranteed Load Drop (GLD) baseline methodology for measuring demand response, "as if it were never issued."

In the joint statement issued in early February, PJM and the IMM said that an end-use customer may curtail its load due to incentives outside of PJM’s load reduction program (e.g., to reduce its peak load contribution [PLC] or to satisfy a retail rate contract), and thus show substantial over-compliance during an emergency event by using a baseline load that includes its full load levels, rather than its managed load levels that enabled a lower PLC. PJM and the IMM indicated that this apparent over-compliance is not performance under the PJM load management program and thus it is not appropriate for an aggregator of retail customers to use this over-compliance to offset underperforming resources. The joint statement said that future occurrences of this behavior could result in referrals to FERC's Office of Enforcement.

EnerNOC said that such behavior is permitted under the PJM tariff as it currently exists, and sought a declaratory order from FERC stating such.

"We will not consider the issuance of the Joint Statement in any of our considerations regarding market manipulation, and will treat it as if it were never issued. In this fashion, market participants will be placed in exactly the same situation that they were prior to the Joint Statement," FERC said.

FERC also, "clarif[ied] that – until further notice – this Commission does not intend to institute any enforcement actions against EnerNOC (or other similarly situated [aggregators of retail customers]) for registering customers in good faith and settling under the GLD baseline methodology."

However, while, "[g]ood faith participation in the PJM load management programs, including accurate customer GLD registration and aggregation during emergency events, is permitted," FERC said that, "our finding here does not exempt from challenge conduct prohibited under section 1c.2 of the Commission’s regulations."

FERC's order was without prejudice to any future section 205 or 206 filing regarding the GLD methodology.

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