PJM Demand Response Programs (Mid-Atlantic/Midwest)

PJM Interconnection operates the wholesale electricity market and manages the high-voltage grid across 13 states and the District of Columbia. PJM has a robust capacity market (Reliability Pricing Model - RPM) where Demand Response is a significant resource, alongside energy and ancillary service markets.

C&I customers typically participate in PJM DR programs through Curtailment Service Providers (CSPs).

Key PJM DR Programs for C&I

Capacity Performance DR (Load Management)

• Administered By: PJM (via CSPs)
• Type: Emergency/Capacity
• Goal: Provide reliable load reductions during grid emergencies (Peak Shaving or Emergency Load Response events) to meet capacity obligations.
• Participation: C&I loads (typically ≥100 kW, aggregated by CSPs) commit to providing firm load reductions. Under Capacity Performance (CP) rules, resources must generally be available year-round (or paired summer/winter resources).
• Response: Typically respond within 30 minutes to 2 hours of PJM notification during emergencies (voltage reductions, capacity shortages).
• Baseline: PJM uses a Customer Baseline Load (CBL) methodology (e.g., High 4-of-5 similar days, weather-adjusted).
• Stackability: A resource providing capacity DR cannot simultaneously count towards another capacity obligation. However, it *can* participate in the Economic DR energy market when not called for an emergency.
• Incentives: Earns capacity payments based on PJM's RPM auction clearing prices. These prices can be highly volatile - ranging from ~$18/kW-year in 2022/23 to a record high near ~$98.5/kW-year (RTO average) for the 2025/26 delivery year, with even higher prices in constrained zones. Participants may also earn energy payments (LMP) if dispatched.
• Penalties: Strict penalties under Capacity Performance. Failure to perform during a mandatory event (Performance Assessment Hour) can result in significant financial charges, potentially forfeiting much of the annual capacity revenue. Bonuses paid for over-performance during scarcity.

Synchronized Reserve (SR) Program

• Administered By: PJM (via CSPs)
• Type: Ancillary Service (fast contingency reserve)
• Goal: Provide quick-start reserves (similar to spinning reserve) available within 10 minutes to respond to grid contingencies.
• Participation: C&I loads (aggregated ≥0.1 MW) with automation capable of curtailing within 10 minutes of a PJM dispatch signal.
• Response: Within 10 minutes.
• Baseline: CBL or telemetry-based baseline used to measure the drop during short events (typically 10-30 minutes).
• Stackability: Cannot provide SR and Capacity DR simultaneously for the same MW, but capacity can be split, or participation can be sequential.
• Requirements: Telemetry and ability to respond quickly to PJM signals via CSP systems often required.
• Incentives: Earns market-clearing prices ($/MW-hour) for hours committed to being available for SR, plus potential energy payments if dispatched. Reserve prices vary but can spike during tight conditions.
• Penalties: Non-performance can result in penalties or disqualification from the SR market.

Economic Demand Response (Price-Responsive Demand)

• Administered By: PJM (via CSPs)
• Type: Economic (voluntary energy market participation)
• Goal: Allow customers to reduce load voluntarily when energy prices are high, effectively acting as a supply resource.
• Participation: Any C&I customer with interval metering (often ≥100 kW practical minimum via CSP) can participate. Customers (via CSPs) submit bids indicating the price ($/MWh) at which they are willing to curtail.
• Response: If market prices (LMP) exceed the bid price, PJM dispatches the curtailment. Response time dictated by market (day-ahead or real-time).
• Baseline: Approved baseline method (similar to CBL) required for settlement.
• Stackability: Can be done in addition to being a capacity resource (and often expected).
• Requirements: Interval metering. Telemetry not typically required for energy-only participation (settlement is after-the-fact).
• Incentives: Paid the Locational Marginal Price (LMP) for measured energy reduction (MWh). Also achieves bill savings by avoiding high energy costs.
• Penalties: Generally no penalties for not curtailing if bid into real-time (it's voluntary). Failure to meet a day-ahead commitment could incur deviation charges.

Other PJM Programs

• Regulation Market: Very fast-responding resources (often batteries at C&I sites, not just pure load) can participate in frequency regulation, responding to PJM signals every few seconds. Requires advanced telemetry and controls.

PJM Program Comparison Summary

Disclaimer: Incentive values, especially capacity prices, are highly volatile and depend on specific auction results, location, and program rules. Always consult official PJM documentation and your CSP for current program details and potential earnings.