Dive Brief:

• The Federal Energy Regulatory Commission (FERC) has given the go-ahead to proposed changes to PJM's demand response program.
• The provisions shorten required response time for most providers from two hours to 30 minutes, as well as reduce the minimum run time from two hours to one hour. The changes also set up "pre-emergency load response" -- demand response to be dispatched before peak load times instead of afterwards. These programs will be able to bid in the capacity auction. 
• The only qualms FERC appears to have had with PJM's proposals is a clause exempting behind-the-meter generation from participating as "pre-emergency load response." PJM is to file a report fully justifying its reasoning. The Commission also wants PJM to expand exceptions to the 30-minute response time rule from retail customers to also include small commercial customers with a similar energy profile.  

Dive Insight:

The proposal "balances PJM's need to quickly respond to system emergencies with the needs of demand response resources and appropriately addresses the concerns of demand response resources that may have physical limitations through the proposed exception process," FERC said. But critics of the new rules say they will deter demand response participation in the capacity market, something which FERC denies. 

FERC Commissioner John Norris dissented. "Today's order will provide additional operational flexibility to PJM as the grid operator, but at the expense of imposing additional barriers on demand response that are not comparable to the requirements generators face and that are likely to prove more costly to consumers," he said.

By comparison, Commissioner Tony Clark said PJM's move was a "step in the right direction" and "the question that remains is whether PJM's proposal went far enough."