Meeting #40: Capacity Cost Allocation and Microgrid Issues in PJM

Tuesday, December 8, 2015
10:00am – 3:15pm ET
New Jersey Statehouse Annex
Committee Room 9
125 West State Street, #2
Trenton, NJ 08608


This meeting began to explore two issues that the MADRI community has identified as high priorities for near-term work. First, the MADRI steering committee decided, based on input gained at the last MADRI meeting, to focus some of MADRI’s future activity on exploring ways to better integrate wholesale and retail rate design. To provide some useful background perspectives for that future discussion, the first portion of this meeting focused on how PJM allocates capacity costs and what possible reforms are under consideration. We then heard an example of how one large customer uses sophisticated methods to manage a microgrid and distributed resources in response to wholesale market price signals. In the afternoon, the conversation stayed on the subject of microgrids but turned from operation issues to policy and regulatory issues and opportunities for collaboration across jurisdictions.


9:30 – 10:00am
Networking with attendees

10:00 – 10:15am
The Honorable Betty Ann Kane, Chairman, DC Public Service Commission
Janine Migden-Ostrander, Regulatory Assistance Project (RAP)

10:15 – 11:15am
Latest Thinking on Capacity Cost Allocation
Paul Scheidecker, PJM: Latest Thinking on Capacity Cost Allocation

In this session, a representative of PJM explained how capacity costs are allocated to load. Possible changes to current practices were explored.

11:15am – 12:15pm
Case Study: Operating a Microgrid in Response to Price Signals
Ted Borer, Princeton University & John Webster, ICETEC Energy Services: Energy Production and Distribution At Princeton University

This session provided a relevant case study from a large customer with a microgrid and distributed resources who manages and operates those resources in response to PJM price signals in order to maximize their value.

12:15 – 1:15 pm

1:15 – 2:15pm
Policy and Regulatory Issues for Microgrids in Restructured Energy Markets
John Caldwell, Edison Electric Institute: Utility Business Models for Microgrids

Mr. Caldwell discussed public policy and regulatory issues that can support or hinder the development of microgrids. He explored potential conflicts between utility operation of a distribution system and customer operation of a microgrid.

2:15 - 3:00pm
Opportunities for Collaboration to Maximize Learning from Microgrid Pilots
Dan Cleverdon, DC Public Service Commission Staff
Mike Winka, NJ Board of Public Utilities Staff
Discussion led by Janine Migden-Ostrander, Regulatory Assistance Project

In our final session of the day, we had a group discussion of opportunities for MADRI jurisdictions to collaborate with each other to maximize the learning and benefits that might be obtained from microgrid pilots, public purpose microgrids, etc. This discussion was introduced by staff from MADRI PUCs and then facilitated by RAP.

3:00 – 3:15pm
Wrap-Up, Adjournment
The Honorable Betty Ann Kane, Chairman, DC Public Service Commission
John Shenot, Regulatory Assistance Project