Given the increased magnitude and volatility of these charges, as well as stakeholder concern regarding the allocation mechanism in certain circumstances, an effort to examine and revise the entire Operating Reserve construct is necessary, including the sources of these charges and the allocation methodology. Stakeholders should be tasked with creating new methodologies that have the potential to minimize uplift costs while ensuring market prices are consistent with operational reliability needs, decrease charge rates, and reduce transaction risk due to variable fees while maintaining and preserving key principles that underlie current market mechanisms: • Transparency of Locational Marginal Pricing • Alignment of the Day-Ahead results with the Real-Time Market • Commitment in the least costly manner, subject to maintaining reliability in the PJM region • Accurate representation of actual Real-Time operating conditions in the Day-Ahead energy market • Equitable allocation of costs consistently between markets based on cost causation/benefit principles • Simplification and transparency of the calculations and methodologies for both PJM & stakeholders Therefore, PJM requests that stakeholders perform a holistic review of the rules related to Operating Reserves and explore potential improvements to streamline and enhance them.