Markets & Operations

Energy Offer Verification

To comply with FERC Order 831, PJM is implementing a verification process for cost-based incremental offers above $1,000/megawatt-hour, effective November 1, 2017 (pending FERC approval of the process). This will ensure that a cost-based incremental energy offer reasonably reflects a resource’s actual or expected costs.

Offer Cap Requirements

  1. A resource’s incremental energy offer must be capped at $1,000/MWh or the resource’s cost-based incremental energy offer, whichever is higher. Cost-based incremental energy offers must be capped at $2,000/MWh for the purpose of calculating Locational Marginal Prices.
  2. The costs underlying a cost-based incremental energy offer above $1,000/MWh must be verified before it can be used to calculate Locational Marginal Prices. If a resource submits an incremental energy offer above $1,000/MWh and the underlying costs cannot be verified before the market clearing process begins, the offer may not be used to calculate Locational Marginal Prices. In this case, the resource would be eligible for a make-whole payment if it is dispatched and its costs are verified after the fact. A resource would also be eligible for a make-whole payment if it is dispatched and its verified cost-based incremental energy offer exceeds $2,000/MWh.
  3. All resources, regardless of type, are eligible to submit cost-based incremental energy offers in excess of $1,000/MWh.

Supporting Documents

 

FERC Order 831PDF
Market Implementation Committee materials
Variance PaperPDF
PJM’s Compliance Filing Docket No. ER17-1567PDF

Manuals

 
M-11: Energy & Ancillary Services Market Operations 
CurrentRedlinePDF
Attachment C: Procedure for Cost Adjustment
Attachment D: Verification of Cost Offers greater than $2,000/MWh

Contact PJM

Other Contacts

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(866) 400-8980
(610) 666-8980

Energy Offer Verification

Training

 
August 7
September 15