The existing requirement that a facility participating in the capacity market as a Hybrid Resource must also
operate as a Hybrid Resource in the Energy and Ancillary Services Markets is presenting several
challenges. Not only is coordinating two technologies to operate as a single market unit technically difficult,
where different components have different offtakers, the hybrid model necessitates that the Market Seller
separate out and assign the appropriate credits and charges for what is essentially one market unit with
one market settlement to different entities. This impacts the viability of mixed-technology projects. While,
typically, Mixed Technology Facilities (MTF) can opt to operate the different technologies as independent
market units, facilities interconnecting via the Surplus Interconnection Service (SIS) do not have this option
if they desire to participate in the capacity market. Because SIS resources do not have their own CIRs, they
must become a Hybrid Resource with the existing technology to obtain capacity value. Once modeled as a
Hybrid Resource in the RPM, they then must operate as a hybrid in the Energy and Ancillary Services
Markets. The requirement that projects modeled as a Hybrid Resource operate as a Hybrid Resource in the
Energy and AS Markets or not receive capacity value at all, is limiting the potential of the SIS process to
yield additional UCAP for the PJM region at a time when new capacity is deeply needed. This Issue Charge
proposes to review PJM’s rules regarding the Energy and Ancillary Service market election for resources
modeled as a Hybrid Resource for the purposes of the capacity market.