In order to ensure adequate power supplies, PJM procures commitments from resources to be available to supply electricity when needed. PJM does this through a three-year forward capacity market, the Reliability Pricing Model (RPM). Resources can include generation, demand response and energy efficiency. RPM uses a Variable Resource Requirement (VRR) curve, an administratively determined representation of demand, to determine the level of capacity procured in the RPM auction.
The PJM Open Access Transmission Tariff (OATT) requires a periodic assessment of key parameters of the VRR curve. PJM hired The Brattle Group to conduct this assessment, the “Quadrennial Review“. This, the fourth such review of VRR curve parameters, involves reviewing the Cost of New Entry, the methodology used to determine Energy & Ancillary Service Revenues, and the shape of the VRR curve. This review helps to ensure that the RPM continues to support reliability objectives cost-effectively.