The current PJM market systems (for both DA and balancing energy markets) allow for hourly variation of the price component of all classes of bids and for all classes of offers except those associated with physical generating resources in PJM. Offers for generating units are currently limited to a single daily offer rate for both their cost-based offer and their market-based offer. The single DA offer rate can be modified (although it must remain a single value for the entire market day) within the 4-6 PM rebid period if a unit is not picked up in the DA market. [PJM recently instituted a limited capability for unit operators to update their cost-based offers intra-day, but this was recognized by all as only a first step toward a more robust solution.] These limits on the ability of operators of physical resources to reflect hour by hour changes in the cost of fuel, the everyday difference in fuel prices on successive gas days within a single electric day or any other opportunity for enhanced operational flexibility in their offers impact negatively on their ability to reflect offer price updates that could have a beneficial impact on market results.
ISO-NE, NYISO, MISO, ERCOT and Cal-ISO all have developed market systems and related business rules that allow generating resources to make offers with prices that vary hour by hour in the DA market, and further allow resource operators to change offer prices hour by hour during real time operations to reflect changing fuel prices or other operational flexibility opportunities. PJM and stakeholders should undertake an effort to develop and implement similar capabilities for the PJM energy markets as already exist in other RTO markets in the US.