PJM Interconnection, L.L.C. Second Revised Sheet No. 33

Rate Schedule FERC No. 44 Superseding First Revised Sheet No. 33

Issued By: Craig Glazer Effective: March 27, 2009

Vice President, Federal Government Policy

Issued On: December 12, 2008

SCHEDULE 6

PROCEDURES FOR DEMAND RESOURCES, ILR, AND ENERGY EFFICIENCY

A. Parties can partially or wholly offset the amounts payable for the Locational Reliability 

Charge with Demand Resources or ILR that are operated under the direction of the Office 

of the Interconnection. FRR Entities may reduce their capacity obligations with Demand 

Resources that are operated under the direction of the Office of the Interconnection and 

detailed in such entity’s FRR Capacity Plan. Demand Resources qualifying under the 

criteria set forth below may be offered for sale or designated as Self-Supply in the Base 

Residual Auction, included in an FRR Capacity Plan, or offered for sale in any 

Incremental Auction, for any Delivery Year for which such resource qualifies. In 

addition, for Delivery Years through May 31, 2012, resources qualifying under the 

criteria set forth below may be certified as ILR on behalf of a Party that has not elected 

the FRR Alternative for a Delivery Year no later than three months prior to the first day 

of such Delivery Year. Qualified Demand Resources and ILR generally fall in one of

three categories, i.e., Guaranteed Load Drop, Firm Service Level, or Direct Load Control, 

as further specified in section H and the PJM Manuals. Qualified Demand Resources and 

ILR may be provided by a Demand Resource Provider or ILR Provider (hereinafter, 

“Provider”), notwithstanding that such Provider is not a Party to this Agreement. Such 

Providers must satisfy the requirements in section I and the PJM Manuals.

1. A Party must formally notify, in accordance with the requirements of the PJM 

Manuals and paragraph G of this schedule as applicable, the Office of the 

Interconnection of the Demand Resource or ILR that it is placing under the 

direction of the Office of the Interconnection.

2. A Party must agree to reserve, for interruption at the direction of the Office of the 

Interconnection, at least 10 interruptions per Planning Period.

3. The Demand Resource or ILR must be available during the summer period of 

June through September in the corresponding Delivery Year to be certified, 

offered for sale or Self-Supplied in an auction, or included as a Demand Resource 

in an FRR Capacity Plan for the corresponding Delivery Year.

4. A period of no more than 2 hours prior notification must apply to interruptible 

customers.

5. The initiation of load interruption, upon the request of the Office of the 

Interconnection, must be within the authority of the dispatchers of the Party. No 

additional approvals should be required.

6. The initiation of load reduction upon the request of the Office of the 

Interconnection is considered an emergency action and must be implementable 

prior to a voltage reduction.
PJM Interconnection, L.L.C. Second Revised Sheet No. 34

Rate Schedule FERC No. 44 Superseding First Revised Sheet No. 34

Issued By: Craig Glazer Effective: March 27, 2009

Vice President, Federal Government Policy

Issued On: December 12, 2008

7. A Party must agree to reserve interruptions of at least 6-hour duration. As a 

minimum, such 6-hour duration for interruptions should be available on weekdays 

during the 8-hour daily peak window for the appropriate season. There will be no 

credit given to Parties who choose to provide interruption less than 6 hours and/or 

exclusive of the above time period.

8. An entity offering for sale, designating for self-supply, or including in any FRR 

Capacity Plan any Planned Demand Resource must demonstrate, in accordance 

with standards and procedures set forth in the PJM Manuals, that such resource 

shall have the capability to provide a reduction in demand, or otherwise control 

load, on or before the start of the Delivery Year for which such resource is 

committed. Providers of Planned Demand Resources must provide a timeline 

including the milestones, which demonstrates to PJM’s satisfaction that the 

Planned Demand Resources will be available for the start of the Delivery Year, 45 

days prior to a Base Residual Auction or Incremental Auction. PJM may verify 

the Provider’s adherence to the timetable at any time.

9. Selection of a Demand Resource in an RPM Auction results in commitment of 

capacity to the PJM Region. Demand Resources that are so committed must be 

registered to participate in the Full Program Option of the Emergency Load 

Response program and thus available for dispatch during PJM-declared 

emergency events. 

B. The Unforced Capacity value of a Demand Resource and ILR will be determined as:

the product of the Nominated Value of the Demand Resource, or the Nominated Value of 

the ILR, times the DR Factor, times the Forecast Pool Requirement. Nominated Values 

shall be determined and reviewed in accordance with sections J and K, respectively, and 

the PJM Manuals. The DR Factor is a factor established by the PJM Board with the 

advice of the Members Committee to reflect the increase in the peak load carrying 

capability in the PJM Region due to Demand Resources and ILR. Peak load carrying 

capability is defined to be the peak load that the PJM Region is able to serve at the loss of 

load expectation defined in the Reliability Principles and Standards. The DR Factor is 

the increase in the peak load carrying capability in the PJM Region due to Demand 

Resources and ILR, divided by the total Nominated Value of Demand Resources and ILR 

in the PJM Region. The DR Factor will be determined using an analytical program that 

uses a probabilistic approach to determine reliability. The determination of the DR 

Factor will consider the reliability of Demand Resources and ILR, the number of

interruptions, and the total amount of load reduction.