How PJM turns redispatch into market signals.
Bruce W. Radford is Editor-in-Chief of Public Utilities Fortnightly.
Figures 1 and 2 show an example of locational marginal pricing (LMP) presented by PJM at a FERC meeting held Jan. 22.
Figure 1 depicts a closed electric system serving three cities-Sundance, Solitude and Park City-with power plants at Brighton, Alta, Park City and Sundance. The ISO dispatches the Sundance plant at only 90 MW of its 200-MW capacity, since the Sundance plant offers its output at a higher price than the other plants ($30/MWh) and 90 MW is all that's needed to satisfy the 900 MW total load of the system.
But something's amiss. The dispatch plan pushes the E-D transmission line over its thermal limit. The ISO must redispatch the system to recognize security constraints.
PJM's Andrew Ott (general manager for market coordination) explains how the ISO fixes the problem, as shown in Figure 2: