Quantifying the Amount and Economic Impacts of Missing Energy Efficiency in PJM’s Load Forecast
Prepared for The Sustainable FERC Project
In ISO New England (ISO-NE) and the New York ISO (NYISO), targeted efforts have been undertaken to capture the effects of existing and planned energy efficiency programs that may be unaccounted for in the forecasting process. Such targeted efforts do not exist for the PJM Interconnection (PJM). This project was undertaken to examine whether there is any “missing energy efficiency” in PJM since it might represent an opportunity for reducing environmental impacts and customer costs.
PJM’s load forecast currently accounts for energy efficiency (EE) in two ways: (1) historical efficiency embedded in econometric forecasts, and (2) supply-side EE that clears in the Reliability Pricing Model (RPM). However, this approach does not capture the existing EE that did not bid into/clear in the RPM, or any new/incremental EE programs predicted beyond the three year forward capacity market window. As noted above, both ISO-NE and NYISO have addressed these issues in their load forecasting processes to account for the full effects of the EE investments and produce a more accurate load forecast.
