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Brattle Report: Enabling Cost-Effective Energy Efficiency in PJM’s Capacity Market

July 1, 2022

Brattle Report: Enabling Cost-Effective Energy Efficiency in PJM’s Capacity Market offers suggestions for ensuring accurate and consistent treatment of energy efficiency resources (“EERs”) in PJM Interconnection, L.L.C.’s (“PJM”) capacity market in which EERs have long played an important role in ensuring that resource adequacy needs are met at the lowest possible cost to consumers. As PJM and its stakeholders consider a wide array of changes to the existing capacity market construct, The Brattle Group explains that continuing to allow EERs to participate as a supply-side capacity resource is proper because such participation accounts for the contributions of EERs to resource adequacy and also provides appropriate incentives for EERs to be developed to improve resource adequacy. The Brattle Group also recommends relying on “adjusted gross” accounting to accurately measure real and verified EER contributions to resource adequacy.  In contrast, a “net” accounting or a causation test would only provide a partial picture of EERs and their important contributions to resource adequacy in the PJM region. 

Download the report here