SCHEDULE 6A
Black Start Service

References to section numbers in this Schedule 6A refer to sections of this Schedule 6A, unless otherwise specified.

To ensure the reliable restoration following a shut down of the PJM transmission system, Black Start Service is necessary to facilitate the goal of complete system restoration.  Black Start Service enables the Transmission Provider to designate specific generators called Black Start Units whose location and capabilities are required to re-energize the transmission system following a system-wide blackout.  The Transmission Provider shall administer the provision of Black Start Service.  PJMSettlement shall be the Counterparty to the purchases and sales of Black Start Service. 

TRANSMISSION CUSTOMERS

1. All Transmission Customers and Network Customers must obtain Black Start Service through the Transmission Provider, with PJMSettlement as the Counterparty, pursuant to this Schedule 6A.

PROVISION OF BLACK START SERVICE

2. A Black Start Unit is a generating unit that has equipment enabling it to start without an outside electrical supply or a generating unit with a high operating factor (subject to Transmission Provider concurrence) with the demonstrated ability to automatically remain operating, at reduced levels, when disconnected from the grid.  A Black Start Unit shall be considered capable of providing Black Start Service only when it meets the criteria set forth in the PJM manuals.  The expected life of the Black Start Unit shall take into consideration expectations regarding both the enabling equipment and the generation unit itself.

A Fuel Assured Black Start Unit is a Black Start Unit that is capable of starting without an outside electrical supply and running 16 hours or more at full load and either stores at least 16 hours of fuel on site, can operate independently on 2 or more interstate pipelines, is directly connected to a natural gas gathering system or is an intermittent or hybrid resource that has been evaluated by the Transmission Provider to be capable of providing no less than 16 hours of operation per day, which need not be continuous, at a megawatt level that provides a confidence level of 90% based on an evaluation of the unit's historical operation over a representative period of time, and meets any other requirements specified in the PJM manuals.  Distributed energy resources interconnected to distribution facilities may qualify as Fuel Assured Black Start Units under the criteria that applies to all Fuel Assured Black Start Units.  Unless otherwise specified as only applicable to Fuel Assured Black Start Units, all terms and conditions set forth in this Tariff, Schedule 6A applicable to Black Start Units shall be deemed to include Fuel Assured Black Start Units.

3. A Black Start Plant is a generating plant that includes one or more Black Start Units.  A generating plant with Black Start Units electrically separated at different voltage levels will be considered multiple Black Start Plants. 

4. The Transmission Provider is responsible for developing a coordinated and efficient system restoration plan that identifies all of the locations where Black Start Units are needed.  The PJM Manuals shall set forth the criteria and process for selecting or identifying the Black Start Units necessary to commit to providing Black Start Service at the identified locations. No Black Start Unit shall be eligible to recover the costs of providing Black Start Service in the PJM Region unless it agrees to provide such service for a term of commitment established under section 5, 6, or 6A below.

5. Owners of Black Start Units selected to provide Black Start Service in accordance with Schedule 6A, section 4 and electing to forego any recovery of new or additional Black Start Capital Costs shall commit to provide Black Start Service from such Black Start Units for an initial term of no less than two years and authorize the Transmission Provider to resell Black Start Service from its Black Start Units.  The term commitment shall continue to extend until the Black Start Unit owner or the Transmission Provider provides written, one-year advance notice of its intention to terminate the commitment or the commitment is involuntarily terminated pursuant to section 15 of this Schedule 6A.  Black Start Units that are selected to provide Black Start Service after June 6, 2021, pursuant to Schedule 6A, section 6 that subsequently transition from the Capital Cost Recovery Rate to the Base Formula Rate shall have a lifetime commitment and can only terminate for the reason specified in Schedule 6A, section 6(ii).

6. (i)  Owners of Black Start Units making capital investment prior to June 6, 2021, in order to provide or continue to provide Black Start Service in accordance with section 4 of this Schedule 6A and electing to recover new or additional Black Start Capital Costs shall commit to provide Black Start Service from such Black Start Units for a term based upon the age of the Black Start Unit or the longest expected life of the Incremental Black Start Capital Cost, as set forth in the applicable CRF Table in section 18 of this Schedule 6A.  For those Black Start Units that elect to recover new or additional Black Start Capital Costs in addition to a prior, FERC-approved cost recovery rate, the applicable commitment period shall be the longer of the FERC-approved recovery period or the applicable term of commitment as set forth in the CRF Table in section 18 of this Schedule 6A.  The Transmission Provider may terminate the commitment with one year advance notice of its intention to the Black Start Unit owner, but the Black Start Unit owner shall be eligible to recover any amount of unrecovered Fixed Black Start Service Costs over a period not to exceed five years.  A Black Start Unit owner may terminate the provision of Black Start Service with one year advance notice and consent of the Transmission Provider (or its commitment period may be involuntarily terminated pursuant to the section 15 below).  Such Black Start Unit shall forego any otherwise existing entitlement to future revenues collected pursuant to this Schedule 6A and fully refund any amount of the Black Start Capital Costs recovered under a FERC-approved rate (recovered on an accelerated basis pursuant to the provisions of section 17(i) of this Schedule 6A) in excess of the amount that would have been recovered pursuant to section 18 of this Schedule 6A during the same period.  At the conclusion of the term of commitment established under this section 6 of this Schedule 6A, a Black Start Unit shall commence a new term of commitment under either section 5 or 6 of this Schedule 6A, as applicable.

 (ii)  Owners of Black Start Units making capital investment after June 6, 2021, in order to provide Black Start Service, in accordance with Schedule 6A, section 4 and electing to recover new or additional Black Start Capital Costs shall commit to provide Black Start Service from such Black Start Units for an initial capital recovery period based upon the age of the Black Start Unit plus the remaining life of the Black Start equipment.  For those Black Start Units that elect to recover new or additional Black Start Capital Costs in addition to a prior, FERC-approved cost recovery rate, the applicable commitment period shall be the longer of the FERC-approved recovery period or the initial capital recovery period based upon the age of the Black Start Unit plus the remaining life of the Black Start equipment. 

 (iii) Black Start Units selected to be Fuel Assured Black Start Units in accordance with Schedule 6A, section 4 and electing to recover new or additional Fuel Assurance Capital Costs or new and additional Fuel Assurance Costs and Black Start Capital Costs shall commit to provide Black Start Service from such Black Start Units for an initial capital recovery period based upon the age of the Black Start Unit plus the remaining life of the Black Start equipment.  For those Fuel Assured Black Start Units that elect to recover new or additional Black Start Capital Costs in addition to a prior, FERC-approved cost recovery rate, the applicable commitment period shall be the longer of the FERC-approved recovery period or the initial capital recovery period based upon the age of the Black Start Unit plus the remaining life of the Black Start equipment.  For those Fuel Assured Black Start Units that elect to recover new or additional Fuel Assurance Capital Costs, the applicable capital recovery period shall be the fuel assurance capital recovery period based upon the age of the Fuel Assured Black Start Unit .

The Transmission Provider may terminate the commitment with one year advance notice of its intention to the Black Start Unit owner, but  the Black Start Unit owner shall be eligible to recover  any amount of unrecovered Fixed Black Start Service Costs including any amount of unrecovered Fuel Assurance Capital Costs over a period not to exceed five years.  A Black Start Unit owner may terminate the provision of Black Start Service with one year advance notice and consent of the Transmission Provider (or its commitment period may be involuntarily terminated pursuant to the section 15 below), provided the Black Start Unit's owner demonstrates to the satisfaction of the Transmission Provider at least one of the following reasons for such termination apply:

a. Black Start Unit retirement or deactivation with at least one year's notice;

b. Expiration of a state, federal, or other governmental agency permit(s) required for Black Start Service with at least one year's notice; or

c. Additional capital is required by the Black Start Unit owner to maintain Black Start Service capability (in which case, the Black Start Unit will apply for Black Start Service selection in accordance with the procedures set forth in Manual 12WEB and only continue to provide Black Start Service if selected for Black Start Service by the Transmission Provider).

Such Black Start Unit shall forego any otherwise existing entitlement to future revenues collected pursuant to this Schedule 6A and fully refund any amount of the Black Start Capital Costs and/or Fuel Assurance Capital Costs recovered under a FERC-approved rate (recovered on an accelerated basis pursuant to the provisions of section 17(i) of this Schedule 6A) in excess of the amount that would have been recovered pursuant to Schedule 6A, section 18 during the same period. 

6A. Black Start Units which are owned or contracted for by a Transmission Owner to provide Black Start Service as a result of the black start reliability backstop process defined in the PJM Manuals, shall be subject to cost recovery through such Transmission Owner's annual revenue requirement under such Transmission Owner's Tariff, Attachment H, as filed with, and accepted by, FERC under Section 205 of the Federal Power Act and in accordance with Tariff, Part I, section 9, or through such other cost recovery mechanism, provided that such cost recovery mechanism is filed with and accepted by FERC.  The relevant Transmission Owner shall commit to provide, or effectuate the provision of, Black Start Service from such a Black Start Unit for the FERC-approved cost recovery period.  The Transmission Provider may terminate the commitment with one year advance notice of its intention to the Transmission Owner.  Provision of Black Start Service from a Black Start Unit obtained through the black start reliability backstop process defined in the PJM Manuals shall be subject to sections 7 through 13 of this Schedule 6A.  The Revenue Requirements, Credits, and Charges provisions contained in sections 16 through 27 of this Schedule 6A, shall not apply to Black Start Units obtained as a result of the black start reliability backstop process defined in the PJM Manuals.

6B. In the event that a Black Start Unit fails to fulfill its commitment established under section 5 to provide Black Start Service, receipt of any Black Start Service revenues associated with the non-performing Black Start Unit shall cease and, for the period of the unit's non-performance, the Black Start Unit owner shall forfeit the Black Start Service revenues associated with the non-performing Black Start Unit that it received or would have received had the Black Start Unit performed, not to exceed revenues for a maximum of one year.

In the event that a Black Start Unit fails to fulfill its commitment established under section 6 above, such unit shall forego any otherwise existing entitlement to future revenues collected pursuant to this Schedule 6A and fully refund any amount of the Black Start Capital Costs recovered under a FERC-approved rate (recovered on an accelerated basis pursuant to the provisions of section 17(i) of this Schedule 6A)  in excess of the amount that would have been recovered pursuant to section 18 of this Schedule 6A during the same period, but such unit remains eligible to establish a new commitment under section 5 or 6 of this Schedule 6A.  Provided, however, Black Start Units that are selected to provide Black Start Service after June 6, 2021, pursuant to Schedule 6A, section 6 that subsequently transition from the Capital Cost Recovery Rate to the Base Formula Rate shall have a lifetime commitment and can only terminate for a reason specified in Schedule 6A, section 6(ii).

Performance Standards and Outage Restrictions

7. In addition to the performance capabilities set forth in the PJM Manuals, Black Start Units must have the capabilities listed below.  These capabilities must be demonstrated in accordance with the criteria set forth in the PJM manuals and will remain in effect for the duration of the commitment to provide Black Start Service.

a. A Black Start Unit must be able to close its output circuit breaker to a dead (de-energized) bus within the time specified in the PJM Manuals.

b. A Black Start Unit must be capable of maintaining frequency and voltage under varying load.

c. A Black Start Unit must be able to maintain rated output for a period of time identified by each Transmission Owner's system restoration requirements, in conjunction with the Transmission Provider.

d. A Fuel Assured Black Start Unit must meet the fuel assurance requirements as specified in the PJM Manuals.

8. Each owner of Black Start Units or Black Start Plants must maintain procedures for the start-up of the Black Start Units.

9. If a Black Start Unit is a generating unit with a high operating factor (subject to Transmission Provider concurrence) with the ability to automatically remain operating at reduced levels when disconnected from the grid, this ability must be demonstrated in accordance with the criteria set forth in the PJM manuals.

10. No more than one Black Start Unit at a Black Start Plant may be subject to a Generator Planned Outage or Generator Maintenance Outage at any one time without written approval of the Transmission Provider and the Transmission Owner in the Zone receiving Black Start Service from the Black Start Plant.  This restriction excludes outages on common plant equipment that may make all units unavailable.  A Black Start Unit not selected for providing Black Start Service in accordance with this Schedule 6A, section 4 and the PJM Manuals may be substituted for a Black Start Unit that is subject to a Generator Planned Outage to permit a concurrent planned outage of another critical Black Start Unit at the same Black Start Plant.  The Black Start Unit used as a substitute shall not receive compensation for additional capital expenditures to qualify for Black Start Service, will not increase the current Black Start Unit capital recovery commitment period, must be connected at the same voltage level and cranking path, must be similar age as the current Black Start Unit, must provide equivalent Black Start Unit Capacity, and must have had a valid annual test within the previous 13 months.  Black Start Unit substitutions may be permitted for reasons other than Generator Planned Outages if requested by the Black Start Unit owner and if approved by the Transmission Provider; provided, however, all requests for Black Start Unit substitutions must be supported by documentation and information demonstrating operational or technical reasons for the substitution satisfactory to the Transmission Provider and may only occur once within a 12-month period.

11. Concurrent planned outages at multiple Black Start Plants within a zone may be restricted based on Transmission Owner requirements for Black Start Service availability.  Such restrictions must be predefined and approved by Transmission Provider in accordance with the PJM manuals.

Testing

12. To verify that they can be started and operated without being connected to the Transmission System, Black Start Units shall be tested annually in accordance with the Tariff and the PJM Manuals.  Fuel Assured Black Start Units that are dual fuel must conduct an annual test on both fuels.  The Black Start Unit owner shall determine the time of the annual test.

13. Compensation under this Schedule 6A for energy output delivered to the Transmission System during the annual test shall be provided for the Black Start Unit's minimum run time at the higher of the unit's cost-capped offer or real-time Locational Marginal Price plus start-up and no-load costs for up to two start attempts, if necessary.  For Black Start Units that are generating units with a high operating factor (subject to Transmission Provider's concurrence) with  the ability to automatically remain operating at reduced levels when disconnected from the grid, an opportunity cost will be provided to compensate the unit for lost revenues during testing. 

14. All Black Start Units must have a successful annual test on record with the Transmission Provider within the preceding 13 months.  A Black Start Unit receiving revenues under Section 5 or Section 6 above that does not have a successful annual test on record with the Transmission Provider within the preceding 13 months will not qualify to receive Black Start Service revenues.  A Fuel Assured Black Start Unit that stores fuel on-site and fails in any month to store the fuel and non-fuel consumables needed to meet its fuel assurance run hour requirements except for allowable conditions specified in the PJM Manuals, and except when the Fuel Assured Black Start Unit can also operate independently on 2 or more interstate pipelines, does not qualify to receive Black Start revenues in that month.

15. If a Black Start Unit fails the annual test, the unit may be re-tested within a ten-day period without financial penalty.  If the Black Start Unit does not successfully re-test within that ten-day period, monthly Black Start Service revenues under this Schedule 6A will be forfeited by that unit from the time of the first unsuccessful test until such time as the unit passes an annual test.  If the Black Start Unit owner does not make the necessary repairs to enable the Black Start Unit to pass the annual test within 90 days of the due date for the annual test pursuant to section 14 above, the Black Start Unit will immediately cease to qualify as a Black Start Unit and, if applicable, will have failed to fulfill its commitment pursuant to section 5 or section 6 above, whichever is applicable, of this Schedule 6A and will be subject to the additional forfeiture of revenues set forth in section 6B of this Schedule 6A.  The 90 day period may be extended up to 1 year by the Transmission Provider in accordance with the PJM Manuals. If the 90 day period is extended, the Black Start Unit owner will continue to forfeit all revenues starting in the month of the first failed test until the Black Start Unit has demonstrated to the Transmission Provider that a successful test has been completed. 

Revenue Requirements

16. A Black Start Unit Owner's annual Black Start Service revenue requirement shall be the sum of the annual Black Start Service revenue requirements for each generator that is designated as providing Black Start Service and has provided the Transmission Provider with a calculation of its annual Black Start Service revenue requirements. A separate line item shall appear on the participants' Transmission Provider bill for Black Start Service charges and credits.

17.  Black Start Service revenue requirements for each Black Start Unit shall be based, at the election of the owner, on either (i) a FERC-approved rate for the recovery of the cost of providing such service for the entire duration of the commitment term set forth in either section 5 or 6 of this Schedule 6A, as applicable, or (ii) the formula rates set forth in section 18 of this Schedule 6A for the commitment term set forth in section 5 or 6 of this Schedule 6A as applicable.  Each generator's Black Start Service revenue requirements shall be an annual calculation. 

17A.  Annual Review for all Black Start Units

Requests for Black Start Service revenue requirements and for changes to the Black Start Service revenue requirements must be submitted to the Market Monitoring Unit for review and analysis, with supporting data and documentation, pursuant to Tariff, Attachment M–Appendix, section III and the PJM Manuals, with a copy to the Office of the Interconnection, by no later than May 3 of each year. The Market Monitoring Unit and the Black Start Unit owner shall attempt to come to agreement on the level of each component included in the Black Start Service revenue requirements by no later than May 14 of each year.  By no later than May 21 of each year, the Black Start Unit owner shall notify the Office of the Interconnection and the Market Monitoring Unit in writing whether it agrees or disagrees with the Market Monitoring Unit's determination of the level of each component included in the Black Start Service revenue requirements.  The Black Start Unit owner may also submit Black Start Service revenue requirements that it chooses to the Office of the Interconnection by no later than May 21 of each year, provided that (i) it has participated in good faith with the process described in this section and in Tariff, Attachment M-Appendix, section III (ii) the Black Start Service revenue requirements are no higher than the level defined in any agreement reached by the Black Start Unit owner and the Market Monitoring Unit that resulted from the foregoing process, and (iii) the Black Start Service revenue requirements are accepted by the Office of the Interconnection subject to the criteria set forth in the Tariff and PJM Manuals.

The Office of the Interconnection shall determine whether to accept the values submitted by the Black Start Unit owner subject to the requirements of the Tariff and the PJM Manuals by no later than May 27. If the Office of the Interconnection does not accept the values submitted by the Black Start Unit owner in such case, the Black Start Unit owner may file its proposed values with the Commission for approval.  Pursuant to Tariff, Attachment M-Appendix, section III, if the Office of the Interconnection accepts the Black Start Service revenue requirements submitted by the Black Start Unit owner in such case, the Market Monitoring Unit may petition the Commission for an order that would require the Black Start Unit owner to utilize the values determined by the Market Monitoring Unit or the Office of the Interconnection or such other values as determined by the Commission.  The annual calculation of Black Start Service revenue requirements shall become effective on June 1 of each year, except that no change to a Black Start Service revenue requirement shall become effective until the existing revenue requirement has been effective for at least twelve months.  Notwithstanding the foregoing, for the 2025/2026 Delivery Year the annual calculation of Black Start Service revenue requirements that became effective on June 1, 2025 will be further updated on September 1, 2025 to reflect any FERC approved changes in the Base Formula Rate equation regardless of whether the existing revenue requirement has been effective for at least 12 months; and for the 2026/2027 Delivery Year, the Black Start Service revenue requirement shall become effective June 1, 2026 regardless of whether the existing revenue requirement has been effective for at least 12 months.  Notwithstanding the foregoing, the deadlines set forth in this section 17 shall not apply to a Black Start Unit owner's election to select a new method of recovery for its Fixed BSSC.

17B.  Initial Review for New Black Start Units or existing Black Starts Units that require Fuel Assured Capital Cost

Requests for new Black Start Service revenue requirements and/or Fuel Assured Capital Costs must be submitted to the Market Monitoring Unit for review and analysis, with supporting data and documentation, pursuant to Tariff, Attachment M–Appendix, section III and the PJM Manuals, with a copy to the Office of the Interconnection, by no later than 90 days after entering Black Start Service or qualifying to be a Fuel Assured Black Start Unit. The Market Monitoring Unit and the Black Start Unit owner shall attempt to come to agreement on the level of each component included in the Black Start Service revenue requirements by no later than 90 days after the Black Start Unit owner's submittal of final black start capital costs (if applicable), variable black start costs, and fuel storage cost documentation. By no later than 90 days of the Black Start Unit owner's submittal of final black start cost documentation, the Market Monitoring Unit shall calculate the new Black Start Unit's annual revenue requirement and submit it to the Office of the Interconnection and the Black Start Unit owner. If more than three Black Start Unit owners submit documentation within a 90-day period, the Market Monitoring Unit shall complete the review of the first three submittals within 90 days and the next set of three within the following three months and so on until all are complete. The Black Start Unit owner shall notify the Office of the Interconnection and the Market Monitoring Unit in writing if it disagrees with the Market Monitoring Unit's determination of the level of any component included in the Black Start Service revenue requirements within 7 days after the Market Monitoring Unit's submittal of the annual revenue requirement to the Office of the Interconnection. The Black Start Unit owner shall also submit Black Start Service revenue requirements that it proposes to the Office of the Interconnection provided that (i) it has participated in good faith with the process described in this section and in Tariff, Attachment M-Appendix, section III; (ii) the Black Start Service revenue requirements are no higher than the level defined in any agreement reached by the Black Start Unit owner and the Market Monitoring Unit that resulted from the foregoing process; and (iii) the Black Start Service revenue requirements are accepted by the Office of the Interconnection subject to the criteria set forth in the Tariff and PJM Manuals.

The Office of the Interconnection shall determine whether to accept the values submitted by the Black Start Unit owner subject to the requirements of the Tariff and the PJM Manuals by no later than 30 days after its receipt of the Black Start Unit owner's written notice of a disagreement. If the Office of the Interconnection does not accept the values submitted by the Black Start Unit owner in such case, the Black Start Unit owner may file its proposed values with the Commission for approval. Pursuant to Tariff, Attachment M–Appendix, section III, if the Office of the Interconnection accepts the Black Start Service revenue requirements submitted by the Black Start Unit owner in such case, the Market Monitoring Unit may petition the Commission for an order that would require the Black Start Unit owner to utilize the values determined by the Market Monitoring Unit or the Office of the Interconnection or such other values as determined by the Commission. The annual calculation of Black Start Service revenue requirements shall become effective the day the unit enters Black Start Service or becomes fuel assured.

18. The formula for calculating a generator's annual Black Start Service revenue requirement is:

{{'{'}}(Fixed BSSC) + (Variable BSSC) + (Training

Costs) + (Fuel Storage Costs)} * (1 + Z)

For units that have the demonstrated ability to operate at reduced levels when automatically disconnected from the grid, the formula is revised to:

(Training Costs) * (1+ Z)

Where:

Fixed BSSC

Black Start Units with a commitment established under section 5 of this Schedule 6A shall calculate Fixed BSSC or "Fixed Black Start Service Costs" in accordance with the following Base Formula Rate:

 Base Formula Rate:

  Fixed Rate *  Black Start Unit Capacity * X

 Where: 

"Fixed Rate" is a fixed rate for providing Black Start Service (expressed in $/MW day).  This Fixed Rate will be adjusted annually based on the Handy Whitman index.  By March 31 of each year, PJM will post the adjusted Fixed Rate on the PJM website. Beginning with the 2025/2026 Delivery Year, the Fixed Rate shall be $272.62/MW day.

"Black Start Unit Capacity" is either: (i) the Black Start Unit's installed capacity, expressed in MW, for those Black Start Units which are not Fuel Assured Black Start Units that are Generation Capacity Resources; (ii) the awarded MWs in the Transmission Provider's request for proposal process under the PJM Manuals, for those Black Start Units, which are not Fuel Assured Black Start Units, that are Energy Resources; (iii) the Fuel Assured Black Start Unit's installed capacity for fuel assured non-intermittent Capacity Resources; or (iv) the monthly 90% confidence MW value calculated by the Transmission Provider for fuel assured intermittent or hybrid Capacity Resources.  The 90% confidence MW value is calculated using Black Start Unit historical data to determine the hourly MW value the resource can provide each day in each month for 16 hours, which need not be continuous.  The hourly MW value is then iterated until the confidence level of the unit providing the MW value on a monthly basis for 16 hours is 90%.

"X" is the Black Start Service allocation factor unless a higher or lower value is supported by the documentation of the actual costs of providing Black Start Service.  For such units qualifying as Black Start Units on the basis of demonstrated ability to operate at reduced levels when automatically disconnected from the grid, X shall be zero.  For non-fuel assured Black Start Units with a commitment established under Schedule 6A, X shall be .01 for Hydro units, .02 for CT units.  For fuel assured Black Start Units with a commitment established under Schedule 6A, X shall be .02 for all units.

Black Start Units with a commitment established under section 6 above shall calculate Fixed BSSC or "Fixed Black Start Service Costs" in accordance with one of the following formulas, as applicable:

Capital Cost Recovery Rate – NERC-CIP Specific Recovery

 (Fixed Rate * Black Start NERC-CIP Unit Capacity * X) + (Incremental Black Start NERC-CIP Capital Costs * CRF) + (Fuel Assurance Capital Costs * CRF)

Where:

"Fixed Rate" is a fixed rate for providing Black Start Service (expressed in $/MW day).  This Fixed Rate will be adjusted annually based on the Handy Whitman index.  By March 31 of each year, PJM will post the adjusted Fixed Rate on the PJM website.  Beginning with the 2025/2026 Delivery Year, the Fixed Rate shall be $272.62/MW day.

"Black Start NERC-CIP Unit Capacity" is the Black Start Unit's installed capacity, expressed in MW, but, for purposes of this calculation, capped at 100 MW for Hydro units, or 50 MW for CT units.

"Incremental Black Start NERC-CIP Capital Cost" are those capital costs documented by the owner or accepted by the Commission for the incremental equipment solely necessary to enable a Black Start Unit to maintain compliance with mandatory Critical Infrastructure Protection Reliability Standards (as approved by the Commission and administered by the applicable Electric Reliability Organization).

"Fuel Assurance Capital Costs" are the new or additional capital costs documented by the owner for the installation of equipment necessary for the unit to meet the fuel assurance criteria specified in the PJM manuals.

"CRF" or "Capital Recovery Factor" is equal to the levelized CRF as set forth in the applicable CRF table posted on the PJM website in accordance with Tariff, Schedule 6A, section 18 and Manual 15PDF.

A Black Start Unit may elect to terminate forward cost recovery under this Capital Cost Recovery Rate – NERC-CIP Specific Recovery at any time and seek cost recovery under the Capital Cost Recovery Rate, pursuant to the terms and conditions set forth below.

Capital Cost Recovery Rate

(FERC-approved rate) + (Incremental Black Start Capital Costs * CRF) + (Fuel Assurance Capital Costs * CRF)

 Where:

"FERC-approved rate" is the Black Start Unit's current FERC-approved recovery of costs to provide Black Start Service, if applicable.  To the extent that a Black Start Unit owner is currently recovering black start costs pursuant to a FERC-approved rate, that cost recovery will be included as a formulaic component for calculating the Black Start Unit's annual revenue requirement pursuant to this section 18.  However, under no circumstances will PJM or the Black Start Unit owner restructure or modify that existing FERC-approved rate without FERC approval.

"Incremental Black Start Capital Costs" are the new or additional capital costs documented by the owner or accepted by the Commission for the incremental equipment solely necessary to enable a unit to provide Black Start Service in addition to whatever other product or services such unit may provide.  Such costs shall include those incurred by a Black Start Unit owner in order to meet NERC Reliability Standards that apply to Black Start Units solely on the basis of the provision of Black Start Service by such unit.  However, Incremental Black Start Capital Costs shall not include any capital costs that the Black Start Unit owner is recovering for that unit pursuant to a FERC-approved recovery rate.

"Fuel Assurance Capital Costs" are the new or additional capital costs documented by the owner for the installation of equipment necessary for the unit to meet the fuel assurance criteria specified in the PJM manuals. However, Fuel Assurance Capital Costs shall not include any capital costs that the Fuel Assured Black Start Unit owner is recovering for that unit pursuant to a FERC-approved recovery rate.

The Capital Recovery Factor ("CRF") is equal to the Levelized CRF based on the age of the Black Start Unit, which is modified to provide Black Start Service.

The CRF applicable to Black Start Capital Costs of Black Start Units making capital investment prior to June 6, 2021 in order to provide or continue to provide Black Start Service, shall continue to be determined in accordance with the following table:

The CRF applicable to Black Start Capital Costs and/or for Fuel Assurance Capital Costs, of Black Start Units making capital investment after June 6, 2021 to provide or continue to provide Black Start Service, shall be updated annually on March 1 (if March 1 is not a Business day then the first Business Day after March 1) for (i) federal income tax rates as utilized by the U.S. Internal Revenue Service in effect at the time of the annual CRF update; (ii) average state tax rate; and (iii) debt interest rates and shall be posted on the PJM website by March 31 each year as shown in the table below.  Interested parties shall have until April 15 of each year to contest PJM's calculation of the annual CRF value before it becomes effective on June 1 of each year.

The CRF values shall be calculated for a recovery period based on the age of the Black Start Unit using the equation below:  

Where:

The following assumptions are used in the calculation:

The current federal tax and depreciation rates are as established by U.S. Internal Revenue Service;

The state tax rate is an average of the income tax rates for all the states in the PJM Region;

The capital investment necessary to make a unit qualify for Black Start Service is made up of 50 percent equity;

The capital investment necessary to make a unit qualify for Black Start Service is made up of 50 percent debt;

The debt interest rate is based on the most recent Net CONE quadrennial review after-tax weighted average cost of capital (ATWACC) and shall be updated as follows:

The debt interest rate will be updated during the Net CONE quadrennial review; and

If the 2-year change in the Moody Utility Index for bonds rated Baa1 is more than 200 basis points, this change will be added to the interest rate used in the most recent Net CONE quadrennial review and will be used as the current year's debt interest rate.

The debt term is equal to the applicable recovery period specified in the Age of Unit/Applicable Recovery Period table below; and

The cost of equity shall be equal to an after tax internal rate of return on equity of 12%.

Any changes to the debt and equity percentages and after tax internal rate of return on equity components stated above shall be included in revisions to this section 18.

 In those circumstances where a Black Start Unit owner has elected to recover Incremental Black Start Capital Costs and/or Fuel assurance Capital Costs, in addition to a FERC-approved recovery rate, its applicable term of commitment shall be the greater of:  (i) the FERC-approved recovery period, or; (ii) the applicable term of commitment as set forth in the Age of Unit/Applicable Recovery Period table above.

 After a Black Start Unit has recovered its allowable Incremental Black Start Capital Costs, Incremental Black Start NERC-CIP Capital Costs, and/or Fuel assurance Capital Costs as provided by the applicable Capital Cost Recovery Rate, and has satisfied its applicable commitment period required under section 6 of this Schedule 6A, the Black Start Unit shall be committed to providing black start in accordance with section 5 of this Schedule 6A and calculate its Fixed BSSC in accordance with the Base Formula Rate.

Variable BSSC

All Black Start Units shall calculate Variable BSSC or "Variable Black Start Service Costs" in accordance with the following formula:

  Black Start Unit O&M * Y

Where:

"Black Start Unit O&M" are the operations and maintenance costs attributable to supporting Black Start Service and must equal the annual variable O&M outlined in the PJM Cost Development Guidelines set forth in the PJM Manuals. Such costs shall include those incurred by a Black Start Owner in order to meet NERC Reliability Standards that apply to the Black Start Unit solely on the basis of the provision of Black Start Service by unit.

"Y" is 0.01, unless a higher or lower value is supported by the documentation of costs.  If a value of Y is submitted for this cost, a (1-Y) factor must be applied to the Black Start Unit's O&M costs on the unit's cost-based energy schedule, calculated based on the Cost Development Guidelines in the PJM Manuals.

For units qualifying as Black Start Units on the basis of a demonstrated ability to operate at reduced levels when automatically disconnected from the grid, there are no variable costs associated with providing Black Start Service and the value for Variable BSSC shall be zero.

Black Start Units with the demonstrated ability to automatically remain operating, at reduced levels, when disconnected from the grid may receive NERC compliance costs associated with providing Black Start Service in addition to the formula above, if approved in accordance with the procedures in section 17 of this Schedule 6A.

Training Costs:
 

All Black Start Units shall calculate Training Costs in accordance with the following formula:
 

50 staff hours/year/plant*75/hour

Fuel Storage Costs:

Black Start Units that store liquefied or compressed natural gas, propane, or oil on site shall calculate Fuel Storage Costs in accordance with the following formula:

{{'{'}}MTSL + [(# Run Hours) * (Fuel Burn Rate)]} *

(12 Month Forward Strip + Basis) * (Bond Rate)

Where:

Run Hours are the actual number of hours a Transmission Provider requires a Black Start Unit to run.  Run Hours shall be at least 16 hours or as defined by the Transmission Owner restoration plan, whichever is less.

"Fuel Burn Rate" is actual fuel burn rate for the Black Start Unit.

"12-Month Forward Strip" is the average of forward prices for the fuel burned in the Black Start Unit traded the first Business Day on or following April 1.

"Basis" is the transportation costs from the location referenced in the forward price data to the Black Start Unit plus any variable taxes.

"Bond rate" is the value determined with reference to the Moody's Utility Index for bonds rated Baa1 reported the first Business Day on or following April 1.

"MTSL" is the "minimum tank suction level" and shall apply to oil fired Black Start Units' storage tanks that have an unusable volume of oil.  In the case where a Black Start Unit shares a common fuel tank, the Black Start Unit will be eligible for recovery of the Black Start Energy Tank Ratio of the MTSL in its fuel storage calculation.

Black Start Energy Tank Ratio = {{'{'}}(Fuel Burn Rate * Minimum Run Hours) / (Tank Capacity – MTSL)}

The MTSL fuel storage calculation shall be as follows:

{{'{'}}(Black Start Energy Tank Ratio * MTSL) + [(#Run Hours) * (Fuel Burn Rate)]} * (12 Month Forward Strip + Basis) * (Bond Rate) 

For units qualifying as Black Start Units on the basis of a demonstrated ability to operate at reduced levels when automatically disconnected from the grid, there are no associated fuel storage costs and the value for FSC shall be zero.

Z

Z shall be an incentive factor solely for Black Start Units with a commitment established under section 5 above and shall be ten percent for non-fuel assured Black Start Units and twenty percent for Fuel Assured Black Start Units.  For those Black Start Units that elect to recover new or additional Black Start or Fuel Assurance Capital Costs under section 6 above, the incentive factor, Z, shall be equal to zero.

Every five years, PJM shall review the formula and its costs components set forth in this section 18, and report on the results of that review to stakeholders.

19. Transmission Provider or its agent shall have the right to independently audit the accounts and records of each Black Start Unit that is receiving payments for providing Black Start Service.

20. PJM shall notify its Members when a Black Start Unit seeks to recover new or additional Black Start NERC-CIP Capital Costs under section 18 of this Schedule 6A no later than thirty (30) days prior to the effective date of the recovery.  At the written request of a PJM Member, made simultaneously to the Market Monitoring Unit and PJM, with notice to the Black Start Unit owner, the Market Monitoring Unit shall make available to the affected PJM Member for inspection at the offices of the Market Monitoring Unit, all data supporting the requested new or additional NERC-CIP specific Capital Costs.  The Black Start Unit owner may elect to attend this review.  In all cases, the supporting data is to be held confidential and may not be distributed.

21. The Market Monitoring Unit shall include a Black Start Service summary in its annual State of the Market report which will set forth a descriptive summary of the new or additional Black Start NERC-CIP Capital Costs requested by Black Start Units, and include a list of the types of capital costs requested and the overall cost of such capital improvements on an aggregate basis such that no data is attributable to an individual Black Start Unit.

Credits

22. For existing Black Start Units, monthly credits are provided to Black Start Unit owners that submit to the Transmission Provider their annual revenue requirements established pursuant to section 17A of this Schedule 6A.  The generator's monthly credit is equal to 1/12 of its annual Black Start Service revenue requirement for eligible critical Black Start Units.  For new Black Start Unit owners, monthly credits will be held by the Office of the Interconnection in a non-interest bearing account until the Office of the Interconnection, or the Commission as applicable, accepts the owner's annual revenue requirement pursuant to section 17B of this Schedule 6A. New Black Start Unit owners will begin to receive monthly credits, including any monthly credits held by the Office of the Interconnection back to the date the unit enters Black Start Service and any required estimated annual revenue requirement true up after the Office of the Interconnection, or the Commission as applicable, accepts the new Black Start Unit owner's annual revenue requirement.

22A.  For Fuel Assured Black Start Units that are recovering Fuel Assurance Capital Costs, pursuant to section 17B of this Schedule 6A, shall have its monthly credits reduced, but not less than zero, by the positive net value of the Day-ahead Energy Market and Real-time Energy Market revenues from being committed using the fuel assurance fuel as further described in the PJM manuals minus the cost of running on that fuel.  The Black Start Unit's monthly credits shall not be increased.  For Fuel Assured Black Start Units that are recovering Fuel Assurance Capital Cost and the Fuel Assurance Capital Costs increased the Installed Capacity Rating (ICAP) of the unit, monthly credits shall be reduced, but not less than zero, by the monthly capacity revenues for the increased ICAP.  Monthly credits will only be reduced during the Fuel Assurance Capital Cost recovery period.

23. Revenue requirements for jointly owned Black Start Units will be allocated to the owners based on ownership percentage.

24. Transmission Provider shall not compensate generators for Black Start Service unless they meet the Transmission Provider criteria for Black Start Service and the criteria for Black Start Service in the Applicable Standards and provide Transmission Provider with all necessary data in accordance with this Schedule 6A and the PJM manuals.

Charges

25. Zonal rates will be based on Black Start Service capability or share of generation units designated by the Transmission Provider and allocated to network service customers and point-to-point reservations.  Zonal rates will include estimated annual revenue requirements for new

Black Start Units from the date the units enter Black Start Service to last day of the month

preceding the Office of the Interconnection's acceptance of the unit's annual revenue

requirement. The estimated annual revenue requirement will be based on the Black Start Unit

owner's best estimate at the time the unit enters Black Start Service. Any estimated annual

revenue requirement true up will be included in the monthly bill after the Office of the

Interconnection accepts the new Black Start unit's annual revenue requirement.

26. Revenue requirements for Black Start Units designated by the Transmission Provider as critical (regardless of zonal location) will be allocated to the receiving Transmission Owner's zone.  Black Start Units that are shared and designated to serve multiple zones will have their annual revenues allocated by Transmission Owner designated critical load percentage.

27. Purchasers of Black Start Service shall be charged for such service in accordance with the following formulae.

Monthly Charge for a purchaser receiving Network Integration Transmission Service or Point-to-Point Transmission Service to serve Non-Zone Load = Allocation Factor * Total Generation Owner Monthly Black Start Service Revenue Requirement

Monthly Charge for a purchaser receiving Network Integration Transmission Service or Point-to-Point Transmission Service to serve Zone Load = Allocation Factor * Zonal Generation Owner Monthly Black Start Service Revenue Requirement * Adjustment Factor

Where:

Purchaser serving Non-Zone Load is a Network Customer serving Non-Zone Network Load or a Transmission Customer where the Point of Delivery is at the boundary of the PJM Region.

Zonal Generation Owner Monthly Black Start Service Revenue Requirement is the sum of the monthly share of Black Start Service revenue requirements for each generator nominated by the Transmission Owners in that zone.

Total Generation Owner Monthly Black Start Service Revenue Requirement is the sum of the Zonal Generation Owner Monthly Black Start Service Revenue Requirements for all Zones in the PJM Region.

Allocation Factor is the monthly transmission use of each Network Customer or Transmission Customer per Zone or Non-Zone, as applicable, on a megawatt basis divided by the total transmission use in the Zone or in the PJM Region, as applicable, on a megawatt basis.

For Network Customers, monthly transmission use on a megawatt basis is the sum of a Network Customer's daily values of DCPZ or DCPNZ (as those terms are defined in Tariff, Part I, section 34.1) as applicable, for all days of the month. 

For Transmission Customers, monthly transmission use on a megawatt basis is the sum of the Transmission Customer's hourly amounts of Reserved Capacity for each day of the month (not curtailed by PJM) divided by the number of hours in the day.

Adjustment Factor is determined as the sum of the total monthly transmission use in the PJM Region on a megawatt basis, exclusive of such use by Network Customers and Transmission Customers serving Non-Zone Load, divided by the total monthly transmission use in the PJM Region on a megawatt basis.

In the event that a single customer is serving load in more than one Zone, or serving Non-Zone Load as well as load in one or more Zones, or is both a Network Customer and a Transmission Customer, the Monthly Charge for such a customer shall be the sum of the Monthly Charges determined by applying the appropriate formulae set forth in this Schedule 6A.