8.CAPACITY RESOURCE DEFICIENCY CHARGE

8.1

A Capacity Resource Deficiency Charge shall be assessed on any Capacity Market Seller that commits a Capacity Resource, and on any Locational UCAP Seller that sells Locational UCAP for a Delivery Year based on a Generation Capacity Resource, for a Delivery Year that is unable or unavailable to deliver Unforced Capacity for all or any part of such Delivery Year for any reason, including but not limited to the following, and that does not obtain replacement Unforced Capacity meeting the same locational requirements and same or better temporal availability characteristics (i.e., Annual Resource, Extended Summer Demand Resource, or Limited Demand Resource) in the megawatt quantity required to satisfy the capacity committed from such resource by such seller as a result of all cleared Sell Offers from such seller based on such resource in any RPM Auctions for such Delivery Year, the reduction in any such commitment for such resource to the extent and for the time period of any replacement capacity committed in lieu of such resource, and the increase in any such commitment for such resource to the extent and for the time period that such resource is committed as replacement capacity for any other resource:

a)Unit Derating – Such Capacity Resource is a Generation Capacity Resource and its capacity value is derated prior to or during the Delivery Year; 

b)EFORD Increase – Such Capacity Resource is a Generation Capacity Resource and the EFORD value determined for such resource at least two (2) months prior to the Third Incremental Auction is higher than the EFORD value submitted in the Capacity Market Seller's cleared Sell Offer;

c)External Generation Resource – Such Capacity Resource is an Existing Generation Capacity Resource that is located outside of the PJM Control Area and arrangements for the firm delivery of the output of such resource to the interface with the PJM Region are not in place for such resource prior to the start of the Delivery Year;

d)Planned Generation Resource – Such Capacity Resource is a Planned Generation Capacity Resource and Interconnection Service has not commenced as to such resource prior to the start of the Delivery Year;

e)Planned Demand Resource -Such Capacity Resource is a Planned Demand Resource or an Energy Efficiency Resource and the associated demand response program or energy efficiency measure is not installed prior to the start of the Delivery Year; or

f)Existing Demand Resource – Such Capacity Resource is an existing Demand Resource or Energy Efficiency Resource and, subject to section 8.4 below, is not capable of providing the megawatt quantity of load response specified in the cleared Sell Offer for the time periods of availability associated with the product type.

8.2.Capacity Resource Deficiency Charge

The Capacity Resource Deficiency Charge shall equal the Daily Deficiency Rate (as defined in Tariff, Attachment DD, section 7) multiplied by the megawatt quantity of deficiency below the level of capacity committed in such Capacity Market Seller's Sell Offer(s) or bilateral capacity commitments, or Locational UCAP Seller's Locational UCAP sale for each day such seller is deficient, provided, however, that a resource that is subject to a charge under this section that is also subject to a charge under Tariff, Attachment DD, section 10A hereof for a Performance Shortfall during one or more Performance Assessment Intervals occurring during the period of resource deficiency addressed by this section shall be assessed a charge equal to the greater of the charge determined under this section and the charge determined under Tariff, Attachment DD, section 10A, but shall not be assessed a charge under both this section and Tariff, Attachment DD, section 10A for such simultaneous occurrence of a resource deficiency and Performance Shortfall.

8.3.Allocation of Revenue Collected from Capacity Resource Deficiency Charges

The revenue collected from the assessment of a Capacity Resource Deficiency Charge shall be distributed on a pro-rata basis to all LSEs that were charged a Locational Reliability Charge for the day for which such Capacity Resource Deficiency Charge was assessed.  Such revenues shall be distributed on a pro-rata basis to such LSEs based on their Daily Unforced Capacity Obligations.

8.4Relief from Charges

A Capacity Market Seller or Locational UCAP Seller that is otherwise subject to the Capacity Resource Deficiency Charge solely as a result of section 8.1(f) above may receive relief from such Charge if it demonstrates that the inability to provide the level of demand response specified in its Sell Offer is due to the permanent departure (due to plant closure, efficiency gains, or similar reasons) from the Transmission System of load that was relied upon for load response in such Sell Offer; provided, however, that such seller must provide the Office of the Interconnection with all information deemed necessary by the Office of the Interconnection to assess the merits of the request for relief. Such seller shall receive no RPM Auction Credit for the amount of reduction in the committed Existing Demand Resources.