Abstract: Though the economic demand response (EDR) in PJM (Pennsylvania-New Jersey-Maryland) electric market has implemented successfully, there are still some problems. According to the problems in recent years disclosed by ESPA Decision such as unbalanced interests, this paper propose a new EDR with the co-existence model of load shifting and load curtailment instead of the original EDR with only load curtailment mode, so that generators can also join the EDR in PJM electric market. Meanwhile, this paper considers the error uncertainty of customer baseline load (CBL) to accurately calculate the true response error of EDR when constructing the EDR model. The results of the case study show that taking CBL error into consideration can estimate the real cost of EDR error and the load shifting mode can coordinate the interests of generators, load service entities (LSE) and curtailment service providers (CSP) to a certain extent.

Key words: economic demand response, customer baseline load, PJM, balance operating reserve fee, uncertainty