PJM Interconnection

PJM Interconnection LLC (PJM) is a regional transmission organization (RTO) in the United States. It is part of the Eastern Interconnection grid operating an electric transmission system serving all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia.

Regional transmission organizations of North America. The PJM Interconnection is in dark blue.
PJM coal and natural gas electricity generation, 2013–2017
During 2013–2017 the PJM Interconnection increased the use of natural gas combined cycle plants while reducing the use of coal-fired plants

PJM, headquartered in Valley Forge, Pennsylvania, was the world's largest competitive wholesale electricity market until the development of the European Integrated Energy Market in the 2000s.[1] More than 1,000 companies are members of PJM, which serves 65 million customers and has 180 gigawatts of generating capacity. With 1,376 generation sources, 84,236 miles (135,560 km) of transmission lines and 6,038 transmission substations, PJM delivered 807 terawatt-hours of electricity in 2018.[2]

Started in 1927, the pool was renamed the Pennsylvania-New Jersey-Maryland Interconnection (PJM) in 1956. The organization continues to integrate additional utility transmission systems into its operations.

The Federal Energy Regulatory Commission (FERC) regulates PJM[3] and approves its open access transmission tariff for the wholesale electricity market.

History

In 1927 the Public Service Electric and Gas Company, Philadelphia Electric Company, and Pennsylvania Power & Light Company formed a power pool called the Pennsylvania-New Jersey Interconnection.[4] The purpose of the power pool was to dispatch electric generating plants on a lowest cost basis, thereby reducing the electric costs for all members of the pool. [5]

After Baltimore Gas and Electric Company and General Public Utilities joined in 1956, the pool was renamed the Pennsylvania-New Jersey-Maryland Interconnection, or PJM.[6]

FERC Orders 888, 889 and 2000

In 1996 - 1999 the FERC made a series of decisions which resulted in the restructuring of the U.S. electric utility industry. The FERC's intention in doing so was to open the wholesale power market to new players, with the hope that spurring competition would save consumers $4 to $5 billion per year and encourage technical innovation in the industry. [7]

Order No. 888 (Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities) directed utility owners of interstate transmission lines to provide FERC with proposed terms (including fee schedules, or "tariffs") under which new market participants would be granted open, non-discriminatory access to move (or "wheel") power through the existing transmission grid. The FERC also ordered electric utilities to functionally separate transmission operations from their power plant and power marketing businesses. This unbundling of functions was aimed at eliminating conflicts of interest that might exist when the same company owned both the transmission system and the generating plants. [8]

Order No. 889 (Open Access Same-Time Information System) was designed to further level the playing field. It required the creation of an electronic system to ensure that all participants in the wholesale power market - new players and traditional electric utilities - had access to the same information about available transmission capacity and prices.[9]

The FERC also endorsed the concept of appointing independent system operators (ISOs) to coordinate, control, and monitor the operation of electrical power systems, usually within a single US state - a function that was traditionally the responsibility of vertically integrated electric utility companies.[10] PJM became an ISO in 1997. The concept of an independent system operator evolved into that of regional transmission organizations (RTOs). FERC's intention was that all U.S. companies owning interstate electric transmission lines would place those facilities under the control of an RTO.[11] In its Order No. 2000 (Regional Transmission Organizations), issued in 1999, FERC specified the minimum capabilities that an RTO should possess in order for the competitive generation market to function as intended.[12] PJM was designated an RTO by the FERC in 2001.

Deregulation and expansion, 2002

In April 2002, Allegheny Power (AP) was the first external control area to join the PJM RTO as a market participant; "PJM Classic" and AP operated as a single control area, filling the roles of balancing authority, interchange authority, market operator and transmission operator.

The Northeast Blackout of 2003

During the Northeast Blackout of 2003, the transmission systems within the PJM operations area largely remained operational and were not affected by the power failure.[6] When the grid separated, a small portion of the Public Service Electric & Gas of New Jersey zone electrically separated from the Eastern Interconnection due to over-frequency relay operations.

Deregulation and expansion, 2004-present

In May 2004, Commonwealth Edison (ComEd) joined PJM as a separate balancing authority operating under the RTO. PJM was able to manage the two territories in a single market by a mechanism known as "the pathway", a set of firm contracts that transferred energy from ComEd through third party control areas to the eastern PJM markets and beyond. In October 2004, American Electric Power (AEP) and Dayton Power & Light (DPL) joined PJM, which allowed PJM to collapse back into a single control area.

In January 2005, Duquesne Light Co. (DLCO) joined PJM. In May 2005, Dominion Virginia Power joined PJM, extending the southern border to North Carolina. FirstEnergy was added to PJM in June 2011, expanding the footprint across northern Ohio to the Michigan border. Areas of Ohio and Kentucky near Cincinnati covered by Duke Energy joined the PJM footprint in January 2012. In 2018, the Ohio Valley Electric Corporation (OVEC) integrated into PJM.[13] At this time, PJM now borders 22 balancing authorities representing eleven market interfaces.

Transmission system planning and upgrades

PJM uses a fifteen-year planning horizon for planning transmission system upgrades. Under PJM's Regional Transmission Expansion Planning (RTEP) process, PJM considers forecasts of load growth and additions of demand response, interconnection requests for new and planned retirements of existing generating plants, and possible solutions to mitigate congestion on the transmission system.[14] If the upgrade involves the construction of a new transmission line, local siting decisions involving the route of the new line are determined by the owner of the line and the state government.

Renewable backlog

As of 2022 due to the volume of applications from renewable energy projects PJM has experienced difficulty in evaluating and integrating proposed new projects into its system. This may result in delays in utilization of significant projects that are being built or are planned, delaying the achievement of President Biden's goal of 100 percent carbon-free electricity by 2035.[15][16]

Pricing

PJM uses nodal pricing, also known as locational marginal pricing,[17] and publishes a map of price levels throughout its area.[18]

References
  1. "PJM Annual Financial Report" (pdf).
  2. "2018 PJM Annual Report".
  3. "Illinois governor wants clean energy legislation, could push state out of PJM power grid". Reuters. January 30, 2020. Retrieved 9 June 2021.
  4. "PJM's Heritage".
  5. International Directory of Company Histories, Vol. 48. St. James Press. 2003. Retrieved 20 September 2015.
  6. "PJM Timeline" (PDF). 2007-12-03. Archived from the original (PDF) on November 21, 2008. Retrieved 2008-08-17.
  7. Tomain, Joseph and Cudahy, Richard (2004). Energy Law in a Nutshell. Thomson-West Group. p. 277. ISBN 9780314150585.{{cite book}}: CS1 maint: multiple names: authors list (link)
  8. Tomain and Cudahy op cit. pp. 276–277.
  9. Tomain and Cudahy op cit. p. 277.
  10. Tomain, Joseph and Cudahy, Richard (2004). Energy Law in a Nutshell. Thomson - West Group. ISBN 9780314150585.{{cite book}}: CS1 maint: multiple names: authors list (link)
  11. "Order No. 2000" (PDF). Federal Energy Regulatory Commission. Retrieved 7 June 2021.
  12. "U.S. Energy Law: Electricity (About Regional Transmission Organizations)". George Washington University Law Library.
  13. Anderson, Jared (December 3, 2018). "PJM completes Ohio Valley Electric Corp. integration". S&P Global Platts. Retrieved December 6, 2018.
  14. "PJM Regional Transmission Expansion Plan". PJM. 2008-02-27.
  15. James Bruggers (February 2, 2022). "Overwhelmed by Solar Projects, the Nation's Largest Grid Operator Seeks a Two-Year Pause on Approvals". Inside Climate News. Retrieved February 5, 2022.
  16. "FACT SHEET: President Biden Sets 2030 Greenhouse Gas Pollution Reduction Target Aimed at Creating Good-Paying Union Jobs and Securing U.S. Leadership on Clean Energy Technologies". whitehouse.gov. White House. April 22, 2021. Retrieved February 5, 2022. America’s 2030 target picks up the pace of emissions reductions in the United States, compared to historical levels, while supporting President Biden’s existing goals to create a carbon pollution-free power sector by 2035 and net zero emissions economy by no later than 2050
  17. Neuhoff; Boyd (July 2011). "International Experiences of Nodal Pricing Implementation" (PDF). Climate Policy Initiative.
  18. "PJM - Locational Marginal Pricing Map". www.pjm.com. Retrieved 2022-02-26.


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