PJM

PJM
Name	PJM
Type	Regional transmission organization
Founded	1927 (as PJM Interconnection in 1956)
Headquarters	Audubon, Pennsylvania
Area served	Mid-Atlantic and Midwest United States
Key people	Charles E. Miller (President and CEO)
Members	utilities, generators, load-serving entities, market participants

PJM

PJM is an American regional transmission organization covering a large portion of the Mid-Atlantic and Midwest. It coordinates wholesale electricity transmission and competitive energy markets across parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and the District of Columbia. PJM administers capacity markets, energy markets, and ancillary services, and operates a high-voltage transmission grid that interconnects with neighboring entities like MISO, NYISO, and ISO New England.

Overview

PJM evolved into a large independent system operator and regional transmission organization interacting with entities such as the Federal Energy Regulatory Commission, North American Electric Reliability Corporation, U.S. Department of Energy, Environmental Protection Agency, and various state public utility commissions including the New Jersey Board of Public Utilities and the Maryland Public Service Commission. Market participants include investor-owned utilities like Exelon, Duke Energy, and American Electric Power, independent power producers like NextEra Energy, and trading firms operating in markets organized by PJM. Operational coordination interfaces with transmission owners such as Pepco, PPL Corporation, and FirstEnergy.

History

PJM’s antecedents trace to power pooling arrangements among Philadelphia-area utilities in the early 20th century and the formal PJM Interconnection formed in 1956 to coordinate generation among companies including Philadelphia Electric Company and Jersey Central Power and Light. Deregulation and restructuring in the 1990s—driven by legislation and orders from the Federal Energy Regulatory Commission such as Order Nos. 888 and 2000—expanded transmission open access and created independent system operators, leading to PJM’s market redesigns. PJM’s footprint grew through mergers and expansion agreements with neighboring control areas and interconnections involving Allegheny Power and Commonwealth Edison, and later integration with parts of Michigan and Tennessee Valley Authority interties. Major events shaping PJM operations include the Northeast blackout of 2003, subsequent reliability reforms by the North American Electric Reliability Corporation, and policy-driven shifts following the Clean Power Plan and regional renewable deployment incentives influenced by states like New Jersey and Maryland.

Organization and Governance

PJM is governed through a stakeholder process that includes the PJM Board of Managers, committees such as the Markets and Reliability Committee and the Members Committee, and a staff led by an executive team. Stakeholders comprise diverse entities: transmission owners (e.g., Baltimore Gas and Electric), generators (e.g., Calpine), load-serving companies, and consumer advocates like Public Citizen. Regulatory oversight comes from the Federal Energy Regulatory Commission, while reliability standards are enforced via the North American Electric Reliability Corporation and the regional entity ReliabilityFirst. Governance reforms have involved litigation and settlements with entities including state attorneys general and utility commissions like the Pennsylvania Public Utility Commission.

Operations and Market Structure

PJM operates locational marginal pricing markets for energy, a forward capacity market (the Reliability Pricing Model), and ancillary services markets including regulation and reserves. Market participants submit bids and offers; market clearing prices are determined centrally with software tools developed in coordination with vendors and research institutions such as General Electric and Princeton University collaborators. PJM conducts capacity auctions known as the Base Residual Auction and conducts day-ahead and real-time markets interoperable with bilateral contracts used by utilities such as Consolidated Edison and Public Service Enterprise Group. Market design debates have involved organizations like the Brattle Group, research by the Massachusetts Institute of Technology, and filings before the Federal Energy Regulatory Commission.

Transmission System and Reliability

PJM plans and operates a high-voltage transmission network with planning cycles addressing system upgrades, transmission expansion, and interconnection studies. It uses Regional Transmission Expansion Planning processes that coordinate with neighboring transmission providers including MISO and ATC (American Transmission Company). Reliability metrics and emergency operations reference standards from the North American Electric Reliability Corporation, and PJM’s coordination during extreme weather has intersected with entities like National Weather Service and U.S. Department of Energy emergency protocols. Notable reliability projects have tied into interstate infrastructure such as the Susquehanna River crossings and major substations serving metropolitan centers like Philadelphia and Pittsburgh.

Environmental and Policy Initiatives

PJM’s markets and planning interact with state-level policies including renewable portfolio standards in New Jersey, Maryland, and Pennsylvania, regional greenhouse gas considerations influenced by the Regional Greenhouse Gas Initiative participants, and federal initiatives from the Environmental Protection Agency. Interconnection queues and resource adequacy discussions reflect growth in wind and solar from developers including Iberdrola Renewables and EDF Renewables and battery projects from manufacturers like Tesla, Inc. and LG Chem. PJM participates in studies on emissions impacts and grid integration led by research partners such as National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory.

Criticism and Controversies

PJM has been subject to criticism over capacity market design, payments to certain resources, and handling of state clean energy policies, drawing challenges from states, utilities, and advocacy groups including New Jersey Board of Public Utilities, Ohio Public Utilities Commission, and environmental organizations. Legal and regulatory disputes have been adjudicated before the Federal Energy Regulatory Commission and in federal courts, involving stakeholders like Exelon and Brattle Group consultants. Controversies have also included debates over transmission cost allocation tied to projects proposed by transmission owners such as PPL Corporation and claims about market concentration raised by entities like the Antitrust Division conversations and consumer advocates.

Category:Regional transmission organizations in the United States