PJM Interconnection

PJM Interconnection
Name	PJM Interconnection
Type	Regional Transmission Organization
Founded	1927 (as Pennsylvania-New Jersey Interconnection)
Headquarters	Valley Forge, Pennsylvania
Area served	Mid-Atlantic and Midwest United States

PJM Interconnection

PJM Interconnection is a regional transmission organization that coordinates wholesale electricity markets, transmission planning, and reliability across parts of the Mid-Atlantic and Midwestern United States. It operates a large wholesale electricity market that serves utilities, independent power producers, and load-serving entities, and it works with federal and state regulators, system operators, and market participants to manage grid operations. PJM's territory overlaps with states, independent system operators, utility companies, and federal entities involved in energy policy and infrastructure.

History

PJM originated as the Pennsylvania-New Jersey Interconnection in the late 1920s, evolving through interactions with utilities such as General Electric, Westinghouse Electric Company, American Electric Power, Exelon, and Duquesne Light Company. During the mid-20th century, coordination with regional utilities and authorities like the New York Power Authority, Metropolitan Edison Company, Delmarva Power, and transmission developments associated with projects overseen by the Federal Power Commission set the stage for broader pooling arrangements. The restructuring of the U.S. electricity sector in the 1990s, influenced by legislation such as the Energy Policy Act of 1992 and orders from the Federal Energy Regulatory Commission, led to the formation of organized markets and the transformation of PJM into a regional transmission organization. Expansion phases incorporated areas served by entities including Dominion Energy, Allegheny Power, Duke Energy, FirstEnergy, Public Service Electric and Gas, and American Transmission Systems, Incorporated.

Organization and Governance

PJM's governance features a board of managers and stakeholder committees that include representatives from generation owners, transmission owners, electric distributors, and market participants like NextEra Energy, NRG Energy, Constellation Energy, Shell Energy, and AES Corporation. Oversight involves coordination with the Federal Energy Regulatory Commission and state utility commissions such as the Pennsylvania Public Utility Commission, New Jersey Board of Public Utilities, Maryland Public Service Commission, and Virginia State Corporation Commission. Stakeholder processes bring together trade associations and organizations like the Electric Power Supply Association, American Public Power Association, North American Electric Reliability Corporation, and regional reliability councils including ReliabilityFirst Corporation. Institutional relationships extend to research organizations and universities such as Electric Power Research Institute, Johns Hopkins University, Pennsylvania State University, and Carnegie Mellon University.

Market Operations

PJM operates energy, capacity, and ancillary services markets that engage generation owners and traders including Calpine Corporation, Dynegy, Iberdrola, Engie, and Macquarie Group. Market rules were shaped in response to rulings by the Federal Energy Regulatory Commission and litigation involving entities like Reliant Energy and coordinated with power exchanges such as the New York Independent System Operator and Midcontinent Independent System Operator. Market optimization and dispatch rely on forecasting and control systems developed with vendors like Siemens, ABB, Schneider Electric, and GE Vernova. Financial settlements and credit arrangements involve banks and financial institutions such as JPMorgan Chase, Bank of America, and commodity traders like Vitol and Trafigura.

Transmission System and Planning

PJM coordinates an extensive high-voltage transmission network involving transmission owners like American Transmission Company, ITC Holdings, PPL Corporation, Tennessee Valley Authority interties, and municipal systems such as Baltimore Gas and Electric and Columbus Southern Power. Regional planning processes interact with federal entities including the Department of Energy and initiatives like the National Transmission Grid Study. Long-term planning incorporates generation interconnection procedures used by developers including Ørsted, Invenergy, NextEra Energy Resources, and Pattern Energy to connect wind, solar, and storage resources produced by companies such as Tesla, LG Chem, and Siemens Gamesa. PJM’s transmission expansion plans relate to interstate projects like the Potomac-Appalachian Transmission Highline proposals and regional initiatives involving states including Pennsylvania, New Jersey, Delaware, Maryland, Virginia, Ohio, Michigan, and Illinois.

Reliability and Regulatory Oversight

PJM's reliability mission is coordinated with the North American Electric Reliability Corporation, regional entities such as Midwest Reliability Organization, and federal regulators including the Federal Energy Regulatory Commission and interactions with the North American Electric Grid framework. Compliance and critical infrastructure protection involve standards from NERC and cybersecurity cooperation with agencies like the Department of Homeland Security and Cybersecurity and Infrastructure Security Agency. Emergency operations have been informed by past events involving entities such as Rockefeller Foundation-funded studies and system responses to blackouts that involved the Northeast Blackout of 2003, interactions with neighboring operators like Independent Electricity System Operator (Ontario) and procedures used by utilities including Consolidated Edison.

Environmental and Energy Policy Initiatives

PJM’s market and planning activities intersect with federal and state environmental policies like the Clean Air Act, state renewable portfolio standards in New Jersey, Maryland, and Illinois, and regional initiatives such as the Regional Greenhouse Gas Initiative. Integration of renewable energy and storage resources involves project developers like SunPower, First Solar, Vestas, Siemens Gamesa Renewable Energy, and battery manufacturers such as Panasonic. Coordination with research institutions and policy organizations like the Rocky Mountain Institute, Natural Resources Defense Council, Environmental Defense Fund, and Sierra Club shapes efforts on emissions, interconnection queues, and capacity market reforms.

Criticism and Controversies

PJM has faced criticism and legal challenges involving market design, capacity market rules, and transmission planning from stakeholders including state governors, utilities like FirstEnergy, independent generators, and advocacy groups such as Public Citizen. High-profile disputes have referenced decisions by the Federal Energy Regulatory Commission and litigation involving companies such as NRG Energy and AES Corporation. Concerns about market power, pricing during tight system conditions, and queue management have prompted studies by Brattle Group, Potomac Economics, and academic critiques from institutions like Massachusetts Institute of Technology and Harvard University. Debates over resource adequacy rules, renewable integration, and transmission cost allocation have engaged state agencies including the New York State Public Service Commission and interstate compacts.

Category:Electric power transmission system operators in the United States