Interdependence is a given at PJM Interconnection, which oversees a 65,440-mile section of the North American power transmission grid that spans 13 northeastern and midwestern states and the District of Columbia. The regional transmission organization monitors and coordinates the movement of wholesale electricity in its service territory; its 750 members have a combined generating capacity of 185,600 MW. Sanctioned by the Federal Energy Regulatory Commission, PJM is charged with ensuring fair competition among power purchasers, sellers, and traders; it also is responsible for the reliable delivery of distributed electricity to 60 million consumers in its territory.
PJM's members include power generation companies, transmission owners, electricity distributors, power marketers, and large industrial consumers.
In addition to overseeing and maintaining the generation and transmission reliability of the electric system, the enterprise is also responsible for maintaining the integrity of the regional power grid as it accommodates new generating plants, and other equipment such as substations and transmission lines. PJM also analyzes and forecasts the future power needs of the region and develops renewable energy resources as a way to expand power supply options and keep prices competitive.
PJM Interconnection coordinates the movement of wholesale electricity in 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. Its total service area covers 214,00 square miles. In 2011 PJM integrated FirstEnergy's Ohio and Pennsylvania power utilities' transmission assets into its system.
The expansion of membership resulted in increased service and membership fees in 2012. This and higher FERC fees reimbursement helped to lift PJM's revenues by 12%. Despite higher FERC fee charges, and increased costs for compensation, outside services, and depreciation and amortization, the organization also posted a 12% rise in net income in 2012, thanks to its stronger revenue performance.
In a move to improve the efficiency and reliability of its operations, in 2010 PJM teamed up with Midwest ISO to coordinate the installation of synchrophasors to improve their operators' visibility of the grid. The upgrade is funded by the Department of Energy's $3.4 billion smart grid program. In 2010 the company also connected the system to more than 1,500 MW of renewable power, including more than 1,030 MW of wind energy. That year it also formed a new subsidiary to provide an auction platform for trading solar renewable energy certificates. In 2012 PJM reported that it had 1,000 MW of solar power installed across its service area.
The organization is structured to secure independence and neutrality in its business operations. It has a two-tier committee structure consisting of 10-person Board of Managers (made up of individuals with no financial interests in PJM market participants) and a Members Committee which represents the interests of participating members. The structure is designed to secure that individual members have strong input on issues while protecting the neutrality of PJM's decision-making process.
PJM Interconnection was formed in 1927 when three utilities interconnected to share resources, thus creating the world's first continuing power pool. In 1997 PJM became the first independent system operator.