Interdependence is a given at PJM Interconnection, which oversees a 62,555-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 850 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 61 million consumers in its territory.
PJM's members include power generation companies, transmission owners, electricity distributors, power marketers, and large industrial consumers.
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.
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.
Its Markets and Operations unit has expertise in Energy Marketing, Reliability Pricing Model, Financial Transmission Rights, Demand Response, Financial Credit, Ancillary Services, Synchronized Reserve, and Regulation.
PJM subsidiary PJM Environmental Information Services reports and tracks emissions data and Renewable Energy Credits.
PJM Settlement, a Pennsylvania nonprofit corporation, handles all of PJM's financial credit settlement activities.
PJM Technologies provides services to existing and emerging energy markets, system operators, and regional transmission operators.
PJM 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 214,000 square miles.
The company reported a slight revenue dip in 2013 due to lower interest income and other income, partially offset by higher deferred regulatory income, service, and membership fees. PJM posted net income growth that year of 16% due to higher income tax benefits.
The company grows through organic expansion and by absorbing the operations of power transmission and distribution companies. To upgrade its infrastructure, in 2013 PJM authorized $1 billion in improvements to its high-voltage electric transmission system that serves the Mid-Atlantic and all or parts of other states between the Mid-Atlantic and Chicago.
Generation owners plans to retire more than 14,000 MW of coal-fired generation by the end of 2015. PJM is dealing effectively with this rapid transformation and has three-year forward capacity marketattracting resources of all kinds - combined-cycle gas generators, renewable resources, demand response and energy efficiency - that enhance competition and ensure reliability. In 2013 it had more than 169,000 MW committed for future service, including 5,400 MW of new generation, and more than 12,400 MW of demand response
Mergers and Acquisitions
In 2013 the integration of East Kentucky Power Cooperative and PJM brought 3,099 MW of generating capacity and 2,797 miles of transmission lines into the PJM grid.
Growing its geographic coverage, in 2012 PJM assumed operational control of the transmission systems of Duke Energy Ohio and Duke Energy Kentucky.
In 2011 PJM integrated FirstEnergy's Ohio and Pennsylvania power utilities' transmission assets into its system.
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.
PJM 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.