What’s Past Is Prologue at Annual Meeting General Session

There was no time machine in the room but attendees took a trip back into history Tuesday at the PJM Annual Meeting.

Craig Glazer, PJM vice president – Federal Government Policy, led the General Session through the first 70 years of PJM. His presentation, Looking Back to Look Forward: The Early Years of PJM 1927-1989, examined PJM’s evolution within the context of business, industry, the nation and the world at large.

Glazer set the stage for the other panels, which focused on PJM’s past 20 years and its future.

PJM began in 1927, a seminal year in American history – the height of the Jazz Age, when Charles Lindbergh made the first solo flight across the Atlantic, Babe Ruth hit 60 home runs and the Columbia Broadcasting System’s (CBS) had its first radio broadcast.

Glazer pointed out that what became PJM and the interconnection can be traced to two pioneers– Princeton Professor Malcolm MacLaren and Farley Osgood of PSE&G. In the mid-1920s, the two developed separate reports that found that pooling the systems of PSE&G, PECO and PP&L, and linking them through a common transmission line, would bring savings of $2.8 million (roughly $40 million in 2017 money).

This led to the construction of the 220 kilovolt transmission line, which was central to coordinated operations and was completed in 1928. The formation of the power pool was reported in a front page article in The New York Times as a new “superpower system” which would make possible “diversification, dependability and concentration of power on an enormous scale.”

Glazer described how federal regulation and initiatives, such as the Tennessee Valley Authority, changed the structure of the industry in the early 1930s. And how utility marketing genius Ashton “Budd” Collins sold PP&L and Philadelphia Electric Company on his new marketing logo, Reddy Kilowatt.

While he touched on popular culture throughout, Glazer brought the presentation back to the industry, including the effects of the Federal Power Act, which expanded regulatory jurisdiction to include all interstate electricity transmission and wholesale power sales.

Following World War II, the demand for electricity and electrical appliances sent utility companies scurrying for capacity as usage jumped 14 percent a year.

The 1950s was the dawn of the nuclear age.

  • 1954 – The Atomic Energy Act of 1954
  • 1956 – PJM grew, signing the Five Party Interconnection Operating Agreement in September, adding the GPU companies and BG&E to the power pool.
  • 1957 – First U.S. large-scale nuclear power plant began operation. Built by the federal government and operated by the Duquesne Light Company in conjunction with the Westinghouse, the pressurized-water reactor supplied power to the city of Pittsburgh and western Pennsylvania.

Challenges in the 1960s led to new reliability efforts.

The 1970s meant the oil shortages in 1973-1974 and President Carter’s emergency natural gas act in 1977. Carter said, “we must face the fact that the energy shortage is permanent…the shortage of natural gas has become a crisis….”

  • 1975 – MIT professor Fred Schweppe introduces theory of “locational marginal pricing.” In 1988, Schweppe published a book, Spot Pricing of Electricity.
  • 1977 – PECO CEO and Chairman of the Board Robert F. Gilkeson and Pennsylvania Governor Milton Shapp speak at PJM’s 50th anniversary event.
  • 1979 – The Three Mile Island Meltdown on March 28, which led to a decade of utility prudence reviews and GPU facing financial peril.

By the end of the 1980s and Glazer’s presentation, electronics-friendly homes had a microwave, answering machine, personal computer, compact disc player, video cassette recorder, game console and analog TV.

  • 1981 – Delmarva Power & Light and Atlantic Electric join PJM in 1981
  • 1986 – Chernobyl Disaster in what is now Ukraine.
  • 1981 and 1984 – The successful commercialization by PPL of units 1 and 2 at the Susquehanna station.