In Times of Uncertainty, the Electric Grid Remains the Foundation for Continuity and the Enabler of Change

Focusing on the present. Reflecting on the past. Thinking about the future.


By Dr. Ake Almgren, Chair – PJM Board of Managers

While we are currently in difficult and uncertain times, we must, more than ever, stay focused on our core mission of keeping the lights on – at the least cost – for the 65 million people we serve in 13 states and the District of Columbia.

Operating the bulk power grid amid a pandemic is a new challenge, but we have faced large-scale threats and tests before.

Three months after I took my seat on the PJM Board in 2003, the Northeast was plunged into a two-week-long blackout. While the PJM region was, for the most part, unaffected, our experience helping our neighbors in their restorations and learning from the event bolstered our resilience.

In more recent years, our operations were challenged by the June 2012 derecho, followed later in that year by Superstorm Sandy, and by the 2014 Polar Vortex.

We adapted our wholesale markets, implemented lessons learned and came out stronger.

Together, we will get through this newest challenge, and use the experience to help us prepare for the future.

Front Seat to Evolution

In a way, these high-profile events represent concentrated examples of the adaptation going on in the ever-changing electric industry landscape.

During 2004 and 2005, followed by a smaller second wave from 2011 to 2013, PJM expanded most substantially and created a truly regional transmission system with wholesale markets that have proven their versatility and provided tremendous benefits to the consumers they serve.

The economies of scale created by the ability to move power across a large geographic region are substantial – our value translates to annual savings to consumers of $3.2 billion to $4 billion.

Perhaps nothing signifies the change the power industry has experienced over the past 20 years as much as the diverse fuel mix we have today – driven by the competition our markets provide, the shale gas revolution and the rise of renewable technologies.

Few, if any, may have been able to predict this resource makeup when PJM’s competitive wholesale electricity markets began operating over 22 years ago.

Markets accelerated the change in resources. This change is unprecedented in size and speed. In the last 10 years, about 30 GW have retired, while about 30 GW of new generation – primarily natural gas – have come on. The result is the lowest electric energy prices since 1997 and much reduced emissions. In fact, between 2006 and 2016, among all of the states in the U.S., Ohio and Pennsylvania had the biggest absolute reductions in tons of CO2.

Transmission Is Key

This fast and huge transition in power generation without compromising reliability would not have been possible without a very robust transmission system. It is a vast transmission system we operate, comprised of more than 84,000 miles of transmission lines across the PJM footprint – 369,089 square miles – and 6,650 substations, interconnecting with more than 180,000 MW of power generation.

The strength of the transmission system is the result of PJM’s planning and the transmission owners’ maintenance/modernization. PJM’s comprehensive and uniquely transparent long-term Regional Transmission Expansion Plan (RTEP) process identifies the need for changes and additions to the system up to 15 years in the future.

Planning such a large system is not a trivial matter. In fact, as we have expanded the PJM footprint, we asked ourselves, was it possible to plan for the whole region? It turned out that we could do it, and we have continued to develop our forecasting models and planning tools.

Transmission will remain the foundation for reliability, resilience and efficient markets. If anything, with a future of more variable resources on the system, the importance will be more, not less.

PJM Fosters Innovation

Throughout its history, PJM markets have stimulated innovation. In particular, our ancillary services markets have fostered new technologies like batteries. PJM was the first system operator in the nation to have a grid-scale lithium ion battery system – 1 MW/250 kWh – installed on campus, demonstrating how energy storage can help quickly balance short-term variations in electricity use.

In addition, we have supported innovation by participating in pilot projects like we did for vehicle-to-grid (V2G) charging of plug-in electric vehicles.

Looking forward, it is very important that we continue to learn, adapt and innovate. We know that there will be more variable resources (wind and solar) on the system, more distributed resources (distributed generation, storage and demand response), and changing load patterns with the increased use of electric vehicles. The challenge – and the opportunity – is to find ways to incorporate these and other changes in the most efficient way.

PJM Works Hand-in-Hand With Members and Stakeholders

This is all a huge job, and PJM Interconnection cannot do it alone. Our successes are only achieved in collaboration with our membership, which now stands at over 1,000.

Ever since I joined the Board of Managers, I have been impressed by the methodical stakeholder process. While at times cumbersome, it is a dynamic forum with dedicated and engaged professionals, representing companies and organizations from the five discrete sectors, and who reach beyond their personal interests to work together to find solutions in the ever-changing industry landscape. It is a great asset not to be underestimated.

Another important category of stakeholders is the states within PJM. For a long time, we had a common denominator: reliability at least cost. It is changing with states having more specific public policies, not least in terms of clean energy. Looking forward, we must find ways to incorporate the diverse interests of the 13 states and the District of Columbia, while at the same time maintaining the integrity of the markets and all of the shared benefits of operating over a large footprint.

In Summary

For now, we must stay very focused on our core mission of keeping the lights on. Like we have done in the past, we will get through this with experiences we can learn from.

Turning the new lessons learned into action – and continuing to adapt and innovate in operations, planning and markets – will make us and the whole PJM community stronger going forward.