PJM as an RTO


Exploring PJM series

Regional transmission organizations, broadly described as grids, are independent entities which coordinate, control and monitor the electric trExploring-PJM-Iconansmission system. Regional grid operators and independent system operators exist throughout North America, serving two-thirds of electricity consumers in the United States and more than 50 percent of Canada’s population.

The Federal Energy Regulatory Commission created RTOs with Order 2000 in 1999, with a list of characteristics and functions describing an RTO. The FERC stipulated that RTOs should be designed to evolve in order to meet challenges in the changing marketplace.

PJM received full RTO status in 2002.

The four required characteristics of an RTO

· Independence Be independent of any market participant
· Scope and regional configuration Serve an appropriate region
· Operational authority Have operational authority for all transmission under its control.
· Short-term reliability Have exclusive authority for maintaining the short-term reliability of the grid it operates.

The eight functions of an RTO   

· Tariff administration and design


Administers its own transmission tariff and employs transmission pricing that promotes efficient use and expansion of transmission and generation.
· Congestion management


Develops and operates market mechanisms to manage transmission congestion.
Parallel path flow


Develops and implements procedures to address parallel path flows within its region and with other regions.
Ancillary services


Serves as a provider of last resort of all ancillary services required by FERC Order 888 and subsequent orders.
OASIS, total transmission capability and available transmission capability


Is the single OASIS* site administrator for all transmission facilities under its control and independently calculates these two capabilities.
Market monitoring


Provides objective monitoring of the markets, it operates to identify market design flaws, market power abuses and opportunities for efficiency improvements, and propose appropriate actions.
Planning and expansion


Responsible for planning and directing needed transmission expansions and upgrades that enable it to provide efficient, reliable and nondiscriminatory transmission service, coordinating its planning with appropriate state agencies.
Interregional coordination


Ensures the integration of reliability practices within an interconnection and market interface practices among regions.

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