PJM Marks 94 Years of Keeping the Lights On

The RTO Has Adapted to Unforeseen Challenges for Nearly a Century; Now, It’s Preparing for the Grid of the Future

1046
94th Anniversary

The energy industry leaders of the 1920s could not foretell what disruptive events the ensuing century would bring – the Great Depression, World War II, 9/11 and the coronavirus pandemic, to name a few.

But three mid-Atlantic utilities – Philadelphia Electric, PP&L and PSE&G – decided that pooling their power would be the most efficient, economic path into any future, for their businesses and for their customers.

On Sept. 27, 1927, they established the first continuous power pool in the United States.

The utilities had found in exploring such a collaboration that sharing resources could reduce their capacity reserves, lower operating costs and improve service reliability. A study of the potential interconnection concluded that its economies would translate to an average annual savings of more than $3 million.

The utilities’ decision has paid off so successfully that PJM’s footprint now covers 65 million residents in 13 states and the District of Columbia. Today, PJM operations, markets and planning result in annual savings of up to $4 billion.

More than 90 years later, these tenets still anchor PJM’s mission of operating a reliable bulk electric system that delivers power when and where it is needed, at the least total cost.

An Industry in Flux

PJM’s core mission has always been, and will continue to be, keeping the lights on. But that job is getting more complex by the day. Drivers of change are coming from all directions. Extreme weather events are increasingly common. State and federal policies aim to decarbonize the grid. And a rapidly evolving fuel mix is leading grid operators, including PJM, to rethink their traditional approaches to their foundational functions – markets, operations and planning.

As PJM moves forward, it continuously reviews lessons learned from past disruptive events, whether they occur within our footprint or out of it. That includes COVID-19, the winter storm that devastated Texas in February, and the recent destruction of Hurricane Ida.

Priorities Going Forward

PJM’s priorities for the next year will be its priorities for the foreseeable future – maintaining reliability while facilitating the decarbonization policies and other policies advanced by state and federal government; preparing for and planning for the grid of the future; and fostering innovation. This will be expressed in work on PJM’s market rules, offshore wind, the interconnection queue, the participation of home solar and other distributed energy resources in the markets, as well as the integration of renewable generation. Like those industry leaders who laid the foundation for the PJM of today, no one can foretell precisely what the future holds. But PJM remains confident that the RTO model, which has proved nimble at adjusting to challenges over the past tumultuous century, will weather any change.