PJM Addresses Local Supply Issues

Deck: 

Electric shortages and the generation overbuild continue to co-exist.

Fortnightly Magazine - April 2007
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The PJM Interconnection has evolved significantly over the past few years. PJM expanded its footprint enormously between 2002 and 2005. It now traverses 13 Mid-Atlantic and Midwestern states. The PJM regional transmission organization (RTO) now represents the world’s largest centrally dispatched electric grid, with installed capacity approaching 167,000 MW by the summer of 2007.

While maintaining its stance as the most sophisticated competitive electricity market in the country, PJM still faces several challenges, all of which are augmented by its expanded footprint. Most prominent is the RTO’s plan to implement a new capacity market construct, referred to as the reliability pricing model (RPM), as early as this summer. Further, parts of PJM are ailing from transmission congestion issues that limit access to abundant, cheap power sources in the region.

During the summer of 2006, PJM broke its peak-load record three times. PJM has registered a peak-load growth of 8.3 percent since 2005. At the same time, transmission congestion is causing localized supply shortages in PJM despite the overall overabundance of generating capacity in the region. The RTO is devising a new resource-adequacy construct aimed at providing sufficient price signals for where and when to invest in transmission and generation-capacity additions.

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