PJM Synchronizes Power on an Aging Grid

YOUNGSTOWN, Ohio — Each morning when we flip a light switch, we don’t give a second thought to whether the lights will turn on. Most of the time, they do.

This simple task belies the mind-numbing complexity of what it takes to produce, transmit and then deliver the huge quantity of electricity to households, businesses and factories that enable these lights to work. This network – composed of thousands of electrical generators and hundreds of thousands of miles of transmission and distribution lines across the country – is known collectively as “the grid.”

Directing this power to customers and ensuring reliable delivery throughout the country is also an enormous undertaking, which is the responsibility of grid management organizations such as PJM Interconnection – an operation that synchronizes the sale and delivery of electrical power in all or part of 13 states – including Ohio – and Washington, D.C.

“We operate the world’s largest energy wholesale market,” says Susan Buehler, spokeswoman for PJM. “We manage the flow of electricity and make sure we keep the lights on in our whole region.”

PJM, the acronym for Pennsylvania-Jersey-Maryland, is based near Valley Forge, Pa., and manages power markets throughout Ohio, Pennsylvania, New Jersey, Maryland, Delaware, West Virginia and most of Virginia. It also manages the grid in parts of eastern Kentucky, eastern Indiana, northern Illinois, northern North Carolina, and a small portion of southwestern Michigan and northern Tennessee.

In all, the system encompasses 243,417 square miles, 82,000 miles of transmission lines and 65 million people, Buehler says. In addition are 993 vendors, transmission companies and energy companies that buy and sell under PJM’s grid management system.

PJM focuses on three areas of the business, Buehler says, one of which is operating and managing the grid. Another is planning. “We have a whole division for planning transmission projects 15 years into the future,” she says. “We assess whether Ohio, for example, will have enough electricity 10 years from now.”

The third focus, Buehler says, is managing the region’s electrical wholesale market. “We don’t own any of the transmission lines or plants,” she says. Instead, the organization is revenue-neutral and operates based on the management fees charged its members. “If there’s money leftover, we refund it to our members,” she says.

The entity was established in 1927 with three utilities that formed the world’s first shared resources power pool. As demand for power rose after the Second World War, more utilities joined with PJM. In 1997, PJM became a fully independent organization and opened its first bid-based energy market. Today, PJM employs 650.

“It’s the largest, oldest and best-managed grid in my opinion,” says Carl Avers, CEO of Youngstown Thermal, a district heating and cooling company that serves downtown Youngstown.

Avers says the grid PJM manages allows for competitive pricing that enables companies such as his to distribute energy at a more affordable rate. In Ohio, for example, PJM coordinates purchasing through 15 suppliers, which enhances competition throughout the region.

“In Detroit, which is managed by the Detroit Edison system, I have one supplier,” Avers says. “With PJM, I have 15 suppliers that compete against one another. I put it out to bid, get 15 bidders and select the lowest one.”

Avers adds that PJM has programs that other grid managers don’t. “They have what is called their demand response program,” he says. This enables large energy users to save thousands of dollars a year on their energy bill by shutting down for a total of 10 hours a year – usually one hour at a time – during peak energy use periods.

These break periods occur on days when energy use is the highest, such as between 3 and 5 p.m. on the hottest days of summer, Avers says. “One of my clients shuts down between 4 p.m. and 5 p.m. during the hot days. They received an $80,000 rebate. It’s a weather-dependent program, and in a way, they’re managing us and giving us the economic benefit.”

Nevertheless, across the national grid is a real concern that aging transmission lines and power plants place the United States at a disadvantage in terms of reliability and security.

According to the U.S. Energy Information Administration, construction of the country’s electrical infrastructure began during the early 1900s and future investment in new technologies was driven by demand. Now, some of those older generating plants and transmission networks have reached the end of their lifecycle and need to be either replaced or upgraded.

Among the greatest challenges the grid faces are funding these new upgrades, determining new routes for transmission lines, expanding these lines to renewable energy-generation sites, and protecting the grid from terrorist, military and cyber attacks.

The grid that spans the continental United States is composed of three interconnected grids – the Eastern Interconnection encompasses the region east of the Rocky Mountains and a portion of the Texas panhandle, the Western Interconnection covers the region west of the Rockies, while the Electric Reliability Council of Texas handles most of Texas.

As such, demand changes as population centers shift, observes Larry Dix, president of Quality Switch Inc., Newton Falls. The company manufactures switches used on electrical transformers all over the country and does a significant international business.

“The industry has been relatively stable,” Dix says. “Everybody’s kind of waiting because we need to rebuild the grid and add to it when we need it.”

Additional power supply has moved to the southwestern and the southern regions of the country, Dix says, following the shifting population. So, not only does the aging infrastructure need to be replaced, capability needs to be expanded in areas that are experiencing population growth.

“There are some things to worry about, such as spinning reserves or how much generation is available that we’re not using,” Dix says.

Thirty years ago, that surplus stood at nearly 25%. Today, it’s down to about 2% or 3%, he says.

Moreover, while overall energy consumption has risen, capacity has generally decreased since some of the obsolete and older coal-fired power generation plants have come offline and are yet to be replaced with modern and more efficient plants.

“There are things that need to be done,” he cautions. “A lot of the utilities are waiting for the guidelines.”

Copyright 2024 The Business Journal, Youngstown, Ohio.