pjm ©2007 1 pjm overview arippa valley forge, pa november 8, 2007
TRANSCRIPT
PJM ©2007 1
PJM Overview
ARIPPAValley Forge, PA
November 8, 2007
PJM ©2007 2
What is PJM?
Air Traffic Controllers for the Transmission Grid….
Operators of a Stock Exchange for Energy…
SIMULTANEOUSLY!
RELIABLY!
Match Generation to Load
PJM ©2007 3
PJM Vision/Mission
• As the primary task, to ensure the safety, reliability and security of the bulk electric power system.
• Create and operate robust, competitive and non-discriminatory electric power market
• Understand customer needs and deliver valued service to meet those needs in a cost-efficient manner.
• Achieve productivity through the efficient union of superior knowledge
workers and technology advances.
PJM ©2007 4
PJM Functions
• Operate the bulk electric power grid for reliability
• Facilitate various electric markets
• Plan for transmission expansion
• Monitor the markets to ensure competitiveness
• Provide exceptional customer/member service
• Share best practices with neighboring and international system operators
PJM ©2007 5
Planning and Market Development
• Jan. 1999 - NYMEX
• May 2000 - ICE
• June 2007 - Nodal Exchange
PJM ©2007 6
PJM as Part of the Eastern Interconnection
KEY STATISTICSPJM member companies 475+millions of people served 51peak load in megawatts 144,644MWs of generating capacity 164,905 miles of transmission lines 56,250GWh of annual energy 729,000generation sources 1,271square miles of territory 164,260area served 13 states + DCInternal/external tie lines 250
26% of generation inEastern Interconnection
23% of load inEastern Interconnection
19% of transmission assets in Eastern Interconnection
19% of U.S. GDP produced in PJM
6,038 substations
PJM ©2007 7
Current PJM Footprint
PJM ©2007 8
Backbone Transmission System
PJM ©2007 9
PJM ©2007 10
How is PJM Different From My Local Utility?
PJM does:• Maintain the “big picture” of the transmission system regardless of
ownership.
• Have, by agreement, operational control of the transmission system.
• Operate as “profit neutral.”
• Remain totally independent of all PJM members.
• Coordinates maintenance of generation and transmission systems.
PJM ©2007 11
How is PJM Different From My Local Utility?
PJM does not:• Own any transmission or generation assets.
• Function as a publicly traded company.
• Take ownership of the energy on the system.
• Perform the actual maintenance on generators or transmission systems.
• Serve, directly, any end use (retail) customers.
PJM ©2007 12
TO = Transmission Owner
GEN = Generator
IPP = Independent Power Producer
PJM PJM Control CenterControl Center
TO
Gen
Gen
Gen
Gen
IPP
TO GEN
MarketOperation
Center
TO
TO
TO GEN
IPP
Voice & Data
Local Control Centers
MarketOperation
Center
Gen
Operational Authority
PJM ©2007 13
Governance
PJM ©2007 14
PJM Authority Provided by Contract
PJMOperatingAgreement
PJM OATTariff
• Regional Transmission Provider
• Regional Control Area Operator
• Market Developer and Coordinator
• Regional Transmission Planner
ReliabilityFirstAgreement
• NERC Security Coordinator
TransmissionOwnersAgreement
Reliability AssuranceAgreement
PJM ©2007 15
StateEnvironmental
Agencies(14)
PJMMembers
(488)
StateCommissions
(14)
48,363,579,532,800Decision Combinations
FederalRegulators
(3)
ReliabilityOrganizations
(4)End UseMembers
(28)
DistributionMembers
(31)
TransmissionOwner
Members(60)
GenerationOwner
Members(107)
OtherSupplierMembers
(246)
StateConsumer
Advocates &OPSI(15)
Decision Makers
PJM ©2007 16
PJM Governance
Independent Board
Members Committee
GenerationOwners
TransmissionOwners
Other Suppliers
ElectricDistributors
End-UseCustomers
PJM ©2007 17
Members Committee Voting Protocol
Transmission Owners
Generation Owners
Other Supplier
End Use Customers
Electric Distributors
5/7 0.71
2/8 0.25
21/23 0.91
5/5 1.00
Required to pass = 0.667Number of Sectors = 5
Required Affirmative = 5 x 0.667 = 3.335
3/5 0.60
3.47
PJM ©2007 18
Stakeholder Process
Members Committee
Subcommittees, Task Forces, and Working Groups
User Groups
Planning Committee
Operating Committee
Market Implementation
Committee
Demand Side Response
WG
MRC: Market Reliability Committee
PJM ©2007 19
Overview of PJMElectricity Markets
PJM ©2007 20
PJM’s Operational Markets and Services
• 2 Energy Markets– Day Ahead– Real Time
• Reliability Pricing Model (RPM) Auction • Financial Transmission Rights Auction• Ancillary Services
– Regulation Market– Spinning Reserve Market– Blackstart Service– Reactive Services
PJM ©2007 21
Capacity by Fuel Type
Generation by Fuel Type
2005 PJM Energy Market
PJM ©2007 22
PJM Installed Capacity by Fuel Type (12/31/06)
PJM Energy Output by Fuel Type (GWh through 12/31/06)
Hydro – 7,523 MW 5% Natural Gas – 42,936 MW 26%
Nuclear – 30,776 MW 19%
Coal – 67,068 MW 41%Wind – 208 MW 0.1% Other – 2,423 MW 1.5%
Oil – 14,154 MW 8.6%
Solid Waste – 4,801 1% Hydro – 14,684 2% Coal – 411,581 57%
Oil – 2,029 .3%
Gas – 40,044 6%Wind – 788 0.1%
Nuclear – 250,995 35%
2006 PJM Energy Market
PJM ©2007 23
Options for Energy Supply
Commercial
BilateralTransactions
PJMSpot Market
Load Serving Entities Obtain energy
to serve customers
Self-scheduleown resources
ResidentialIndustrial
PJM ©2007 24
What is LMP?
• Pricing method PJM uses to …− price energy purchases and sales in PJM Market− prices transmission congestion costs to move energy within
PJM Control Area
• Physical, flow-based pricing system− how energy actually flows, NOT contract paths
PJM ©2007 25
Locational Marginal PriceLocational Marginal Price
GenerationMarginal
Cost
GenerationMarginal
Cost
TransmissionCongestion
Cost
Cost ofMarginalLosses
Cost to serve the next MW of load at a specific location, using the lowest production cost of all available generation,
while observing all transmission limits
PJM ©2007 26
• Including losses in dispatch can result in substantial cost savings through reduced energy and congestion costs
– PJM studies have estimated savings of $100 million / year
• Total RTO losses on peak days can exceed 3,600 MW/hour
Transmission LossesTransmission Losses
PJM ©2007 27
How Does PJM use LMP?
• Generators credited at generation bus LMP
• Load Servers charged at load bus LMP
• Transactions pay the difference in LMP between source and sink (explicit congestion)
• PJM LMPs are the result of the physical flow of energy, not a contract path.
PJM ©2007 28
Ancillary Service Markets
Ancillary Services are needed with transmission service to maintain reliability within and among control areas affected by the transmission service…
− Regulation Market - market based ancillary service
− Synchronized Reserve Market
− Black Start Services
− Reactive Services
PJM ©2007 29
The PJM Control Room
PJM ©2007 30
Contact PJM
Subscribe to PJM e-Mail http://www.pjm.com/about/contact/form-majordomo.html
PJM Member Relations (610) 666-8980
PJM Internet Site www.pjm.com
e-Mail Member Relations http://www.pjm.com/about/contact/form-contact.html
PJM Member Relations Toll Free (866) 400-8980