Purchasing Wholesale Power

Most NOVEC customers start their day with juice. Not just fruit juice, but with electron “juice.” Press a button and the coffee maker starts brewing. Push a lever and the toaster starts toasting. Turn the dial and the stove starts cooking. Grab the orange juice from the cold fridge and start pouring. 

Where do juicy electrons come from that start your day? Answer: the PJM Regional Transmission Organization (RTO) power grid.

PJM 101
NOVEC purchases electricity from several sources, but almost all of this power travels to the Co-op through the regional high-voltage transmission grid operated by the PJM RTO. The PJM RTO grid once covered Pennsylvania, New Jersey and Maryland – thus giving it the initials PJM – but today PJM extends into13 states and the District of Columbia. PJM states are: Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. The PJM grid configures like a spider web with more than 56,000 interconnecting miles of transmission lines that serve more than 54 million people.

An RTO is an independent system operator (ISO) that takes responsibility for grid operations, reliability, and transmission service within a defined geographical region. The North American transmission grid includes all of the United States and most of Canada. It comprises nine major RTOs/ISOs. To ensure that these organizations operate efficiently and reliably, the United States government empowers the North American Reliability Corporation (NERC) to establish and enforce performance standards for all of them, except for the Texas grid, which the Lone Star state regulates.

Approximately 1,600 generation resources feed electricity onto the PJM-operated transmission grid. Because generation plants in the Midwest generally produce power at the lowest cost, PJM sends electrons through the grid each morning from these plants when demand for power starts to increase. As demand climbs throughout the day, PJM directs power onto the grid from more expensive plants.

Although utilities are working on ways to store electricity, most of it must be used when it is generated.  Therefore, PJM must have generators up and running to supply electricity when outdoor temperatures soar and customers “demand” more power to run air conditioners, or when utilities restore power to a large number of customers after a major storm. For example, when a derecho storm left about 2 million people in the dark on June 29, 2012, PJM had to have generation available for when member utilities brought their substations back online. If NOVEC, Pepco, Dominion Virginia Power, and the other utilities that had outages happened to restore power to many of their customers at the same time, and PJM didn’t have sufficient power available, there would have been a problem.

Preventing Problems on the Grid
PJM and electric utilities work hard to assure that the transmission system provides superior service. Transmission companies continuously construct new facilities, and update or replace outdated ones.

PJM conducts emergency-response drills frequently with all PJM member utilities to ensure readiness. NOVEC participates in these drills with neighboring Dominion, which exports power to NOVEC’s substations through its high-voltage transmission lines.

Despite precautions, problems have occurred. On Aug. 14, 2003, many PJM states plunged into darkness. Soon afterwards, PJM implemented new technology and operating procedures, and upgraded facilities to make a similar occurrence much less likely.

On July 7, 2010, when the temperature topped 100 degrees, power demand spiked. Coincidently, certain area transmission lines were out of service. As a result, PJM declared “an emergency event” and told NOVEC to cut power consumption immediately. Drills had prepared Co-op workers to know exactly what to do. By activating load management switches, notifying commercial customers, and sending news releases that asked customers to curtail power use, NOVEC avoided rolling blackouts. Since then, the PJM RTO system has added more generation and transmission capacity to meet power requirements for member utilities on extremely hot and cold days.

A Marketplace of Power Buyers and Sellers
In addition to performing its duties as a RTO, PJM matches electricity buyers with sellers and ensures that all transactions adhere to strict rules. All the while, PJM remains profit-neutral.

In sum, PJM orchestrates a synchronized dance of electricity generation, transmission, and load control, along with wholesale power buying and selling — all to keep the electron juice coming.

For more information about the PJM grid, visit www.pjm.com