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PJM Interconnection’s operation of the high-voltage electric grid and wholesale electricity market provides significant value to the region it serves.
PJM’s regional grid and market operations produce annual savings of $2.8 billion to $3.1 billion in ensuring reliability, providing the needed generating capacity and reserves, managing the output of generation resources to meet demand and procuring specialized services that protect grid stability.
The following summarizes the efficiencies and cost savings PJM produces in delivering these vital services to the region.
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PJM manages the high-voltage electric system over a large geographic area encompassing 13 states and the District of Columbia
Based on forecasts of how much electricity will be needed each day, PJM accepts offers from electricity producers and determines how to meet the demand in the most cost-effective way. This process takes into account the ability of the transmission system to deliver power.
PJM reacts to changes in demand in real time, adjusting generation to be in balance with demand and maintain the transmission system at safe operating levels.
PJM’s regional planning process assesses the need for transmission upgrades to ensure reliability, increase efficiency and support public-policy goals.
The fact that PJM plans for resource adequacy over a large region results in a lower reserve margin than otherwise would be necessary.
GridInvestment: $1.1-1.4 billionsavings
PJM’s efficient generation interconnection process combined with the competitive RPM capacity market has enabled less efficient generation resources to retire and to be replaced with more efficient, less costly, plants.
PJM’s dispatch process enables electric energy to be exchanged economically and automatically when less expensive resources in one area can be used to meet consumer electricity demand in another area.
PJM also has increased the efficiency of its dispatch processes through the Perfect Dispatch initiative.
Energy Production Costs:
$525 million savings
$100 million savings
PJM operates markets for two grid services, regulation and synchronized reserve, which help ensure the stability of the power system.