Who is our grid operator, PJM?

PJM Interconnection (PJM) is our regional power grid operator, servicing all of Washington DC as well as 65 million people from Chicago to New Jersey. PJM is responsible for coordinating and delivering wholesale electricity across its service area to utilities companies (like Pepco) and other high-power-need entities. Regulated by FERC, PJM controls and maintains thousands of miles of transmission lines, helps set wholesale energy prices, and handles interconnections to new energy sources such as power plants, large solar farms, and other projects.

In the local DC context, our utility Pepco purchases energy from PJM. Since Pepco is not allowed to generate its own electricity to sell to customers (DC law forbids this), Pepco gets the vast majority of energy from PJM. PJM thus connects Pepco (and all of us in DC) to the power plants and other energy generators across the region that help keep our lights on.

So what happened with this huge energy increase this summer? Capacity prices for electricity soared on June 1. A capacity price reflects the high demand price for a MW-day, always in the summer months when we use more electricity. In just one year, the capacity price jumped 833% - a price that is passed almost entirely onto consumers.

The reasons for the jump are many, but they come down to expansions of new energy-intensive customers (like data centers), retiring dirty power plants, and a long backlog of new energy projects that PJM has been slow to interconnect. In fact, many governors have said “the organization had been slow to add new solar, wind and battery projects that could help lower the cost of electricity” while paying “existing power plants too much to supply electricity to their states,” per the New York Times.

Experts have criticized PJM because it is controlled and influenced by the corporate energy companies that constitute its membership, which includes over 1,000 members: most of whom are utilities, power plant companies, transmission line owners and energy traders. This leaves a glut of energy projects like solar, wind, and battery storage waiting in the queue for years, which would lower the cost of energy and increase reliability.

Capacity, reliability, and grid interconnection is an issue across the nation. Our grid is an old system that slacked to modernize, for years enjoying cheap energy and delivery prices. Now, in the midst of a climate and energy crisis, customers (and grid operators) are feeling the effect. But there are current efforts to alleviate the energy pain.

In Oregon, state lawmakers passed laws enabling the use of grid-enhancing technologies to address the transmission backlog. Per KION, this will allow many more renewable, clean energy projects to come online to serve Oregon customers. Pennsylvania governor Josh Shapiro also worked with PJM (following a legal complaint) to shield his state’s customers from massive price hikes while they work on addressing the transmission issue. In Maryland, a new law requires utilities to disclose both public and nonpublic votes on matters before PJM to the state regulator, allowing further transparency on how our electric rates are calculated.

Our energy capacity dilemma is a complex issue, but one that can be addressed, even here at the local level. Understanding how PJM operates and how it affects your bill is important to understanding how we can best advocate for affordable, clean energy right here in DC.