Table 5 Summary of network arrangements in PJM
Institutional
arrangements
Transmission
planning and delivery
Network pricing
Modernising
network
arrangements
Institutional model:
 PJM is the ISO/
RTO for all or part
of 13 US states
and the District of
Columbia
Planning:
 PJM carries out a
regional transmission
expansion planning
process to ensure the
network meets future
requirements
 Review and approval
decisions for projects
are made by member
states, following
broad stakeholder
involvement
Delivery:
 PJM mandates TOs to
perform transmission
upgrade and
extension projects for
security of supply
Investment regime:
 Merchants may invest
in interconnection
assets, although they
are subject to strict
regulatory oversight
by PJM
 PJM coordinates
projects with RTOs in
its region to ensure
the Eastern
Interconnection is
efficiently
coordinated, this
includes NEISO,
NYISO and MISO
 PJM has high
resolution nodal
pricing, with
around 2,000
nodes in its
operational area
 To ensure
markets remain
liquid, PJM
averages nodal
prices into lower
resolution hub
prices
Readiness for
decarbonisation:
 There is no
specific procedure
to ensure nonnetwork solutions
are considered
 However, PJM
does operate a
reliability pricing
capacity market
which provides
payments for load
reduction
 PJM currently has
about 10 GW of
demand-side
response capacity
Readiness for
decentralisation
 High-resolution
nodal pricing
provides
investment
incentives for
distributed
resources
Note NEISO = New England ISO; NYISO = New York ISO; MISO = Midcontinent ISO; RTO = regional transmission organisation; ISO =
independent system operator; DSR = demand-side response.
Source Vivid Economics
112
W. Xiaoming et al.