PJM's Striving for Perfect Dispatch Nets Nearly $200 Million in Savings

Savings almost equal to operating costs

News provided by

Jan 19, 2012, 11:54 ET

VALLEY FORGE, Pa., Jan. 19, 2012 /PRNewswire/ -- PJM Interconnection saved $199 million last year -- an amount almost equal to its operating costs -- by increasing efficiency in how generation is scheduled to meet electric demand requirements, particularly, the scheduling of more costly combustion turbines used to meet demand shortfalls. Accumulated savings since 2008 are $455 million.

Combustion turbines, gas or oil-fired generators that use air combustion to produce power, are often on stand-by to run in case needed because they can be brought on-line more quickly. However, the cost of having them available and running them are typically more expensive than previously scheduled generation.

"Considering the kind of year we've had with weather events such as tornadoes, early and recurring heat waves and a fall snow storm, it makes the accomplishment that much more noteworthy," said Michael Kormos, senior vice president-Operations. "The fact that the savings realized is about what our operating costs are for reliability services shows the kind of efficiencies possible through an innovative and collaborative spirit."

Scheduling the amount of power needed to meet consumers' use is not a perfect science given variables such as weather. However, PJM has set aggressive goals each year to reach "perfect dispatch," where generation scheduled equals the amount needed. Each incremental improvement toward perfect dispatch translates into savings for PJM, and ultimately its members.

PJM Interconnection, founded in 1927, ensures the reliability of the high-voltage electric power system serving 60 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region's transmission grid, which includes 62,000 miles of transmission lines; administers a competitive wholesale electricity market; and plans regional transmission expansion improvements to maintain grid reliability and relieve congestion. Visit PJM at www.pjm.com.