1. Congestion Management in a Market Environment 2 nd CIGRE / IEEE PES International Symposium San Antonio, Texas October 5, 2005 Kenneth W. Laughlin

2. PJM RTO on January 1, 2005 Generating Units1,400 Generation Capacity170,807 MW Peak Load131,600 MW Annual Energy648,000 GWh Transmission Miles55,000 Area (Square Miles)186,000 Customers21 Million Population Served 50+ Million States (+ D.C.)13 states + D.C. Generating Units1,400 Generation Capacity170,807 MW Peak Load131,600 MW Annual Energy648,000 GWh Transmission Miles55,000 Area (Square Miles)186,000 Customers21 Million Population Served 50+ Million States (+ D.C.)13 states + D.C. PJM RTO (January 1, 2005) PJM - Full Service RTO Control Area Operator Transmission Provider Market Administrator Regional Transmission Planner NERC Reliability Coordinator

3. Congestion Management - Operations System Operators must address all events, all constraints – reliability, economic and natural –Perform future studies to determine safe operating conditions –Perform day-ahead studies of expected operating conditions to test its operating plan –Operate in real time according to day ahead plan

4. Congestion Management - Tools Real-time assessment of power system Real time alarm systems for real and contingency overloads Calculation of sensitivity factors of generation flows on the transmission system Determination of redispatch options to maintain reliable operations

5. Congestion Management - Tools Security-constrained, economic dispatch Determine the economic value of generation in real time at every node on the system based upon: –transmission system parameters –generation loading –transactions

6. Congestion Management - Methods Transmission Line loading Relief (TLR) –Identify flowgates (frequently constrained segments of the transmission system) –Determine generation impact on flowgates –Monitor flowgates and generate alarms for overload conditions (manually) –Curtail regional transactions impacting loading on flowgates based upon priority of transmission service

7. Congestion Management - IT Math is the same as it was in 1970 Difference is the technology and speed of computing Improvement is the scope of options and the size of the system that can be monitored and priced in real time PJM produces a system dispatch every five minutes for an 87,000 MW peak load system and reports 10,400 prices with a 1 minute time lag.

8. Congestion Management - Experiences Market to Non-Market –identify flowgates regionally –identify and agree to acceptable flows on flowgates imposed by each region –if flowgate limit is exceeded issue alarm –regions without LMP will curtail transactions to respect flowgate limits –regions with LMP will redispatch generation to respect flowgate limits

9. Market to Market –Identify flowgates and level of acceptable flows by each region on each flowgate –If the reliability limit of the flowgate is exceeded, all regions impacting the flowgate will redispatch generation to respect the flowgate limit Congestion Management - Experiences

10. Congestion Management - Symposium Symposium Sessions Congestion Management – Operations Congestion Management – Methods Congestion Management – Experiences Congestion Management – Information Technology

11. Congestion Management Market Role Markets ( in North America ) Link Reliability (defined by standards – North American Electric Reliability Council) Exercise of Free Market opportunities

12. Congestion Management LMP Role Locational Marginal Pricing is signal used to Link Reliability Exercise of Free Market opportunities Generation Construction

13. Congestion Management Industry Major Challenge Signal(s) to Incent Transmission construction

14. Congestion Management Symposium Participant Challenge Actively participate in Sessions Communicate ideas Resolve questions Use information To define academic research To share To foster industry development