By James Burkhamer

Chronicle Contributor

PJM is not a secret government organization or other mysterious entity, but they are nonetheless quite powerful, as PJM controls more of our lives than people realize.

Ironically, most people have never even heard of PJM. But every time you turn on the lights, lower the air temperature, or turn on a kitchen appliance – there they are, behind the scenes making it all happen.

PJM stands for Pennsylvania Jersey Maryland. How does that affect Ohio though? PJM Interconnection is in fact the regional power grid for all of Ohio, along with 12 other states.

This power grid stretches from the Atlantic Ocean, through Washington DC, through the hills of West Virginia, and through Ohio all the way to Chicago.

This is the largest power grid in the United States, serving 67 million customers. Naturally, PJM has grown substantially since its inception in 1927.

The original idea during Thomas Edison’s lifetime was to create a power pool for Pennsylvania utilities to dispatch electric generating plants on a lowest cost basis.

When Maryland and New Jersey utilities joined in 1956, PJM was coined. In the late 1990s, the Federal Energy Regulatory Commission (FERC) restructured the U.S. utility industry, and opened up deregulation. Deregulation involves many market participants, instead of a singular utility deciding everything.

The various Ohio utilities were initially divided between the Midwest System Operator grid (MISO) and PJM. By 2012, all Ohio utilities had left MISO for PJM, including Dayton Power and Light (now AES).

If anyone remembers the massive 2003 blackout, much of the blame was placed on MISO and First Energy. (Urban legends blame a squirrel for starting this mess, but the truth is a little more complicated).

The blackout started in northeast Ohio, then cascaded through Canada and back down into New York.

If PJM hadn’t caught it in time, the entire eastern half of the U.S. would have been affected. Because of better operations and economic reasons, the Ohio utilities gradually migrated from MISO to PJM, along with many other states.

So what exactly does PJM do? Almost every power generation source in the region, small and large, feeds into this 13-state monster grid.

PJM decides everything from there - the hourly price of electricity, dispatching which power plants to turn on and when and transmission routes. Everything is based on complex algorithms and is 100 percent driven by supply and demand.

The numbers are staggering. PJM controls over 1,400 power generation facilities with 182 gigawatts of capacity. (Fans of Back to the Future might remember that a mere 1.21 gigawatts was required for time travel).

There over 88,000 MILES of transmission lines on the grid, and over 800 tera-watt hours of electricity delivered in 2025. A terawatt-hour would be a trillion watt-hours of energy – enough to keep a billion household washing machines running for an hour.

Many people assume that our local utility AES has a “Star Trek” control room, like the one pictured. They don’t. AES does have a smart operations center for transmission lines, but nothing on the scale of PJM’s control room in Harrisburg, Pa.

This is because local utilities generally do not build, maintain or operate power generation plants anymore. FERC changed all this in the 1990’s. The local power utilities are only responsible for transmission, distribution and billing.

Transmission entails enormous power lines running from generation plants to substations, and distribution is the overhead and buried wires from those substations to our homes and businesses.

The electricity consumed in Ohio may or may not be generated IN Ohio on any given day. The electricity generated by West Virginia coal plants might end up in New Jersey.

In fact, PJM might buy power from its neighboring New York power grid, which in turn might sell power to its neighboring Canadian or New England grids next week.

This series of interconnected hamster wheels has two purposes – to provide the lowest possible cost, and more importantly to ensure that the lights turn on when we need them to.

This of course leads to the grid capacity issue, which has been controversial since 2024. PJM does its level best to predict peak demand for the year (when everyone and their brother is running A.C. all at the same time).

This occurs during the hottest days of summer, which we’re unfortunately all too familiar with recently. Sometimes PJM requests or even pays some larger customers to curtail electricity usage during peak days.

But it’s only a handful of days out of the year, one might say. What’s the big deal? The problem is that if electricity demand exceeds grid power capacity even for a few seconds, the entire grid crashes (not good).

This crash nearly happened on July 3, when PJM and the U.S. Department of Energy took emergency action during the crest of the heat wave, Reuters reports.

PJM set an all-time peak record at 166,000 MW of instantaneous demand at 6 p.m. The grid received a temporary environmental permit restrictions for generation units from the DOE, and was prepared to order the shutdown of data centers.

However, a sufficient number of commercial and industrial customers curtailed their loads, averting the need for further action.

PJM pays power generators MILLIONS of dollars per year to be on “standby”, whether they’re actually dispatched or not. This is akin to a fast-food restaurant having idle employees just standing around – just in case a bus load of baseball players or band kids show up wanting burgers.

This is handled by PJM through annual capacity auctions, which account for a substantial portion of our electricity rate per kWh. That’s right! We’re paying for the hottest days of summer all year long. However, without a capacity market, the power grid would be more like the wild west than the reliable and stable power grid we’ve all come to know and love.

The controversy erupted in 2024 when the capacity auction exploded in dollar amounts by a factor of ten. The problem is that PJM can’t build power plants fast enough to accommodate the growing electrification of literally EVERYTHING (gaming, cryptocurrency, AI, EV’s, data centers, etc.).

Pennsylvania governor Josh Shapiro unilaterally decided for 13 states to issue PJM an ultimatum: put a dollar cap on the auction price, or else Pennsylvania will take their ball and go play with a different power grid. PJM quickly threw the white flag since they are in fact headquartered in Pennsylvania.

While the cap did lower electricity rates for all of us (as Shapiro likes to brag about), there is very real concern that capping capacity prices will eventually result in rolling blackouts. Not because of a squirrel or thunderstorm, but because power generators can’t keep up without an inflow of sufficient capital.

The future is uncertain as even some Ohio utilities are considering returning to MISO, or even starting our very own Ohio power grid (similar to New York and Texas).

Regardless of which power grid we end up in – without more power generation being built, our proverbial goose is literally cooked. The aging transmission infrastructure in the U.S. is a separate issue that also needs addressed. It’s a matter of simple choices. Either we use less electricity, or pay up and modernize the power grids (environmental consequences are a cost too).

The likelihood of less electricity usage is -5 on a scale of 1 to 10. PJM has worked wonders for Ohio for over a decade, but the electricity bomb is ticking away more every year. Every time we use AI to turn our pet into a cartoon, the ticking gets louder.

James Burkhamer is the owner of Miami Valley Power and Gas, a local energy consultant dedicated to helping small businesses and nonprofits reduce their risk and spending. Learn more at www.mvpg.org. ■