From Peco's basement, a power giant was born

Ninety years ago, three electric companies assembled at the Center City headquarters of Philadelphia Electric Co. and formed the world’s first continuing power pool to coordinate use of the region’s generating plants.

Executives from the modern incarnations of those three companies — Peco, Public Service Electric & Gas Co., and PPL Electric Utilities — came together again Friday to mark the anniversary at the Valley Forge headquarters of PJM Interconnection Inc., the giant regional grid operator that grew out of that union.

Camera icon Federal Energy Regulatory Commission
PJM encompasses more than 20 utilities and 65 million customers.

The power pool, which became known as the Pennsylvania-New Jersey-Maryland Interconnection in 1956, after the Baltimore utility joined the group, now includes more than 20 utilities whose territories extend over 13 states and the District of Columbia, between the Hudson and the Mississippi Rivers.

“We have the awesome responsibility for keeping the lights on for 65 million consumers,” Andrew L. Ott, PJM’s chief executive, said in a prepared statement. “To think we began in the basement of the Peco building and have grown to 700 employees and more than 1,000 members is incredible.”

The power pool’s original purpose was to dispatch electric-generating plants on a lowest-cost basis, thereby reducing the electric costs for all members of the pool. That’s the general concept behind PJM today, although its authority to regulate wholesale power markets and new power and transmission projects has grown immensely.

In 1997, the Federal Energy Regulatory Commission (FERC) began restructuring
electric utilities, setting the stage for the market-based systems that now characterize power generation in the Northeast and Mid-Atlantic regions.

PJM was designated a federally authorized independent system operator, managing electric grid functions that were previously managed by local utilities. Grid operators are now formally called regional transmission organizations.

Scheduled to attend Friday’s festivities were Denis O’Brien, Peco’s former chief executive, who now oversees six Exelon Corp. utilities that are PJM members; William Spence, chief executive of PPL Corp.; and Ralph Izzo, chief executive of PSEG, parent company of the New Jersey utility PSE&G.

Also included in the event were Richard Mroz, president of the New Jersey Board of Public Utilities; Gladys Brown, chair of the Pennsylvania Public Utility Commission; and former PUC Commissioner Robert Powelson, who was recently named to FERC.