In a rather astonishing development, FERC Chair Laura Swett, in appraising PJM's current, apparent dysfunction, is "asking" if the nation's largest grid operator and organized power market may have become "too big to function." But perhaps, instead, is it too big to fail, and needs regulatory propping up? Ms. Swett has called for a FERC-led "technical conference" at the end of July to examine isssues (read as "problems") with PJM's governance, given that in her view, the operator faces “a serious legitimacy crisis" and confidence in its decision-making has "completely eroded."
At the same time, she said, as quoted in Utility Dive, "FERC expects PJM to run power markets that are fair and efficient, and maintain reliability through extreme weather, shifting fuel mixes and rapid technological change" Swett added, “If this can’t be landed given PJM’s huge and diverse footprint, perhaps it simply has grown too big to function.”
Well, ok, but that's table stakes for any grid operator. It's gotta be in its "charter," "The Amended and Restated Operating Agreement of PJM Interconnection, L.L.C.", and expressed in The Bylaws of PJM Interconnection LLC.
As reported by Utility Dive, “Kent Chandler, a senior fellow at the R Street Institute, a public policy think tank based in Washington, D.C., and former member of the Kentucky Public Service Commission, said governance is “broken” in PJM, but he cautioned that FERC must be careful that entrenched interests are not allowed to further expand their control…‘I’ll be interested to hear more from the chairman about what she hopes to accomplish with the technical conference and beyond, including why, of all the conversations that need to be had (like load forecasting, generation interconnection, capacity and energy market efficiency, large load interconnection, local transmission spend, etc.) prioritizing governance is at the top of the list, he said.”
The flaw in Mr. Chandler’s thinking is that PJM’s “governance” is precisely what determines PJM’s priorities in fixing what may seem like “technical” issues, but are at the heart of PJM’s current, flailing incoherence: insufficient generation; a seeming inability to fix its interconnection queue (and which now is ostensibly but unrealistically “admitting” more new resources than the grid operator’s entire current capacity); allowing fossil generation to retire without replacement; massive swings in capacity prices; and, overall. clearly grasping at straws with flawed proposals to deal with crushing data center loads.
I've written about PJM's recent dysfunction--after years of solid leadership among the nation's RSOs/ITOs. While 6 months old, this piece captures the myriad of problems PJM faces, most of them unforced errors created by PJM Itself: