🔬 FERC is about to put PJM under the microscope. The agency is inviting the experts to poke holes in the grid operator’s decision-making processes. Why?
In case you didn’t know: “PJM is really struggling to get stuff done,” Abe Silverman, a research scholar at Johns Hopkins University’s Ralph O’Connor Sustainable Energy Institute, told us.
Exhibit A: PJM’s years-long effort to unclog its interconnection queue. Exhibit B: Its skyrocketing capacity prices (and ongoing capacity shortfalls). This begs the question: How much of this struggle stems from PJM’s governing structure?Â
If you ask state officials and consumer advocates…a lot. Many think PJM gives too much power to industry members like utilities and generators—and doesn’t see energy affordability as its primary responsibility. As the grid operator kicks off market reforms, this tension is clearer than ever. “If you end up with a system where state [officials] feel like they’re not being listened to, then there’s a real potential the whole organization falls apart,” Silverman told us.
This disconnect comes with a major cost. PJM’s market signals lose credibility without the support of the region’s political forces, he noted, which can worry investors on the supply and demand sides.Â
Tying it all together: Tomorrow’s conference will dig into ways “to restore confidence” in PJM, Silverman explained. Some ideas to accomplish that:
Create a state committee to “foster PJM alignment with state policy/economic development perspective,” as suggested by former FERC Chair Pat Wood
Give states filing rights, like SPP does
Offer states and ratepayer advocates input on PJM’s Board of Managers
The takeaway, according to Silverman: “A house divided against itself cannot stand.” ⚔️