PJM President and CEO Manu Asthana reflected on the accomplishments of 2020, as well as the challenges of the year ahead, during his keynote address on May 3 to kick off PJM’s 2021 Annual Meeting.
During a remarkable year marked by the coronavirus pandemic and associated adversity, PJM and its stakeholders fulfilled the grid operator’s central mission of reliably delivering electricity at the lowest reasonable cost for the 65 million consumers in PJM’s footprint, he said.
Working under unprecedented conditions, with 90% of PJM staff working remotely, PJM and its stakeholders showed resilience, making significant strides toward the needs of a cleaner, smarter grid, he said.
“I am proud of our industry. I am proud that resilience came out on top of adversity. I am proud of the lessons we learned together over this past year,” Asthana said. “They will stand us in excellent stead as we move forward together.”
Asthana focused on five key areas in the last year:
- Adversity presented on several fronts, from the pandemic to social unrest
- Resilience of the PJM system and its response to that adversity
- PJM’s critical purpose of providing reliable electricity at reasonable cost
- Transformation in the way power is and will be produced and delivered
- People who have helped fulfill PJM’s mission under difficult conditions
The pandemic continues to profoundly impact many people personally, financially and emotionally, some more so than others, he noted. Social justice issues also dominated 2020, and within PJM, the Executive Team responded with a renewed commitment to diversity, equity and inclusion. These conversations are not easy, but important, Asthana said, and PJM remains committed to having them.
These challenges present a “difficult environment” that frames PJM’s plans for return to work on campus later this year.
“The thing I wanted to say here is that the reliability of the electricity we deliver obviously matters, but the cost matters a lot. It matters a lot to people struggling to put food on the table in our footprint. That thought is with me as I go into this new year,” Asthana said. “I am very proud of the way PJM and our stakeholders have responded to the challenge of 2020.”
Examples of resilience are reflected, he added, in the sacrifice of PJM operators who experienced two rounds of sequestration, including those who resided in campus quarters for up to 10 weeks. PJM built a third control room, moved more than 400 stakeholder meetings online, and successfully ran operations, markets and planning.
Recent power outages in his home state of Texas reaffirmed the important purpose that PJM and other regional transmission organizations serve.
“It is very clear that modern society has zero tolerance for prolonged interruptions to electric service,” he said, and extended periods of extreme prices during emergencies are not acceptable, either. “What we saw in Texas is not something that I want to see happen here.”
PJM’s grid is generally hardened for colder temperatures, with a robust transmission system, strong generation reserves, a diverse fuel mix, and performance incentives, all of which contribute to reliability, he said. And being part of the Eastern Interconnection contributes to PJM’s ability to maintain a resilient system, Asthana said. During the extreme weather in parts of the country around the Presidents Day holiday in February, PJM was able to keep power flowing to its 13 states and the District of Columbia, while exporting record amounts of electricity to surrounding systems, much as those same neighbors exported power to PJM during the 2014 Polar Vortex.
Last year was also a year of transformation, he said, noting an industry in the midst of significant change driven by government policies, consumer preferences and technology.
These trends manifest themselves in PJM’s interconnection queue, where wind, solar and storage dominate. PJM and stakeholders have started work on the redesign of the Minimum Offer Price Rule in the capacity market; reforming the interconnection process; working with stakeholders to comply with Federal Energy Regulatory Commission Order 2222 to better integrate distributed energy resources into PJM markets; and groundbreaking transmission studies to advance the offshore wind goals of New Jersey and other coastal states.
Transformation of the grid also fuels the PJM community’s work on the Effective Load Carrying Capacity construct to better value renewable resources in energy markets, and also reforms to PJM’s credit rules, including “know your customer” and other rules implemented in 2020.
“I expect the rate of transformation will accelerate from here,” Asthana said. “At PJM, we see our role as facilitating this transformation in a manner that supports policymakers, in a manner that supports reliability and in a manner that supports cost efficiency.”
Finally, Asthana reflected on PJM’s people. Going to remote work with his PJM team after just 10 weeks on the job in early 2020, Asthana commended staff for their dedication and commitment resulting in a successful year.
As he looked to the future, Asthana also acknowledged the longtime and significant contributions of departing PJM Board of Managers members Ake Almgren, Ph.D. and John McNeely “Neel” Foster.
Both have served PJM for nearly two decades. As chair of the PJM Board of Managers Risk & Audit Committee, Foster has been a champion for transparent, credible, reliable and neutral markets that deliver resources at least cost, Asthana said. As Almgren departs his position as chair of the PJM Board of Managers, which he has held since 2018, Asthana thanked him for his support, wisdom, guidance and for extending his Board service for an extra year to ensure PJM’s successful leadership transition.
“There is a lot of exciting work to do collectively to help chart a course through the ongoing energy transition, he said. “I believe the PJM community is second to none, and it is a source of great strength for us. The best way to get to a thoughtful, durable solution is working with our stakeholders collectively to try and figure out a path.”
Watch: PJM Honors Ake Almgren
PJM pays tribute to Ake Almgren, outgoing PJM Board chair, honoring him for his 20 years of service.