PJM’s stakeholder process and governance will be the topic of a July workshop announced by FERC Chair Laura V. Swett at the PJM General Session May 12.
Serving large loads quickly and affordably requires decisive action to serve national security interests and advance artificial intelligence and economic growth, Swett said.
“We are at a moment of profound consequence. Across the globe, other countries are racing to harness the power of artificial intelligence to sharpen their competitive edge across all economic sectors,” Swett said. “PJM and all of the companies that are represented in this room are the epicenter of that race. The United States cannot fail.”
The FERC workshop will explore solutions to structural and procedural governance issues standing in the way of progress, Swett added, noting PJM is celebrating a century of adapting grid reliability through societal change.
“The stakes for reliability, affordability and public confidence are too high to tolerate a system that stalls when the hard decisions arrive,” Swett said. “Put another way, the status quo is simply unacceptable and has been for some time in the stakeholder process.”
PJM issued a statement Tuesday welcoming the upcoming FERC workshop.
“PJM appreciates FERC Chair Swett’s interest in the PJM stakeholder process and the expectations for its success,” the statement said. “We look forward to participating in the upcoming technical conference and continuing our work to strengthen grid reliability, including advancing the Reliability Backstop auction efforts to bring new generation online as quickly as possible.”
Panels Explore Challenges
PJM President and CEO David Mills led two panel discussions about the pressing demands of large load growth; maintaining affordability; and adjusting grid operations, markets and system planning to maintain reliability for the 67 million people PJM serves in 13 states and Washington, D.C.
The first discussion, “PJM Fast Forward: What does industry success look like in 2035?” invited feedback from utility and energy suppliers as well as state policy and advocacy representatives. They were:
- Robert M. Blue, Chair, President and CEO of Dominion Energy
- Joseph Dominguez, President and CEO of Constellation
- Dylan Self, Head of Utilities for the Americas and Global Head of Sustainable Energy, Vitol
- Kelly Speakes-Backman, Director of the Maryland Energy Administration
- Evan Vaughn, Executive Director of MAREC Action
While PJM alone cannot solve all the issues the industry faces, Mills expressed faith that diverse industry players can collaborate and sometimes make difficult choices to maintain reliability and price stability.
“We all have a belief we can land this,” Mills said. Panelists’ discussion reflected the following themes:
- Long-term contracts will be essential in the future to provide price stability, not only for consumers, but for generation investors wary of future market interventions or rule changes. States can and should do more, they said, to encourage Load Serving Entities to plan for and secure resources to serve their regional load obligations, which hedge risk and protect retail customers from market volatility.
- PJM and stakeholders must advance long-debated market rule changes that appropriately compensate for the generation attributes required for more precise grid operations when managing peak load conditions, extreme weather or overall shrinking reserve margins. Otherwise, conservative operations commitments that have been necessary to preserve reliability in recent years will continue to unfairly suppress prices.
- Faster processes are required to speed generation resources to the grid. While PJM has made great strides in recent years to speed its own interconnection process, more can be done by other entities to ease permitting, siting and other barriers.
- Demand response will play a larger role to help shave peak load during system stress. At the same time, PJM Planning and Operations teams can also explore how to use system slack during off-peak times to manage operations more flexibly.
- PJM’s expertise and independence are indispensable to help lead through the fray of stakeholder debate. That, participants added, will require courage and clarity, especially in communicating about actions required for reliability by stakeholders outside PJM.
“Obviously, there is no shortage of challenges and no shortage of ideas or what we call on the Board ‘ruthless prioritization,’” Mills said. “There is what we need to do and what we can do, and we need to be clear with other people in our ecosphere of what we expect them to do.”
Panelists in the second session, “PJM Now: What actions should we be contemplating?” were:
- Dennis Deters, OPSI President, Commissioner, Public Utilities Commission of Ohio
- Nate Hanson, President, LS Power
- Kim Janas, CAPS President, Illinois Attorney General’s Office
- Carim Khouzami, EVP Transmission & Development, Exelon
- Josh Levi, President, Data Center Coalition
- Eran Mahrer, Chief Commercial Officer, Leeward Renewable Energy
- Kristen Senechal, President and CEO, Northern Virginia Electric Cooperative
“Now that we have an end state in mind, how are we going to get there?” Mills asked.
Common themes included:
- The role of states going forward will be critical, particularly regarding load forecasting, permitting and realizing that changing policies make it difficult for even permitted projects to move forward.
- Permitting, not PJM’s study process, has become the major challenge to generation coming online. In addition, more communities are resisting the building of any type of generation and transmission.
- Large loads need to know there is a clear path to firm service. Data centers support essential services, including medical records, 911 systems, credit card transactions and traffic light synchronizations. Taking them offline has consequences.
- Data centers are run by some of the most profitable companies in the world; they can afford to arrange for their own generation. The underlying customer base must be protected from subsidizing new large load needs for generation and transmission.
- Markets are not providing the price signals needed to build new generation. Interventions to the current construct, including the mandated price collar, give investors less confidence.
In closing the General Session, PJM Board Chair Paula Conboy urged swift action. “This is an opportunity, and to seize it, we are going to need collaboration and innovation in equal measure,” Conboy said. “Our Board is committed to this. We will partner with the states, with FERC and with all of you to make that happen.”