AUDUBON, PA — PJM Interconnection members backed a governance-reform package Wednesday as the regional grid operator faces federal pressure to overhaul how it makes decisions affecting electricity markets and reliability across its 13-state territory and the District of Columbia.
The Sept. 30 vote advanced an amended proposal developed by PJM members following a Federal Energy Regulatory Commission-led process examining the grid operator’s governance and stakeholder structure. PJM’s posted meeting records confirm that members considered competing proposals from PJM, its members and consumer advocates, with voting results posted Oct. 1.
The PJM Legislators’ Collaborative, a bipartisan coalition of state lawmakers, criticized the outcome, arguing that the member-backed package does not provide sufficient independence, state participation, transparency or accountability.
The dispute centers in part on the balance of authority among PJM’s board, its member companies and states. FERC opened its governance review amid concerns about whether PJM’s existing structure can respond quickly enough to operational and market challenges as electricity demand increases.
FERC specifically identified potential reforms involving PJM board independence, allocation of federal filing rights, more timely and transparent stakeholder decision-making and “meaningful and structured participation” by state entities. The commission launched a facilitated dispute-resolution process Sept. 1 to develop potential changes.
The legislators objected in particular to provisions affecting the state “jump ball” process for resource adequacy, contending that the member proposal gives the Members Committee an additional veto over state-backed action.
“Today was PJM’s opportunity to show that it heard Chairwoman Swett’s warning,” Pennsylvania state Rep. Danielle Friel Otten said on behalf of the collaborative. “Instead, Members responded to a directive to strengthen PJM’s independence and reduce barriers to decisive action by voting themselves veto power over the very decisions at issue.”
The collaborative entered the reform process seeking a formal public-interest mandate, a governance role for states that includes legislators as well as governors and regulators, state participation in nominating PJM board members, changes to stakeholder voting rules and greater transparency.
Maryland state Sen. Katie Fry Hester said states need a greater role because PJM decisions influence electricity costs, reliability and states’ ability to carry out their own energy policies.
The lawmakers said the consumer-advocate proposal considered by PJM came closer to their preferred framework, including its treatment of the state resource-adequacy process.
PJM’s governance debate has drawn federal scrutiny following FERC’s July technical conference. The commission subsequently sought public comments and directed its Dispute Resolution Service to facilitate negotiations over concrete reforms.
PJM serves about 67 million people, and decisions made through its markets and planning processes can affect electricity generators, utilities, consumers and state energy policies across the region.
The legislators said they plan to continue working with FERC, PJM, governors, state utility regulators, consumer advocates and other stakeholders as the governance process moves forward.
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