By Laila Kearney
NEW YORK, July 23 (Reuters) – U.S. energy officials pushed for more independence and transparency in PJM Interconnection on Thursday as regulators weigh reforms to the country’s largest power grid, which faces the growing risk of blackouts as data center demand soars while few new electricity supplies are added.
PJM, which covers 67 million Americans across the Mid-Atlantic and Midwest that includes the world’s biggest concentration of data centers, has struggled with power shortfalls and surging electricity prices since demand in the region began to accelerate roughly two years ago.
Officials with the White House, state governments and power industry executives convened at a technical conference held by the Federal Energy Regulatory Commission to discuss potential solutions to PJM’s supplies and pricing woes. Some of those proposals included giving the grid operator’s board of managers more independence from its voting members and requiring decisions by the board to be made public.
“We want the board to not be shrouded in mystery or secrecy. We want to know what’s going on and we want the responsibilities to be clearly outlined,” U.S. Deputy Secretary of Energy James Danly said at the conference.
PJM’s hundreds of members, including transmission owners and power plant operators, vote on market rules through a multi-layered process, with the board ultimately deciding whether to approve proposed changes. Critics say the board’s deliberations and voting lack transparency because they are generally conducted outside public view.
Participants in FERC’s conference also noted concerns that board members, who serve three-year terms, run the risk of being ousted if they take an opposing or unpopular stance among the membership.
“PJM needs an independent, transparent board that can take action and make tough decisions without fear of being fired after every board meeting,” said Peter Lake, senior director, power at the White House’s National Energy Dominance Council.
Proposed solutions to that retention dilemma included extending the terms of PJM board members. PJM’s new CEO David Mills, when asked by FERC commissioners for a reasonable new term period, suggested six to nine years, at which point the member would term out.
FERC commissioners also discussed the possibility of giving states, including governors, in PJM more decision-making power in the grid. While governors have political influence over PJM that includes capping power prices in the latest power auctions held by the grid operator, they do not have voting membership.
PJM has proposed its own series of reforms to get more power generation on the grid, connect data centers quickly and to avoid shortfalls.
Lake, who chaired the Public Utility Commission of Texas following a deadly and widespread grid failure in the state following 2021 Winter Storm Uri, said he sees warning signs in PJM similar to the run-up to the catastrophe four years ago and underscored the urgency of making reforms.
“The root cause of that failure was a failed governance structure and a failed stakeholder process, the same ills that harm PJM today,” he said.
(Reporting by Laila Kearney in New York; Editing by Aurora Ellis)
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