The FERC Conference and Proposed PJM Reforms
DOE officials are calling for
reforms that add more independence and more transparency for the PJM
Interconnection. Rising power demand associated with data centers is driving
the call for reforms. PJM’s system is the largest in the country, covers 67
million Americans, and has the world’s biggest concentration of data centers.
It has been beset by reliability and blackout worries and rising power prices.
White House DOE officials,
state governments, and power industry executives recently convened at a
technical conference held by the FERC. One proposal would give PJM's board of
managers more independence from its voting members and require 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 has hundreds of members,
including transmission owners and power plant operators, who vote on market
rules, and the board approves changes in a multilayered process. DOE wants to
make that process more public. There is also a concern with board members who
serve three-year terms being ousted if they cast unpopular votes.
"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.
According to Reuters:
“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 also proposed some of
its own reforms. Lake, who chaired the Public Utility Commission of Texas
following a deadly and widespread grid failure in the state following 2021
Winter Storm Uri, sees PJM as being in a similar position to ERCOT before that
event occurred.
"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.
‘Grid-Enhancing Technology’ (GET): FERC Wants More GETs
Adoption
The FERC recently formed a
task force on grid-enhancing technologies (GETs) in order to support them, with
possible incentives on the table, FERC Chairman Laura Swett noted. Utilities
have begun using GETs, which can save money. These include dynamic line
ratings, advanced power flow controllers, and high-performance conductors.
According to Utility Dive’s Ethan Howland:
“The Federal Power Act bars FERC from requiring
utilities to use GETs, but the agency can direct transmission owners to analyze
them, which can show what the most economic option is when considering new
transmission infrastructure, according to Swett.”
Adding GETs is currently
affordable for utilities, but that may change in the future as prices for them
are expected to rise. Therefore, FERC wants to nudge them to do so now.
“We are optimistic that people will be able to coalesce
around identifying what should change in the market by the end of tomorrow and
the comments filed after, so that we can give clearer direction,” Swett said.
“Success to me looks like a PJM in the near future that
is able to propose solutions quickly, with some type of member support that is
clear, and to make those filings and excellent filings at FERC, so that we can
move expediently to have this market serve the country efficiently,” Swett said.
Some, like Senator Mike Lee,
R-Utah, called for more competition in transmission projects. He said that
despite its 15-year-old ‘Order 1000’ directing that competition, it has not
materialized enough. FERC commissioner Judy Chang noted:
“We should find additional efficiencies through
competition where it’s possible,” she said. “The backbone transmission system
is extremely important in integrating the large loads that we’re seeing and the
large generation that we’re adding to the system, and to bring down the cost to
all consumers requires competition.”
Swett noted FERC’s “show
cause” orders to major grid operators on how they integrate data centers and
other large loads to the grid. These were issued in June. One order requires
fast action on modernizing transmission services and interconnection study processes.
“This will save our consumers a lot of money, and with
our instructions, they are now … forced to consider advanced transmission
technologies in their study processes, and also to study load that may appear
near generation, which will reduce the amount of transmission build that is
necessary to get the load online,” Swett said.
FERC also wasn’t to see more
accountability in getting more generation built.
“FERC has no jurisdiction over generation, but because
we have directed each market to come back to us with reporting on what they
intend to do, how to handle this generation cliff that we are standing on as a
nation, that is forcing thought and hopefully action,” Swett said.
References:
Transparency
and independence of biggest US power grid in focus as FERC mulls major reforms.
Laila Kearney. Reuters. July 23, 2026. Transparency
and independence of biggest US power grid in focus as FERC mulls major reforms
FERC
eyes ‘grid-enhancing technology’ incentives: Chairman Swett. Ethan Howland.
Utility Dive. July 23, 2026. FERC
eyes ‘grid-enhancing technology’ incentives: Chairman Swett | Utility Dive
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