PJM may be ‘too big to function’: FERC Chairman Swett
Utility Dive • • business
Key Points:
- FERC Chairman Laura Swett criticized PJM Interconnection as being "too big to function" with an "unacceptable" governance structure, highlighting a serious legitimacy crisis due to eroded confidence in its decision-making.
- PJM, the largest U.S. grid operator, is under pressure to rapidly add generation capacity to meet rising demand from data centers, but its recent capacity auction failed to meet reserve margin targets.
- Swett emphasized the complexity of managing PJM's diverse footprint, which spans 13 states and D.C. with varying regulatory systems, and called for urgent, decisive leadership to maintain fair, efficient markets and grid reliability.
- FERC plans a July 23 conference to address PJM's governance flaws, aiming for actionable reforms, while PJM and industry groups acknowledged the need for improvements but differed on the extent of the problems.
- Experts warn that governance reform must avoid empowering entrenched interests and note that fixing governance alone may not resolve all of PJM’s current challenges.