PJM is under pressure to overhaul how it makes decisions. The harder question is whether the market can reform itself, and what meaningful change would require.

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The PJM Interconnection, the nation’s largest electricity market, is under growing pressure to reform the way it makes decisions. FERC’s push for change follows years of mounting concern over PJM’s ability to respond to challenges ranging from electricity supply and rising costs to rapidly growing data-center demand. Those concerns have now culminated in a broader question: whether the way PJM is governed is itself making the market’s problems harder to solve, and whether PJM can reform that system from within.

Seth Blumsack, director of the Center for Energy Law and Policy at Penn State University, explains how PJM makes decisions, why power is divided among its leadership, members and other stakeholders, and where that system can break down. He discusses the relatively limited role of states and consumers, how PJM compares with other regional electricity markets, and how much of its current predicament can really be blamed on governance.

Blumsack also looks at FERC’s unusual effort to broker governance reform through mediation, the changes now being considered, and what may happen if PJM and its stakeholders cannot agree on a path forward.

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Data Center Regulation (Or Not) in Pennsylvania: Part 1 https://kleinmanenergy.upenn.edu/commentary/blog/data-center-regulation-or-not-in-pennsylvania-part-1/ 

Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.