LANSDOWNE, Va. — The PJM Members Committee on May 13 voted against reconsidering whether to reelect Terry Blackwell to another term on the Board of Managers. (See PJM Stakeholders Vote Out 2 Board Members.)

The vote came the day after the committee voted against reelecting Blackwell and then-Chair Mark Takahashi to the board. Exelon brought the motion to reconsider immediately after, and the committee went into recess to allow members to prepare for another vote.

At the opening of the May 13 meeting, PJM CEO Manu Asthana told the MC that Takahashi had withdrawn his name from consideration.

“He has made significant contributions to the organization,” Asthana said. “Frankly, I am proud to have served with Mark.”

The motion to reconsider whether to elect Blackwell failed a simple majority vote with only 42.9% support. The committee did vote to suspend the rules and direct PJM to not produce a voting report on how each member and sector voted on the motion. The MC meetings were part of PJM’s Annual Meeting, which coincides with when board terms end, leaving two vacancies on the body.

Constellation Energy’s Adrien Ford said she was sorry Takahashi felt it necessary to resign and that she was further disappointed the committee didn’t reconsider Blackwell’s nomination. Now that there are two board vacancies, she asked if the Nominating Committee is prepared to fulfill the Operating Agreement requirement to bring candidates to the MC’s meeting scheduled for June 18.

Calpine’s David “Scarp” Scarpignato told RTO Insider the company supported reelecting Takahashi and Blackwell and is hopeful the board is moving in a direction to have more dialogue and transparency with membership. He noted that Manager David Mills told the MC on May 12 that an agenda item will be added to the committee’s monthly meetings for attending board members to speak with stakeholders and that they will stay overnight to allow for more conversation.

In an email, Exelon’s Alex Stern said, “Obviously, I am disappointed that the membership got to the point of thinking this message needed to be sent. I think Exelon’s focus remains on ensuring cost-effective reliable service to the 67 million customers in the PJM footprint and particularly the 10 million customers Exelon serves. I look forward to working with the remaining PJM board members as well as the membership to pursue new candidates that can help us ensure that paramount goal continues to be met.”

Speaking to the MC, PJM General Counsel Chris O’Hara said board members have resigned shortly before previous Annual Meetings, and the RTO has received waivers from FERC relieving it of the Operating Agreement’s requirement that a replacement be voted on at the following MC meeting. He said the prospect of the Nominating Committee finding two candidates for the board in little more than a month could prove challenging, but a FERC waiver would allow the MC to vote at a later meeting.

O’Hara said the Nominating Committee went through two rounds of discussions with candidates to replace retiring Manager Dean Oskvig before landing on Matt Nelson, principal of regulatory strategy at Apex Analytics. He received 90.8% support in the May 12 elections and was not voted on again the next day.

Returning to the same list of candidates considered by the Nominating Committee may not be appropriate, O’Hara said, as the expertise and attributes of the board members have changed with the members who have been lost. It’s also unclear if candidates who were not nominated by the seat taken by Nelson still would want a position on the board.

Paul Sotkiewicz, president of E-Cubed Policy Associates, told RTO Insider he disagrees with other stakeholders who said the board members up for reelection were caught up in dissatisfaction with the board as a whole. If other members who had been making more of an effort to improve communication and openness with stakeholders had been on the ballot, it could have been a different outcome, he said.

Both Takahashi and Blackwell were two of the four board members on the committee overseeing the search for a new CEO once Asthana leaves office at the end of this year, which Sotkiewicz said provides an opportunity to break a “cultural narcissism” in the RTO’s executive leadership. He said PJM needs a CEO with an understanding of the mission of RTOs, deep understanding of the power industry stemming from varied commercial expertise and the ability to communicate with stakeholders on an “honest and nonconfrontational basis.”

After Exelon made the motion to reconsider during the May 12 meeting, Asthana said PJM would respect the committee’s wish to not produce the results if it voted that way, but he noted the RTO has a policy of nonretaliation. Sotkiewicz said he took that as a “passive aggressive threat.”

“This was a referendum on Manu’s tenure, in my opinion,” Sotkiewicz said.

In an email, PJM spokesperson Jeff Shields said, “We have had productive discussions with our members over the past two days. It’s difficult to understand how saying that we have a policy of nonretaliation is somehow a threat of retaliation.”

Going forward, Sotkiewicz said the board’s priority should be to make more of an effort to listen to stakeholders. Board members should also show more curiosity and not simply accept what they are told by PJM staff, he said.

“That takes effort; that takes time; and frankly as a board member, it should be part of your damn job,” he said.

PJM Broaches Allegation of Nominating Confidentiality Breach

O’Hara also informed the MC there have been allegations that Nominating Committee members have made statements about its votes, which could violate its confidentiality rules.

The committee is chaired by board member Jeanine Johnson, who is joined by Mills and one representative from each of the five membership sectors.

Sotkiewicz said a serious accusation had been made without evidence, adding to the churn and angst of the membership and candidates to be nominated to the board. He pushed back against arguments that the Nominating Committee’s membership should be reconstituted, saying the sitting members already are steeped in the list of candidates.

O’Hara said he had no firsthand knowledge of the claims and that moving forward, there must be the utmost integrity in the business of the Nominating Committee.

Shell Energy’s Sean Chang, who was elected to the Nominating Committee on June 27, 2024, said any additional information PJM has about the allegation should be shared with the membership.

Constellation’s Ford said if there has been a breach of Nominating Committee confidentiality, it could call into question whether the current committee is up to the task of selecting two new board members.

Exelon’s Stern also argued that given the change in circumstances, sectors should have the opportunity to select new representatives.

“Given that this nominating process is going to have to start fresh and with different criteria for consideration of candidates, each sector should have the right to determine for itself next steps and who it wishes to serve as the nominating starts fresh,” he said. “Unlike the one prior instance referenced by PJM, in this instance we are not dealing with one board member who resigned just prior to the Annual Meeting. We are dealing with two board members recommended by the Nominating Committee in the completed annual cycle that were not reelected by the membership.”

Vistra’s Erik Heinle said there should be a pause in the search process, and the sectors should have an opportunity to reconsider the representatives they have and how the Nominating Committee should move forward.

Gregory Poulos, executive director of the Consumer Advocates of the PJM States, said he’s concerned about the precedent that could be set by reorganizing the committee. He said the Nominating Committee already is established and if it is proceeding with a job that it is capable of fulfilling, it should be allowed to continue.