Manu Asthana was 17 when he arrived in Philadelphia as an undergraduate at the University of Pennsylvania’s Wharton School in 1991. Born in India, he had grown up in the Middle East, where his parents moved for work. The U.S., he said, was “quite a culture shock.”

Nearly 25 years after his graduation, Asthana returned to the Philadelphia area as CEO of PJM.

“It was quite an interesting completion of the circle for me,” Asthana, who joined the RTO in January, told the Raab Associates Energy Policy Roundtable in the PJM Footprint via webinar Tuesday.

He returned, no longer a wide-eyed teenager, but an experienced energy executive looking for a new challenge.

After only four months on the job, he’s already had several: Responding to FERC’s controversial expansion of PJM’s minimum offer price rule (MOPR), winning stakeholder approval of tougher credit requirements in its markets and — unexpectedly — figuring out how to prevent the coronavirus pandemic from disrupting PJM’s 24/7 operations.

“It has been humbling to be reminded that we don’t get to write the script,” he smiled.

Chicago and Houston

Asthana graduated Wharton with concentrations in finance and entrepreneurial management. After learning to trade Treasury bond options at the Chicago Board of Trade for Swiss Bank Corp., he moved to Texas in 1997 to work for a company that was acquired by TXU Energy.

He held a number of roles in his 12 years at TXU, including chief risk officer. “When I left the company, I was running their trading business, running their commercial market operations and asset management … all of the commitment, dispatch and economic analysis and market-related decision-making around what was at that time one of the largest fleets of generators in the state of Texas.”

Asthana remained with TXU for about two years after it was taken private in 2007 — in what was the biggest leveraged buyout in history — but grew restless. “I had done everything I came there to do; learned everything I came there to learn. It was time to leave.”

He joined Direct Energy in 2010 and began “running their trading business, then took on their power generation operation.” After the company sold its power plants, he was “tasked with turning around the performance of” Direct’s retail energy business. Two years later, he “was tasked with also turning around the performance of the home services business.”

He resigned as president of Direct Energy Home in December 2018 after almost nine years. “I had gotten to the same point I did with TXU, where I accomplished more or less everything I came to do,” he explained.

Asthana previously told RTO Insider that he continued working with Direct through April to “ensure a successful leadership transition” and spent much of the rest of the year doing charity work before being tapped by PJM.

Direct, like some other retail electricity suppliers, has had a series of well-publicized regulatory scrapes. “I’m very proud that my team’s efforts to continuously improve in these areas led to customer complaints falling by two-thirds during my tenure,” he told RTO Insider after his hiring was announced in November. (See New PJM CEO Defends Direct Energy Stewardship.)

After his Texas experience at TXU and Direct, Asthana said, he was looking “to do something that had an impact beyond just the organization that I worked for. I wanted to have a broader impact. And I thought that PJM was uniquely positioned in the energy transformation that’s happening.”

3 Priorities

Asthana said he came to PJM with three priorities. The most important: ensuring the grid’s reliability.

He also places a premium on personnel development. “I believe strongly that leaders grow people,” he said.

His other priority is working with PJM’s stakeholders — “including, very importantly, our states” — “to solve difficult problems and try to get our markets to a stable place where they can continue to deliver the efficiencies and the reliability that is required.”

“A lot of people tell me, ‘Hey, can you find a way to make the stakeholder process more efficient, more effective, to get things done through the process?’” he said. “I’d like to reframe for all of us our stakeholder process. I don’t see it as a problem to be navigated. I see it as a significant strength of the organization.

“We have tremendous capabilities, tremendous passion to do the right thing and to get the market structure right and to get the rules right for the long term. I think there is disagreement on what the right actions are depending on what the topic of discussion is. But the diversity of thought and the amount of passion and energy that our stakeholders bring to our process I think is a significant asset for PJM.”

Moderator Jonathan Raab — who helped facilitate the creation of PJM’s current Consensus-Based Issues Resolution (CBIR) process a decade ago — asked Asthana if he thought additional changes were needed in stakeholder rules.

The stakeholder process works well for many routine issues, but it has shown an inability to reach consensus on major contentious issues, according to a May 2017 study by Christina Simeone, director of policy and external affairs for the Kleinman Center for Energy Policy at the University of Pennsylvania. Simeone said some of the problems are the result of compromises made under the Governance Assessment Special Team (GAST) process that led to CBIR. (See Can RTO Stakeholders Find Consensus on Big Issues?)

“I’m hearing a range of things,” Asthana said. “Some people are satisfied; some people are not satisfied” with the effectiveness and efficiency of the process.

“I think since I’ve been here, I do think that the process … our stakeholders together are very capable of solving difficult problems. And I think we are starting to do that.”

As an example, he pointed to the approval in March of tougher credit rules, which cleared the Markets and Reliability Committee with a 90% sector-weighted vote. (See PJM Members OK Tighter Credit Rules.)

Finding the Balance on MOPR

Such consensus was not possible, he acknowledged, on one of the first issues he had to consider after starting work in January: PJM’s response to FERC’s December order expanding the MOPR to new state-subsidized resources.

Asthana said PJM’s Jan. 21 rehearing request and March 18 compliance filing sought to support states’ rights to choose their generation mix while also recognizing the reliance resource providers and investors have on a “stable, predictable” capacity market (EL16-49, ER18-1314, EL18-178).

The RTO held 10 meetings with stakeholders to gain feedback on how it should proceed.

“One of the points of feedback I had coming in the door was, ‘Hey, it would be really nice if PJM were to listen more,’” he said.

He noted the “very, very, disparate sets of inputs” on issues such as the timing of the first auction under the new rules and the flexibility that should be afforded individual units.

“I’m sure there are … a number of opinions on how we did, but I really hope that our stakeholders feel that they were listened to and that their thoughts were reasonably considered, and we took a balanced approach.”

The wind and solar industry trade groups said they were relieved that PJM’s interpretation of the order would allow new renewable generation to clear the capacity market in the short term. PJM’s conclusion that voluntary renewable energy credits are not state subsidies and its decision to allow an asset life of up to 35 years means that new wind and solar projects will be able to bid below the default MOPR floor values and clear the market, officials for the organizations said. (See MOPR May Not be Death Knell for Renewables in PJM.)

Maryland Public Service Commission Chair Jason Stanek, who spoke later in the forum Tuesday, said he was grateful for PJM’s efforts, although he would have liked more time to plan for the next Base Residual Auction. (PJM said it will hold the next auction within six-and-a-half months after the commission’s acceptance of the compliance filing.) “Under the circumstances … I don’t believe PJM could have done a better job in balancing the interests of a very disparate group of parties,” he said.

2035 and Beyond

The MOPR battle, Asthana said, has “unfortunately overtaken the discussion” on how the RTO can help the states plan for the future. He said he has asked his staff to envision what market rules and transmission planning will be needed in 2035 and beyond if states achieve their decarbonization targets, including large offshore wind projects planned off of Virginia, Delaware and New Jersey.

“I think PJM can play a large role in helping think through the most efficient way to plan the transmission grid to facilitate that offshore wind,” he said. “I think it’s very inefficient if we try to plan one project at a time or even one state at a time.”