By Christen Smith

Andy Ott said Monday he will step down as PJM’s president and CEO next month, marking the second top executive to exit the organization this year.

Ott announced his retirement effective June 30 after more than two decades at the RTO, during which time he held several leadership positions, helped launch the wholesale energy market and navigated the fallout of the GreenHat Energy default — the latter of which he described as one of his greatest challenges.

“It has been a great privilege to serve as CEO and lead an incredibly talented group of professionals,” he said in a press release. “I am grateful to have worked with such a talented group of people throughout my career at PJM, and I know PJM will continue to move ahead with solid values and integrity.”

Ott will remain an adviser to the RTO’s Board of Managers through Dec. 31 to ensure a “smooth transition,” he said. Board member Susan J. Riley will serve as interim CEO beginning July 1.

After GreenHat

Ott said during his keynote address at PJM’s annual meeting last month that the ongoing fallout from the GreenHat default loomed large and that he is working hard to implement staffing and procedural changes recommended as part of an independent probe into the situation. (See ‘Naïve’ PJM Underestimated GreenHat Risks.)

Ott’s retirement comes two months after Suzanne Daugherty, the RTO’s longtime CFO, stepped down amid deepening criticism of the way PJM handled the default. Susan Buehler, PJM’s spokesperson, said the search for both positions remains “well underway,” despite Ott’s departure. She did not say the default contributed to his decision.

“He reached retirement age about a year ago,” she said. “I believe he thought this was the right time for him.”

At the Market Implementation Committee meeting on Feb. 6, Daugherty told members a FERC order to rerun the July 2018 FTR auction to liquidate GreenHat’s positions could add $250 million to $300 million to the $186 million the RTO had earlier projected the default would cost members. (See PJM Won’t Act on FTR Order Before Stay Ruling.)

The independent review released in March further blamed the RTO’s leadership for ignoring red flags about the company’s assets and exhortations from other members about the portfolio’s financial shortcomings — a failure of protocol Ott said “needs to change.”

“PJM needs to get better,” Ott previously told RTO Insider. “Quite frankly, we’re just not used to this type of behavior from a market participant.”

Stakeholders approved creation of a Financial Risk Senior Management Task Force in April to consider changes to PJM’s credit and risk management requirements, market rules, membership qualifications and the stakeholder process in response to the identified structural flaws in its financial transmission rights market. (See Stakeholders OK Risk Management Task Force.)

As recently as last week, however, some stakeholders felt PJM wasn’t doing everything it could to prevent the situation from happening again.

The Organization of PJM States Inc. (OPSI) said in a May 24 letter to the board that the RTO appears to have brushed off the probe’s recommendation to conduct a general market review “to evaluate the risks and rewards of potential structural reforms.”

“Neither the discussions in the Financial Risk Mitigation Senior Task Force nor PJM’s observations report indicates PJM is even considering such a general review, informed by expert help, of the FTR market,” said Michael Richard, OPSI president. “OPSI urges PJM to seize that opportunity, avail itself of outside expert help and conduct the general review of the FTR market recommended by the independent consultant report.”

Fresh Perspective

During Thursday’s Markets and Reliability Committee meeting, Ott said that both internal and external candidates will be considered for his replacement — though chatter among stakeholders suggests the latter is preferred.

“This is not a direction change; it’s just a CEO change,” Ott said. “We will stay true to our mission.”

Stakeholders expressed a desire for change and improvement — not continuity — especially when it comes to the cultural issues raised in the GreenHat report. PJM should find a leader with rock solid management skills that can be by supplemented a strong technical team who will guide the organization through the anticipated challenges of the next few years, members said. Others said it’s less important for PJM to ingratiate itself to the industry than it is to regain the confidence and trust of stakeholders.

Ed Tatum, vice president of transmission at American Municipal Power, wished Ott well and expressed appreciation for his hard work, describing the change in leadership as “significant.”

“PJM is very important to AMP, and we stand ready to work with the new leadership to navigate the many complex issues before us primarily through the stakeholder process, which has been and can continue to be the cornerstone to PJM’s success,” he said. “The PJM stakeholder process has worked well when there are incentives for all parties involved to collaborate to develop effective and balanced solutions. AMP looks forward to engaging in the process and to the insights and fresh perspectives that the new leadership team may bring.”

Leadership Shake-up

Ott’s departure came with a windfall of executive promotions for many of the RTO’s key leaders.

“We’re ensuring the structure of the company reinforces our commitment to reliable operations, fair and efficient wholesale markets and infrastructure planning,” Ott said. “Each of these promotions helps ensure we continue to be an electric industry leader in areas that are critical for our members, stakeholders and the 65 million people in the region served by PJM.”

Mike Bryson will now serve as senior vice president of operations, be a company officer and report to the CEO. Bryson has worked for PJM since 1998 and managed such duties as 24/7 transmission operations for real-time systems, scheduling, transmission and generation dispatch, reliability coordination, training, and engineering analysis.

Stu Bresler will take on the title of senior vice president of markets and planning. Meanwhile, PJM’s existing vice president of system planning, Steve Herling, will transition to the role of executive consultant, where he will focus on strategic system planning projects.

“A 29-year veteran of PJM, Steve has been integral in developing a robust system planning process aimed at delivering a strong, reliable, economical grid, and we look forward to his continued leadership and contributions as he transitions to this new role,” Ott said.

Ken Seiler will transition from executive director to senior vice president of planning, where he will be responsible for the oversight of the System Planning Division, which includes transmission planning, interregional planning, interconnection analysis, interconnection projects, infrastructure coordination and resource adequacy planning.

Finally, Adam Keech will become the vice president of markets, where he will oversee all of PJM’s wholesale markets. Both Keech and Seiler will report to Bresler, PJM said.