By Christen Smith

PJM on Monday announced the selection of its first chief risk officer — the official who will oversee the RTO’s credit policies in the wake of the GreenHat Energy default.

Nigeria Poole Bloczynski will join PJM on July 29 after serving as director of commodity and corporate risk management for WGL Holdings, the parent company of Washington Gas, WGL Energy, WGL Midstream and Hampshire Gas. She brings more than two decades of experience in commodity and risk management from both the financial and energy markets and currently serves on the board of directors for the Committee of Chief Risk Officers.

Interim CEO Susan J. Riley said Bloczynski “brings a depth of knowledge and experience in this important area that I am confident will serve our organization and stakeholders well.”

Bloczynski will supervise all aspects of PJM’s risk function, including credit and collateral policies, market surveillance, monitoring of market-participant behavior, and both qualitative and quantitative analytics. The Board of Managers’ Risk and Audit Committee will oversee Bloczynski in her new role, which the RTO said was a measure of its commitment to “further instill the importance of risk management throughout the organization.”

The announcement comes four months after an independent review of the internal factors that led to the GreenHat debacle characterized PJM management as “naive” and recommended bringing a CRO on board to fill a gap in the RTO’s management. (See Naive PJM Underestimated GreenHat Risks.)

In June 2018, GreenHat defaulted on 890 million MWh of financial transmission rights, leaving PJM members on the hook for at least $100 million in losses. FERC’s recent order to unwind five months of FTR settlements and liquidate GreenHat’s portfolio could cost stakeholders in excess of $430 million. Currently, the RTO and members are negotiating the next steps in the liquidation process before FERC commences a paper hearing on its previous order. (See FERC: PJM Settle Disputes Before GreenHat Hearing.)

The report faulted PJM staff for putting too much faith in verbal and written agreements with GreenHat guaranteeing the company held $100 million in assets and would receive a $62.2 million payout from two bilateral contracts.

“If PJM knew its customer better, PJM may have recognized these instances as red flags indicating the GreenHat pledge agreement may have actually been a sham before signing,” the report said. “These red flags may have helped PJM to conclude that GreenHat did not have an asset worth $62 million to pledge and assign.”

Bloczynski will be the first of several new leaders coming to PJM. Longtime CFO Suzanne Daugherty and CEO Andy Ott both tendered their resignations earlier this year, though neither said their decisions were related to the default. (See PJM CEO Andy Ott to Retire and PJM CFO Retiring in Wake of GreenHat Default.)