CAMBRIDGE, Md. — Keeping the lights on, planning for the future and facilitating efficient electricity trading will continue to be PJM’s core mission, CEO Andy Ott told members in reviewing his first year at the helm of the RTO.

But PJM needs to be positioned for changes, he said, like the ones that necessitated the move toward Capacity Performance — legacy assets were becoming less reliable, and new gas generation didn’t have fuel security.

“We addressed that change abruptly. We need to avoid those kinds of abrupt changes in the future — abrupt change in the markets doesn’t help anybody,” he said. “Our goal … is to stabilize our rules to make sure we see these emerging trends coming.”

The industry is evolving rapidly, Ott noted, “not only the volume of change, but how quickly those changes are occurring.”

He pointed to changing load profiles and fuel mix, the Clean Power Plan, gas-electric coordination, renewable and distributed energy resources (DER) and cybersecurity.

“The key is to make sure that as we look forward, we strategically evaluate how those changes are going to affect our markets,” Ott said. “We can’t get caught by surprise. We need to make our systems more and more resilient.”

He also singled out some areas that he said need to evolve: the Regional Transmission Expansion Plan process; PJM markets, to accommodate gas-electric coordination and DER; and enhancing the value of the RTO’s services.

“I see a tremendous opportunity for us if we can find a way to harness the distributed energy resources that are inevitably coming onto the system,” he said. “It will make the grid more resilient and will result in lower cost and … less operational uncertainty.”

Ott said PJM also will be studying the value of fuel diversity from an operational perspective.

“Should we be looking at fuel diversity as an attribute? And under what circumstances would we do that?” he said.

The topic will be the subject of an upcoming report, he said.

Md. Energy Adviser Delivers Keynote

Mary Beth Tung delivered the keynote address at the final session of the PJM Annual Meeting last week, just two days after being appointed director of the Maryland Energy Administration by Gov. Larry Hogan.

Maryland, with 12,264 MW of capacity, is a net importer of energy, she told the group.

Coal and nuclear power supply more than four-fifths of the state’s generation; among the challenges the state faces is that nearly 66% of its coal-fired power plants are at risk of retirement. To address that loss, the state has a number of new natural gas-fired facilities scheduled to come online in the next few years.

A member of the Regional Greenhouse Gas Initiative, Maryland has a goal of reducing carbon emissions by 40% compared with 2006 levels by 2030, she said.

Maryland faces a unique hurdle in that its geography lends itself to air pollution, Tung said — 70% of pollution wafts in from surrounding states.

Still, she said, the state has been successful in reaching its energy goals.

In 2008, legislation imposed a requirement to reduce per capita electricity consumption by 15% from 2007 levels by 2015. It achieved 99% of that directive and plans to continue toward a 2% reduction in electric sales at a rate of 0.2% annually.

Board Members Elected; Standing Ovation for Lahey, Kinsey

Members unanimously elected Dean Oskvig and Mark Takahashi to the Board of Managers and re-elected Terry Blackwell to a new term. Blackwell was appointed last year to fill the term of William Mayben.

The new members take the place of Jean Kinsey, who served on the board 13 years, and Richard Lahey, who held his seat for 19. They received a standing ovation. (See Committee Recommends 2 Industry Vets for PJM Board.)

Oskvig recently retired as CEO of Black & Veatch. Takahashi is CFO of Ascendant Group.

Stakeholder Survey Indicates Member Satisfaction

A survey of stakeholders last year drew an 87% approval rating, compared with 90% in 2013.

PJM listed the key drivers of satisfaction as markets/reliability management, the stakeholder process, member support and corporate reputation.

Going forward, it plans to establish best practices for employees to assist members via email; increase the use of the Salesforce tool; and promote the knowledge base among members.

PJM also is creating a forum to discuss tool-related changes and information technology efforts that affect members, and offer more tool-specific training.

Members Endorse Revisions

The committee endorsed the following as part of the consent agenda:

• Revisions to Manual 34: PJM Stakeholder Process as a result of a periodic review. The changes update language and formatting for clarification and graphics for better readability.
• Changing the emergency energy default customer baseline (CBL) from the “hour before” methodology to the current default economic CBL. (See “Members Endorse New Way to Measure Emergency DR,” Market Implementation Committee Briefs.)
• Tariff and Operating Agreement updates incorporating business rules for dynamic transfers.

— Suzanne Herel