By Christen Smith

BALTIMORE — State officials from PJM’s western and southern borders last week expressed concerns about their autonomy after resuming a long-standing debate about whether states should strengthen their collective role within the RTO.

Panelists at the Organization of PJM States, Inc.’s annual meeting gave varying accounts of how the RTO’s structure benefits them, with many regulators in the west and south vocalizing concerns about the future of PJM’s markets and its impacts on their ratepayers.

“My fear is we are moving very far down a path where organizations like PJM are too big to fail,” said Charlotte Lane, chairman of the West Virginia Public Service Commission. “They are becoming unregulated fiefdoms.”

Lane said states should maintain control of their resources, particularly given the potentially skewed impacts of policies on carbon pricing and other market rules PJM will attempt to accommodate in the coming years. She also described “the constant bickering over market rules that are thinly-veiled attacks on some types of generation over others” as one of the more disturbing elements of RTO involvement.

“I believe states must remain in control of their resources. That is and should remain our individual right,” she said. “Though we are diverse in our views, I believe OPSI states have a mutual interest in maintaining that individual control.”

Charlotte Mitchell, chair of the North Carolina Utilities Commission, said she’s concerned about potential “erosion” of jurisdiction and characterized her impression of PJM’s relationship with states as “adversarial.” Dominion Energy serves 125,000 customers in the northeastern corner of North Carolina, the only area of the state within PJM’s footprint.

“We certainly want to maintain our authority over the resource planning Dominion undertakes, but we will look to PJM to continue to provide adequate, affordable and reliable service,” Mitchell said.

Kentucky, too, grapples with its autonomy in an RTO that’s racing toward clean energy at breakneck pace, said state Secretary of Environment and Energy Charles Snavely on an OPSI panel about carbon pricing. He said Kentucky won’t shutter coal plants early just to appease renewable energy targets in the east and contended the state will leave PJM to protect its economy from increasing electricity rates, if forced to. (See Enviro Officials Talk Carbon, Consequences at OPSI.)

“It is our opinion that PJM is enabling the policies of certain states at the expense of others,” he said. “We will reconsider our participation in PJM just out of necessity. It appears to me a lot of this is a competitive move by some of our members to further their economic interests, and Kentucky will further our own interests too.”

‘A Tool, Not an Outcome’

Marji Philips, of LS Power, challenged the panelists on their criticisms of PJM’s structure, noting it’s produced an “enormous amount of efficiencies” that benefit their ratepayers.

“PJM is a tool, not an outcome,” she said. “You all want to take back control of your resources but lean on the [power] pool when you can’t do it. When you take it all back, they [PJM] can’t do their job.”

The sentiments speak to a larger debate about whether PJM states should pursue a more involved governance role. Unlike states in other RTOs, OPSI members can’t assist in choosing the RTO’s board members, vote on proposed market rules or file alternative plans at FERC. A report authored by former state commissioners turned clean energy consultants called “Making Markets Work for PJM States” suggested changing those rules — as well as giving states the power to set their own capacity reserve targets or adopting a fixed resource requirement option — could prove beneficial.

OPSI itself takes no position on the report and said it was only used to stimulate discussion for the governance panel at its annual meeting last month.

“At such time that OPSI develops a position or wishes to recommend changes to PJM, those thoughts will be communicated to PJM in writing with an indication of the degree of support within the organization for the proposal,” OPSI Executive Director Gregory Carmean told RTO Insider in an email on Tuesday.

However, building upon the existing benefits of participating in an RTO mattered most for some panelists — like Michigan Public Service Commissioner Tremaine Phillips, who said a recent polar vortex and several corresponding electrical emergencies underscored the value of PJM in times of need.

But the cold weather snap across the Midwest in late January and early February also pointed to deficiencies in Michigan’s import capacity and its visibility of distributed energy resources in PJM, he said.

“It’s more an issue of with these low-probability, high-impact events and the probability of these events given the capacity and generation mix,” he said. “Those are real situations we have to continuously look into and evaluate. When those instances occur, we have to rely on our neighbors for assistance. Those issues have to be discussed RTO-wide to ensure those resources are available when we need them.”

Judith Jagdmann, chairman of the Virginia State Corporation Commission, said PJM has done a good job of providing reliability at a low cost and it’s up to states to make sure their participation continues providing value to its ratepayers.

“What I see … is that each PJM member is going to have to decide what is enough of a win for you to stay in PJM,” she said. “We can’t all have everything we want.”