By Suzanne Herel

Incoming PJM President and CEO Andy Ott said Wednesday that the biggest issues facing the RTO are a “substantial swap” in fuel from coal to natural gas, increasing gas-electric coordination and the rise of distributed energy.

“We have an industry in transition,” Ott said. “We’re seeing a tremendous amount of coal resources retiring.”

Managing that evolution, he said, will be a major focus when he assumes the top spot this fall, as Terry Boston steps into a coaching role and retires on Dec. 31 after eight years running the RTO. (See PJM CEO Boston to Retire.)

Boston concurred: “We have seen the largest and fastest fuel change in the history of the world,” he said. “It took a lot longer to go from wood to coal than to go from coal to natural gas.”

Ott, an 18-year PJM veteran who currently holds the role of executive vice president of markets, was named Boston’s successor Wednesday. They spoke in an afternoon press conference.

Cost Allocation Challenges

The changing industry poses another challenge, Ott said: cost allocation of new transmission projects and operational changes.

“As we look at some of the impacts of those changes on the power system operation, one of the things we saw with the polar vortex, for example, was a very big, big shift in the cost or the price of reserves — we call it market uplift. One of the challenges the stakeholders face is dealing with some of these very difficult issues of cost allocation brought on by these changes.” (See FERC OKs $1,800 Offer Cap in PJM.)

The issue likely will be addressed in market rules and Tariff provisions, he said.

Boston also identified demand response as an industry concern waiting to be resolved by the Supreme Court. (See FERC Files EPSA DR Appeal with Supreme Court.)

“One of the challenges Andy may have is if the DR goes from wholesale market to retail control, how do we involve the 14 public service commissions’ stake in planning  what DR will be in the future?”

Ott was thought to be one of two likely in-house candidates. Both he and Executive Vice President for Operations Mike Kormos frequently represent PJM before the Federal Energy Regulatory Commission and in industry forums.

“Andy is recognized internationally as a power industry leader and expert,” said PJM Board Chairman Howard Schneider. “The board and I are confident that Andy will ensure the continued collaboration, trust and exceptional performance for which PJM is known and that he shares our commitment to reliable grid operations, fair and efficient wholesale markets and robust transmission planning.”

Core Mission Unchanged

Said Ott: “I can assure everyone that our core mission will be unchanged and that we will maintain open communications and the collaborative, productive relationships with members and stakeholders which are crucial to PJM’s success.

“One of the strengths that Terry has fostered here at PJM is our industry leadership and our collaboration with stakeholders and states and FERC. I will promote that type of collaboration and continue it as we move forward.” (See Retiring PJM CEO Boston Lauded for Efficiency Improvements, Management Style.)

Ott called PJM an industry leader in innovating technical systems and a competitive market environment. “We will continue to lead there,” he said.

Boston said the men would make a decision sometime in the early fall as to when Ott officially will take the helm, but it likely will be in October or November.

“Andy has a lot of roadwork to do with all the commissioners and the CEOs of the major companies we serve,” Boston said.

Asked to look back on the highlights of his tenure, Boston noted the replacement of about 26,000 MW of coal for natural gas, experiencing three “one-in-100-year” weather events and advancing billions of dollars in projects to storm-harden the grid.

Ott has extensive experience in energy market restructuring. Prior to joining PJM, he worked for GPU Inc. in transmission planning and operations.

Currently, he provides executive oversight of the PJM Market Operations, Market Strategy, Member Training, State Relations, Customer Relations and Performance Compliance divisions. He was responsible for implementing the PJM wholesale electricity markets.

He is a board member of both PJM Technologies and PJM Environmental Information Services. He also serves on the board of directors of the Association of Power Exchanges and chairs the CIGRE (International Council on Large Electric Systems) Study Committee C5 on Electricity Markets and Regulation.

He received his bachelor’s in electrical engineering from Pennsylvania State University and his master’s in applied statistics from Villanova University. Ott is an Institute of Electrical and Electronics Engineers fellow.

As for what’s next for Boston, the native Tennessean said he and his wife, Brenda, intend to move into their son Brian’s condo in Hawaii for the winter after he graduates with a doctorate in geophysics from the University of Hawaii.

Boston is also looking to serve on a couple of boards of directors, potentially a utility and a high-tech company, he said, noting that he wrote his graduate thesis on the optimization of energy storage.