Electric Power Show Ep. 2: PJM CEO Andy Ott says 'the game has changed'
For PJM CEO Andy Ott, life used to be simpler.
The wholesale market operated by PJM was formed in the late 1990s with a dual mandate: reliable delivery of power at the lowest reasonable price.
That mission served the grid operator relatively well for its first decade, allowing it to become the largest wholesale power market in the nation, and — until the integration of Europe's markets — the world.
But now, some state policy priorities are putting stress on those founding principles, Ott told Utility Dive at the recent meeting of the National Association of Regulatory Utility Commissioners (NARUC). Driven by a desire to address climate change and promote state economic development, some policymakers have moved to subsidize or mandate power resources that may not otherwise clear PJM's market auctions.
"What I'm hearing from the states is maybe least cost isn't the only answer," he said. "Maybe it's least cost green power or least cost locally generated power or they want to save a particular plant. So the game has changed, and if it's changed to the point that a capacity market is not the best way, fine, but our mandate is to operate reliably at least cost."
That internal conflict is at the core of the debate over a rewrite of PJM's capacity market rules, begun after fossil fuel generators challenged state support for clean energy. And the desire to support specific resources is also behind the push from the Trump administration to save coal and nuclear plants from retirement — a debate focused predominantly on the PJM market.
Ott discussed those issues and more in this week's episode of the Electric Power Show, recorded onsite at the annual NARUC conference this month in Orlando, Fla. Also included: a review of PJM's recent fuel security report.
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