Statement on FERC techincal conference regarding PJM’s governance

In response to the Federal Energy Regulatory Commission’s (FERC) technical conference on PJM governance and stakeholder reforms held on July 23rd, 2026, Kent Chandler, a non-resident senior fellow with R Street who participated on a panel at the conference, and Michael Giberson, a senior fellow in energy policy, have released the following commentary:

As Kent said in an invited statement filed before the meeting, “PJM’s governance process is broken, but not irreparably so. As opposed to other RTO regions, states are on the outside-looking-in in PJM when it comes to major issues that ultimately affect retail electric rates and states’ economies. States have long sought a meaningful seat at the table in the decision-making process at PJM, particularly on issues that jointly fall within the ambit of federal and state jurisdiction, like wholesale transmission costs and resource adequacy.”

He also noted that “Damage aside, what ails PJM can be fixed without the need for the Commission’s intervention. In fact, many of PJM’s substantive issues over the years stem from overly-intrusive FERC engagement. Furthermore, the Commission’s ability to dictate many specific governance reforms is limited given current legal precedent. Instead, the PJM Board of Managers, Members and the states should get serious about ensuring the region’s electricity market works for its consumers. While there is certainly a role for the Commission, particularly as a convenor like it is in this proceeding, there is no legal impediment to the region’s stakeholders from agreeing on a changed framework that sets a new, more sustainable course.”

In his statement, Kent lays out four considerations for any governance changes within PJM: the need for transparency around Board of Managers decisions, the centrality of rules and processes being durable once they’ve gone through the stakeholder process, the importance of sufficiently prioritizing pressing issues, and the fact that PJM should be empowered to bolster its independence from Members.

And Michael Giberson, who recently penned an op-ed on this topic at RTO Insider, explained that “PJM has been asked to settle questions no RTO can. It has been doing more than it should for as long as it has been an RTO. At a time of modest load growth, it did not matter much. Now it does.” He also noted that “Speeding the processes without addressing structural reforms settles the same distributional questions faster. Narrowing the questions PJM is asked to answer—returning political choices to the politically accountable bodies [PJM President and CEO David] Mills named—would let procedural fixes restore the RTO’s legitimacy rather than further damage it.”

To speak to the scholars about this issue, please contact pr@rstreet.org.