MANY MINDEDFERC's PJM Governance Modernization Plan
FERC has options to modernize PJM Interconnection governance under its longstanding authority since the 1970s, building on legal foundations established in the 1980s and 1990s. The agency’s 1996 RTO Independence Rule—requiring governance structures to prevent 'control' by any participant class—was initially rejected by FERC in 1996 for allowing utilities undue influence. Recent actions include FERC’s potential adjustments to filing-rights allocations and nominating committees, while PJM implements the rule through bylaws and personnel policies to block employee connections with market participants. A July 2026 technical conference highlighted slow decisionmaking as a driver of high wholesale energy prices, prompting these reforms.
The mechanism centers on FERC’s authority to reconfigure PJM’s governance without violating the 2023 Atlantic City Electric case, which prohibits ordering utilities to surrender filing rights. Utilities support PJM taking members’ filing privileges but require states to gain certain rights—a nuance that avoids direct filing under federal law. This approach aims to strengthen PJM’s independence from utility control while respecting existing legal constraints.
For energy access, this could reduce regional blackouts and lower wholesale energy costs by preventing grid governance bottlenecks. The reforms directly address a structural cause of price volatility identified in recent FERC analysis. However, the impact remains conditional on state engagement with filing privileges and the absence of new legal challenges to the Atlantic City Electric framework.
What to watch: FERC’s ability to adjust filing rights without triggering the Atlantic City Electric prohibition, and whether state participation in PJM governance meets utilities’ requirements. The source material is limited to a 2026 Harvard Law opinion piece and FERC’s technical conference notes—full legal implications sit with the original reporting.
Source: Utility Dive