Federal energy officials gathered Thursday to press for sweeping changes to how the nation’s largest power grid is run, raising alarms about the growing threat of blackouts as electricity demand from data centers continues to climb faster than new power sources can be added.
PJM Interconnection, the grid operator responsible for delivering electricity to 67 million people across the Mid-Atlantic and Midwest — including the world’s highest concentration of data centers — has been grappling with power shortages and skyrocketing electricity costs for roughly two years as regional demand has surged.
Representatives from the White House, state governments, and the power industry gathered at a technical conference organized by the Federal Energy Regulatory Commission to explore possible fixes to PJM’s supply and pricing challenges. Among the proposals on the table: granting PJM’s board of managers greater independence from its voting members and requiring that board decisions be made available to the public.
“We want the board to not be shrouded in mystery or secrecy. We want to know what’s going on and we want the responsibilities to be clearly outlined,” said U.S. Deputy Secretary of Energy James Danly at the conference.
PJM’s membership — which includes hundreds of transmission owners and power plant operators — votes on market rules through a complex, multi-step process, with the board having final say over proposed changes. Critics have long complained that the board’s deliberations and votes happen largely out of public view.
Conference participants also raised concerns that board members, who currently serve three-year terms, could face removal if they take positions that clash with the preferences of the broader membership.
“PJM needs an independent, transparent board that can take action and make tough decisions without fear of being fired after every board meeting,” said Peter Lake, senior director of power at the White House’s National Energy Dominance Council.
One proposed fix to the board’s vulnerability is extending member terms. PJM’s new CEO David Mills, responding to a question from FERC commissioners about an appropriate new term length, suggested somewhere between six and nine years, after which members would automatically step down.
FERC commissioners also floated the idea of giving states — including their governors — a stronger voice in grid decisions. While governors currently hold some political sway over PJM, such as the ability to cap power prices in recent electricity auctions, they do not hold formal voting membership in the organization.
PJM has put forward its own set of reform proposals aimed at boosting power generation, speeding up connections for data centers, and preventing future shortfalls.
Lake, who previously led the Public Utility Commission of Texas in the aftermath of the catastrophic 2021 Winter Storm Uri grid failure, said he is seeing troubling parallels between PJM today and the conditions that preceded that disaster.
“The root cause of that failure was a failed governance structure and a failed stakeholder process, the same ills that harm PJM today,” he said, stressing the urgency of acting quickly on reforms.
