On July 14, the Federal Energy Regulatory Commission (FERC) denied requests for rehearing of its December order rejecting a proposed contract between PJM and its utility members. In 2024, the Electricity Law Initiative (ELI) filed three comments opposing the proposed contract.
The proposal attempted to revamp the arrangement between PJM, which operates the bulk power system across 13 states, and its utility members. When FERC approved the creation of PJM in 1997, it required that the organization have its own decision making processes that are independent of the utilities. FERC’s goal was to ensure that in operating the bulk power system PJM prioritized competition and efficiency over the parochial interests of utilities and other market participants.
In the July 14 order, FERC found that the proposed contract violated FERC’s rule that PJM “be independent of control by any market participant or class of participants in both reality and perception.” FERC’s conclusion echoes the Electricity Law Initiative’s filings from last year that showed how the proposal would compromise PJM’s decision making processes, particularly about transmission development.