By Christen Smith
VALLEY FORGE, Pa. — Sector whips chastised the PJM Board of Managers on Thursday for privately agreeing to a meeting with a select few transmission owners as part of a pilot program intended to foster better dialogue with stakeholder groups.
Marji Philips, director of federal and RTO services for Direct Energy, told the Members Committee that an April 12 letter from the board with vague details of its intent to test out annual meetings with individual sectors blindsided whips, who knew nothing about the pilot, despite being tasked with coordinating roles.
In its letter, the board said it will organize 90-minute meetings with senior executives from each individual sector to discuss areas of specific interest at a high-level perspective. Three board members will attend, while whips will choose which executives to send for the closed sessions. The board held its meeting with the Transmission Owner sector on April 23.
Philips said sector whips on April 22 learned from PJM staff that the board’s “quick” decision was in response to recommendations in the report on GreenHat Energy, released late last month, that identified internal cultural issues as contributing to the financial transmission rights trader’s default.
Based on feedback given to the whips, Philips said stakeholders generally approved of the idea itself but complained about being left out of the decision-making process entirely, with no transparent communication as to when, why and how the board came to its consensus. They also questioned whether the April 23 session counted as the TO sector’s pilot meeting.
“Because of the way it was laid out, it looked like an insensitivity that comes with the culture of arrogance,” Philips said. “I’m just being brutally honest with you.”
Board member Charles Robinson said he and his colleagues considered the issue carefully, weighing concerns about code of conduct and board independence, before agreeing to the meeting and, ultimately, the pilot program. Board members also worried that a prolonged stakeholder process would slow down approval of a pilot program. “When we decided to go forward, it was largely to address concerns about the degree to which we listen to stakeholders,” Robinson said. “We could enhance communication in this fashion without sacrificing the codes of conduct. In our view, this was not a ‘trade off.’ We will never trade off on our core obligation to the markets and this organization.”
Adrien Ford, sector whip for the Electric Distributor sector, said the letter suffered from inconsiderate wording, even if its conclusions “may have been sound.”
“When there is a lack of full understanding and transparency into what went down, then one will make up a story as to what went down,” she said. “And that doesn’t help build trust.”
PJM CEO Andy Ott took responsibility for the rollout. “I’ll take ownership that we could have done it better,” he said. “We could have met with the sector whips. In retrospect, it was disrespectful.”
Katie Guerry, vice president of regulatory affairs in North America for Enel X, said that while the sector meetings are “a good thing to do,” she worries that the current structure will create a distraction by the potential infighting between members who are vying to get the first crack at the PJM board.
“We asked to be included in the process addressing concerns from the report at the beginning; instead it now seems we are being told what the solutions are that will make us happy, before the process even starts,” she said. “The misstep of implementation and execution is exactly why we previously asked to be involved from the get-go rather than be told after the fact.”
Philips said sector whips will continue discussions with other members about what level of transparency to expect from the private meetings moving forward. Ott said in the letter that the board will evaluate the effectiveness of the meetings after one pilot round and consider Manual 34 revisions to memorialize the practice.