FERC initiates major grid reform addressing transparency and independence concerns at largest US power grids.

U.S. energy officials called Thursday for greater independence and transparency at PJM Interconnection as federal regulators weigh reforms to the nation's largest power grid, which faces mounting blackout risks as demand from data centers accelerates while generation capacity lags.

PJM serves 67 million Americans across the Mid-Atlantic and Midwest, home to the world's largest concentration of data centers. The grid operator has grappled with power shortfalls and surging electricity prices since regional demand began climbing roughly two years ago.

White House officials, state governments, and power industry executives convened at a technical conference hosted by the Federal Energy Regulatory Commission to explore solutions. Among proposals discussed were granting the grid operator's board greater independence from voting members and mandating public disclosure of board decisions.

"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 Deputy Secretary of Energy James Danly.

PJM's hundreds of members—including transmission owners and power plant operators—vote on market rules through a multi-layered process, with the board ultimately approving proposed changes. Critics contend that board deliberations and voting lack transparency, conducted largely outside public view.

Conference participants raised concerns that board members, serving three-year terms, risk removal for taking unpopular or opposing positions among the 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.

To address retention concerns, participants proposed extending board terms. PJM's new CEO David Mills suggested six to nine years as a reasonable term length.

FERC commissioners also explored giving states—including governors—greater decision-making authority over PJM. While governors wield political influence, including the ability to cap power prices in the grid's latest auctions, they currently lack voting membership.

Lake, who previously chaired the Public Utility Commission of Texas following the catastrophic 2021 Winter Storm Uri, warned that PJM exhibits similar governance failures. "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 reform.

PJM has independently proposed reforms aimed at accelerating power generation, expediting data center connections, and preventing future shortfalls.