The Grid Bottleneck Holding Back Clean Energy | UIS | Stephen Bennett, PJM Interconnection

Welcome to a special recording of a fireside chat that occurred at the utility innovation summit put on by the grove in July 2026. The UIS or utility innovation summit, the acronym will catch on at some point, is an event series dedicated to the conversation of how innovative technology tangibly gets deployed to the grid. This series

happens uh in Philadelphia and will continue to happen in the Mid-Atlantic area. So a lot of the topics are specific to the mid-Atlantic and uh the biggest RTO ISO body in this area is to those in the industry obviously but PJM and so it was uh it seemed silly to have a conversation about this without

getting u weighin from PJM. So this is a conversation with a Philly representative of PJM. uh he's been at the company a long time and uh I really enjoyed uh interviewing him. Uh I really was impressed by the uh questions that we got from the audience afterwards. We got to hear uh what what I believe is an

increasingly rare um human take from PJM on uh things like innovation in the grid, how uh a marketplace like PGM supports it, what they can and cannot do, uh narratives uh in the world and in people's understanding of PGM about what they do and what they don't do. uh it was very eye- openening and I learned a

lot about their role because they are very pivotal but understanding how uh and in what ways they are not uh pivotal I think it was just as important uh in the deployment of innovation to the grid. So thank you to our sponsors clean techch girls growth lab and craz and friends and I hope you enjoy.

All right well thanks again uh thank you again to the speakers of the first panel. Thank you again uh Tempest for coming out to uh to moderate this. Uh we had PGM mentioned if you guys were listening closely we had PGM mentioned a couple times in the last panel and it is because they're one of the most

important organizations on the planet. So uh uh before I get started just want uh a little introduction of yourself and uh we can do a PJ. >> Sure. Thank you. Uh, and thanks for having me. As you may have noticed, I'm not Craig Glazier. So, if you were here to see Craig, unfortunately, he had a

medical issue and I'm stepping in for him. So, uh, Craig's been in the industry for decades. It's impossible for me to fill his shoes completely, but I'll do my best and hope for Craig's quick recovery. So, my name is Stephen Bennett. I'm senior manager government affairs at PJM. Uh, I do state government affairs for the RTO. I've

been in the industry, I just realized, about three decades. So I've been different aspects of um of the energy industry mostly on the competitive side. Actually worked for Exelon and uh PPL. So I've been employed by both of the you know the two of the of the three speakers from the previous panel. Um

civil engineer by training in in at the University of Maryland and then an IT career that was focused on uh the competitive energy space and then I did what every engineer and IT person did. I pivoted into government affairs. um leveraging my soft skills. So um so what we do at PJM is a little bit different

from a government affairs perspective. We're not lobbyists in the traditional sense. We don't try to influence policy. I'm not out there whip counting a vote or anything like that. really it's an it's mostly an education and liaison role where we're just trying to make sure policy makers understand how the competitive retail market works, how the

competitive wholesale market works, how the grid works, which you know is sometimes difficult to get people who don't think about it uh the complexity of what it takes to keep the lights on, but that's my job. So >> yes, and yes, we know Craig is not here, but uh the introduction and then our our

conversation a few days ago about this, I'm still equally excited that you're here. So what the mission of these summits and the mission of the Grove is to really get at the details of how climate tech is deployed tangibly into society. So we're here to talk about uh electricity, the grid. Uh we

have uh a panel with climate techch founders with utilities. Uh and so what I want to do is I want to start at just a general description of what PJM is, understand PJM's uh significance, but also um their position inside of uh management of the grid, deployment of of uh electricity, innovation, things like

this. and then we can get into the the details about things that you guys have worked on, things that have have worked and have not. So we could start with just uh your best description of what PJM is.

>> Sure. So PJM uh it was mentioned before PJM is an RTO a regional transmission organization and we are a federally authorized and chartered nonprofit whose job it is is to maintain reliability on the bulk power system and the bulk power system is basically the generation uh and the like utility scale transmission

connected generation and the high voltage transmission lines. So our remmit ends at the substation where you um uh where you go down to the distribution level uh voltages and that's where Exelon and PPL and others pick up uh their authority. We're federally regulated. Um your local utility is is state regulated. Um we

again nonprofit. We own none of the infrastructure. We have no vested or financial interest in any of the generation or transmission or any of the technology that's on our system. So I am not enriched nor is my family enriched if we run solar or coal or nuclear or gas or anything like that. Um not

allowed to own stock or financial interest in any of our members. We have a member-driven company. We have an independent market monitor. Uh we're actually a a transparent organization. Now, I think a lot of people would maybe raise an eyebrow when I say that we're a complex organization, but we're transparent. Our governing documents are

all available online. We're federally regulated by the Federal Energy Regulatory Commission. Everything that we do faces federal scrutiny. We're a member-driven organization. We have thousands of members. Those are the the the entities that help us push forward change and evolve in the marketplace. Um but again that the our job our mission what we do what when I wake up and when

my colleagues wake up every day our job is to keep the lights on reliability is our mission and we use the competitive marketplace to add cost efficiency to that mission. So keep the lights on. Literally. >> Literally. Literally.

>> And uh and so if you you mentioned uh RTO, that correct? Uh RTO and ISO. Are these the same things just different names? >> Yeah, basically there are some there are some lead like fairly nuance legal distinctions between the two. But for the most part and for practical purposes, whether you're New England

ISO, New York ISO, uh, mid-continent ISO, or PJM, which is an RTO, we're basically all the same. >> Got it. How many, just focusing on the United States for now, how many of these exist? >> That's a good question. So again, New England, New York, PJM, SP, MYO, Caliso.

So I think six if I'm count. >> That's impressive. I didn't know I've been able to do that. Um, okay. So then so then again just so I understand correctly. So we have uh depending on the type of energy generation we can talk about that later but energy is generated and then it enters your

jurisdiction and then there is a market for this energy that leads to nuclear plant under your jurisdiction. It is federally regulated. So it is half private half public market that the utilities then buy from you and then sell to us. Is that accurate? it that basically um it yeah so again so we have

members member companies again ppl and exalon are transmissionowning members we have generationowning members let me back up one thing I failed to mention and I apologize we actually serve the entire mid-Atlantic region so our footprint is all or um some of 14 states uh including the District of of Colombia so the the the other aspect of an RTO

for of like PJM is that we leverage economies of scale and regional diversity. So some of our states like Pennsylvania are restructured meaning that there are transmission companies and there are generationowning companies and they are separate. Some of our states like Virginia maintained the uh legacy vertically integrated utility model where the utility owns everything

from generation to transmission to distribution. So for PJM again we don't own any of this but our members agree to join PJM. So the transmissionowning members like Exxon and PPL say we want to be part of an RTO. They join the RTO.

They sign an agreement that gives us the ability to operate their transmission lines. Not own not maintain but operate. If you are a generator owner and you come to PJM you give PJM the authority to dispatch your generation. So every day you bid into our market and you say here's how much energy I will give to

you PJM for these prices. We take all of those offers and we say how much energy do we need and we dispatch generation to meet the need over the 24-hour day and we actually do it on 5C uh 15-second intervals that and we also then manage the transmission system to make sure that

that generated electricity can get to where it needs to go safely. And you heard Eric talk about congestion, right? So, we have to make sure that the transmission lines are operated safely because if you push too much voltage through a transmission line, it'll burn up and it'll be out of it'll be out of

service. And we have to manage that congestion where we say, okay, in a perfect system, we would always run the cheapest generator wherever it is, but that's not always deliverable based on system conditions. So, sometimes we have to take generators that are a little more expensive because those electrons can actually get to red and heat. So the

federal government regulates all of that. Our job is dis dispatch the generation, manage the transmission system, and then make sure that that electron gets from A to B safely all the time on 15-second intervals. >> Thank you. I will be re-watching this recording a couple of times. So obviously, yeah, we'll get Q&A at the

end. >> Oh, I just wanted one sentence. You're the DOT. >> Yeah. >> Energy check. >> Yeah. sometimes. So the analog sometimes we use is um air traffic control, right? So you think about air traffic control, they don't own anything at the airport.

They don't own the planes, the tarmac, the hanger. They don't even own the Chipotle and the food court. But their job is to make sure that planes get from A to B safely and on time. And that's kind of what we do. You don't have ownership of the infrastructure, but we have to make sure that the electrons get

where they need to be safely and on time. >> Awesome. Thank you. So, so um so then without getting into the details of it because that's not the focus of these summits these these uh these summits in the grove we're here to talk again I'll say it forever until I die it is about

the actual deployment of beneficial technology to society. So, a lot of times, and I was just talking to Craig about this um a couple days ago, a lot of times conversations about PJM, about Pico, about PPL, um about these different utilities are either uh boring, which this is not.

>> Yeah. >> Uh or they're they're political because inherently being regulated um by the federal government uh or politicians, a lot of people say, "Hey, my my utilities are high. My bills are high. I need someone to represent me and and fix this. So, without getting into the details, why is it so contentious what

PGM is? >> Yeah. So, I I I love that question because for the last couple of years, my life has just been that we are like I haven't really had an opportunity to think that much about why we are. It's just that we're we are and um right now I think it's mostly because of

affordability. So, you know, prices for everything that we use in our society right now are higher than they were over the past couple of years. And energy is included in that. So, gasoline, energy, insurance cars groceries everything. Um, but electricity is starting to be seen as a common good, something that we can't live without.

And so when it gets expensive um it's difficult for c for you know a large swath of our customer base and we serve a little over 67 million people live in our footprint. So you know from a scale perspective when prices go up it impacts a lot of people.

thing is is PJM runs a market and you know market fundamentals are in times of abundance prices are low in times of scarcity prices are high and that works really well because those price signals indicate where your investment should go if prices are low it's not a good investment climate prices are high

that's signaling that we need innovation and we need investment for a very long time the PJM portion of your bill and all 67 million of your friends and family and and neighbors was actually relatively low and stable. We were abundant from an energy supply perspective. We had plenty of generation. In fact, ironically, some of

the critics of PJM right now that charge that we are not putting generation on the grid fast enough were critics of PJM having too much generation back in the early 2020s. So, you know, things changed pretty quickly. So at that point in time a lot of investment was occurring on the wire side. So supply

prices were flat or low and on an inflation uh adjusted basis they were actually lower but it was the time for us to invest in the wires because the wire side of the system was pretty old. So your bill might have been going up but it was not going up as fast because

supply was creating headroom. Now the time of flat demand and supply cost being cheap over why mostly AI data centers not entirely okay there's other like was mentioned on the the previous panel there's other drivers of load but AI data centers are very unique from a load uh profile perspective aluminum smelters use a ton of

electricity mining I think the South African example ton of electricity but very few entities can put that density of usage in a small warehouse size facility, right? People aren't building hundreds of smelters across the United States. It's just not how it works. But people would like to build hundreds of data centers just in our territory

because you can because it is a deployable technology and it is at the cutting edge from an from a economic and a national security perspective. So, what we're seeing is, and I'm probably getting into more details than Blake wanted, I apologize. So, I'll I'll roll it back. Is the supply demand dynamic has changed. It changed very quickly.

Our capacity prices, which is just one part of the bill, went from $28 one year, $270 the next year to $333. >> Yeah. >> Now, here's the thing. If that had happened gradually, people probably would have been able to manage it. But year-over-year price increases of that magnitude are one very difficult for

customers to manage and two get political attention. >> So in if that's not the details I don't know the details I'm sorry. >> No no no that's okay. I think uh I >> that was the engineer part of >> that's okay. I have uh uh two questions for you. Quick one. You mentioned 67

million as under your jurisdiction. uh for scale. Can you let us know relative to any other ISO RTO uh how much that is? Spoiler, they're the biggest in the country. Yeah, I just took your answer. But are you the biggest in the world? Do we know that?

>> That's a good qu I you know um I don't know that for sure because I know Australia the whole country is I think one one version of an RTO or whatever they call it there. Um I know we're the largest wholesale competitive wholesale electricity market in the world. I don't know if we have the largest um

population footprint. We certainly don't have the largest geographic footprint. I think in the United States that's probably mid-continent because it goes from Manitoba down to Louisiana, you know, through the center of the country. But from a from a from the I think from percentage of GDP that's generated in the footprint I think uh population

density uh and load and generation I think we're I think we're easily the biggest in North America if not >> which which is important to keep in mind for this conversation because when we talk about specifically PGM's role or how they're approaching innovation or how they're thinking about innovation we have to keep in mind the significance or

the uh the scale at which they operate and how that also gives you a lot of resources but also um I think would put you on the opposite side uh or towards risk uh adversity because you have so many people to serve. So um can you describe what the interconnection queue is?

>> Yeah. So um PJM does not we don't want to act as a gatekeeper to innovation. We certainly don't want to act as a gatekeeper or at least not by fiat or policy but we have the responsibility of manage managing the grid from an engineering safety perspective. When you interconnect any kind of generator to the grid there is

the potential for bad outcomes. Right? So PJM and every other RTO has what's called an interconnection queue. And the idea is you get in if you want to interconnect to the grid as a generator, as a supplier, you get in line. When it's your turn, we study the impact of of what your interconnection uh the

impact of your interconnection to the grid. If if there's no impact, you get your agreement, you move forward, and hopefully you move to construction, you put your projects online, and we have new supply. If there is impact, we work with the transmission owners like Exelon and PPL to understand what would be needed to remediate the impact and then

whatever that is, the cost is allocated exclusively to you as the developer because um your interconnection costs are but for so but for your interconnection, we wouldn't need to build out the additional infrastructure and so we're not going to allocate that to customers. We're going to allocate that to you as the developer, the person

that's benefiting from interconnected to the grid. Our old system that we just very recently reformed worked very well for 10 years when we had about a hundred projects coming to us for interconnection per year. Imagine kind of the pre-renewable world of the energy, you know, of of wholesale energy where you had big, you

know, one gigawatt centrally located mostly natural gas plants coming online. So our our Q process where it was serial, it was first in, first out. We studied you, moved on, next person, moved on. about four or five years ago, now I think about it, the renewable the clean energy transition started occurring and

we went from a couple hundred projects to several thousand projects and quite frankly our grid process it wasn't our interconnection process wasn't built for that and so a bottlenecking occurred and so if you wanted to get on the grid you could because your study times were taking forever. Also the way there was a

nuance to it and again this is the detail but if you were on the if you were in line and you got studied and then you decided that you weren't going to move forward everybody behind you had to get restudied because that changed the whole topology of the grid. So we were restarting our process all the time

and so nothing was moving forward. So we we we recognized that this wasn't going to work. We went to our members we came up with a fix. We went to our regulator, they approved it. We implemented through about a two or three year transition period to work through the backlogs was about 300 gigawatts. 300 gigawatts of

name plate generation in our backlog. That's more. We're 180 gawatt system. So we had almost double sitting in the backlog. We worked through that in three years. And just in April, we started a new process that should be much more efficient, uh, much faster and much more conducive to getting all projects on the

grid within a year or two. >> So, so, so quickly, you said there were 300 gawatts of backlog. And just for scale, again, the the the biggest uh wholesale electric market in at least in the country throughout the world, >> you said 180 gigawatts in total is what you Robert.

>> That's right. Okay. Um, when when we're when we're talking about uh the technologies like DLR or uh technologies like uh I guess would you describe the the current innovation that that you guys had just uh gone through uh rehauling your system as a as an innovative technology?

>> I mean there were parts of it that were a lot of it was process but we are actually to your question earlier we're using AI. So we're working with Google Tapestry in order to try to see how much we can utilize AI to automate some of the study and analysis to make that move

faster as well. So I think that part yes um you know you hit the nail on the head earlier I mean um when you think when most people think about innovation they think about Silicon Valley and what's one of Silicon Valley's you know rallying cries move fast break things >> right that does not work really well in

the energy you know utility industry in fact I think if I had gone to Eric at some point while I was working at ppl and said Eric you're a reliability engineer we're going to move fast and break stuff I think because pro you know what is a sheet right that's not what we

do in our industry so innovation does occur in our industry but it it happens a little bit slower it happens a little bit more quietly it happens with a little bit more testing but it does happen and things like recognizing a problem with a process and then trying to use the tools available to us to make

that process better is some of the kind of innovation that we do >> okay so then let's get into that specifically then if we're talking about innovation whether it's a novelty technology or whether it's uh some form of of program rehaul to to to genuinely improve the system. How how what are let's start with some common

misconceptions that people have about uh innovation at RTO because I can tell you from my perspective um on my podcast I know we love plugs today so make sure to make it plugged. I have a podcast it's also called the growth. I do a lot of really awesome interviews and something that I've learned is that um the queue

can be uh just dark. It it can be a mystery like there there's there's so many uh project requests. Some uh some some developers will put in 10 different requests in 10 different areas because they don't know exactly which one's going to get um approved and it and it and it creates a problem in the entire

the entire system. And so uh and uh there was a there was a company that I had gotten in contact with that was trying to use the technology to clear up uh the confusion in the queue and be more specific and have more clarity of data for RTO's and ISOs but also other

people applying to be in the queue so that everybody had a better understanding of what was happening. I don't know where that company's at at the moment. They're mirror energy if anyone wants to look into it. But uh anyway, so from the from this perspective, what is um a misconception?

I remember having conversations about something like Nerra and saying, "Oh, the things in our way are ISOs or RTO's, >> right? Um, is that true?" >> So, um, I would say no, but I'm not an objective uh assess, you know, assessor of that. But, so one of the things about the clean energy transition was there

was a democratization of energy supply, right? To build a natural gas plant, you have to I mean you are have to be a pretty large highly capital enter enterprise in order to build a natural gas plant. But to build a solar facility or a wind facility or a battery facility, it opens up the

opportunities to a much broader um field of participants. Now, when that happens, you're always going to get a mixed um mixed bag, for lack of a better term, of of those entities. And some um were, you know, highly diligent. They would actually do the research to understand where on the grid there was headroom

that they could interconnect with the least amount of cost and friction. There were some that didn't do it at all. They just said, "Hey, I've got some land. I, you know, this solar thing seems great. Um, I'm going to see if I can interconnect." They didn't really understand the process or what it would

take. And then there were some that said, "You know what? I don't know where. I know I need to find a good place to interconnect. I don't know how to figure that out, but it doesn't cost me very much to get into the queue. So, I'm going to do five different Q entries

despite having one project and then just arbitrage where the best place to be is. But remember what I said, our old process, if you dropped out, we had to start the whole study over again. So if you put in five projects or five Q entries for one project and that first one was not the one you picked, you were

forcing everybody to get restudied again, >> right? So >> So we're not doing that anymore. We're doing it differently. >> Right. But but I I I guess that environment creates a situation where from the outside people can say, "Oh, PJM is stifling uh the the evolution of energy generation where they're not putting up solar farms or wind farms and

and safety to to fossil fuels." But behind the scenes this type of thing is happening cuz in the queue we are talking about solar and wind and other deployments. Is that true? >> Yeah. So, so with the clean energy like so we went from a grid or an interconnection queue that was primarily

gas to one that was about 90% solar and battery and it was honestly just unfortunate timing. Right. So PJM is I I can tell you with a straight face and without reservation, we are generation technology agnostic. We do not care where the mega megawatts come from. They have to be safe and they

have to be available and they have to be cost effective and that's it. So whether it's coal, nuclear, solar, wind, hydro, geothermal, you don't care. Um but it was actually the proliferation of renewable projects that created the grid backlog that created the um the timing issue where projects weren't moving forward. So it's it really is a

unfortunate coincidence that made it look like we had the PJM you were fine when natural gas was interconnecting. Now that solar wants to interconnect it's taking years and years. Yes, that's true. But it's not a causation issue. It's or it's not, you know, from that from that perspective, it's not because we like gas and don't like solar or

anything like that. >> So, so can we talk about then the uh the the the reform uh the reformation of that program? How did that get initiated? Who how did it go through the stages that it needed to in order to get approved? How did it get executed? How does an organization like like PJM

recognize an opportunity to invade and and to innovate and actually execute on that? >> Yeah, it's a great question. So, you know, we obviously we do analysis of our of the interconnection queue. We understand how many, you know, how many entries, how much exit is occurring, you know, how fast are we are we processing

the the project uh the project entries. And we recognized, you know, we saw the trend. We saw the the the if you saw the line again kind of flat about 100 or so 150 and then we saw this uptick. Now I think the one place that is a valid criticism of PJM is that so we saw the

first cycle with a significant increase in projects and we said okay that's notable but not necessarily a trend. The second window it increased more and that's probably when we should have acted. We actually waited till the third window to to verify the trend and that lost us about probably six months once we fully recognized that this was

you know it's not anomalous like this is the new world that we live in we're going to get thousands of projects um there's a couple of things that we did one so so we went immediately to our membership now PJM me PJ there's uh I could bore you for talking about details I could bore you for hours about how the

membership works at PJ jam. It's a voting structure. We have subcommittees, working groups, committees, uh, membership committees. All of that goes to our board. It goes to FK, so on and so forth. It doesn't move quickly. But in this case, because of the, um, because of the acuteness of the problem, we actually were able to come up with a

solution to have the interim process to move through the backlog and then a new process that would be faster, more efficient. Uh we got that through our stakeholders in about six months I think which is record time. So when you have a thousand members getting everybody to agree on something and it was voted on

with I think 90% support which again is that doesn't really happen that much anymore. FK approved it very quickly and then we went right into the reform. Um we parsed it up into three stages because there was so much generation to study and we worked through it as fast as we possibly could. Um along the way,

some of the other things that we did and and you mentioned it, we recognized that understanding where the headroom on the transmission system was important to try to help developers um be more efficient with their Q entry. So, we developed a suite of tools that actually allows you to go and it's not I

won't say it's easy to use because the grid is kind of complex, but it's very available. If you're a developer, you can go on a PJM's website and for free you can look and see where the best places to interconnect generation are.

You can do that analysis before you enter the queue. We also have done some additional um technology and software work to create a comprehensive package so that if you are a developer, especially maybe one that's new to the game, we have a package that will help you do everything you need to do for our

Q process and manage it through one uh one free system that we have. So, so then uh let's I I want to a couple more questions before we get to Q&A. Um but I do want to mention the the DLR program that that you guys uh that that PO um spearheaded and that you guys

also implemented. So with a with a more tangible technology like that instead of something like uh innovative program or an internal process with it with a tangible uh technology that needs software and hardware like you're speaking to what is PGM's role in the deployment of that technology.

>> Yeah. So PGM really from a from a innovation perspective and a and a technology to you're very much a platform. We're not really a a driver but for the fact that we do send price signals but from the actual innovation itself that almost always has to come from our members because we don't own

the technology. We don't own the transmission lines. We don't own the generators. We don't play favorites to say like oh we think geothermal is super cool so we're going to just interconnect geothermal. You know we're we're by law not allowed to do that. So innovation like uh dynamic line ratings originates usually from our members.

They get comfortable with that technology or innovation as Eric indicated they come to us to so that we can mutually partner and understand the implications. So are there data feeds that need to be augmented? You know how will we use the information? um you know uh when we change our dispatch tech uh

dispatch tendencies because we have more precise information on DLR you know what does that mean how do we put that into our processes is fk okay with it in some cases some cases there's few times we don't have to go to fk but a lot of times we do and so that innovation comes

from without and talking about things I think people maybe don't understand or misunderstand about PJM we're not the gatekeeper on that We can't. So um DLR is something uh called get um grid enhancing technologies or ATTs advanced transmission technologies. There's a lot of focus on that because we need more transmission capability and things like

DLR advanced conductoring you know some of the ceramics and things that you can use to push more voltage through the lines. Really really interesting times for for that technology right now. People get upset because there's not a lot of AT or get um deployment in PJM and the critics come to us and say PJM,

why aren't you deploying ATTs? They're these great things. They're going to, you know, revolutionize transmission. Um you're going to be able to push so much more energy through existing lines. You won't have to green field new towers through my orchard or through my favorite forest or whatever. We can't mandate that. That's not within our

remitt. You're not the ones that tell PPL and Exelon and PSEG and Delm Marva that they have to use ATTs. They look at their system. They innovate within their system because they're the owners of the technology and then we can act as a platform for which then that technology can be implemented. And if it

is implemented like successfully like PPL's DLR program, the good thing about being such a large platform is then that signals to the riskadverse community that in which we operate that they can adopt those technologies as well. >> So, so then so then the that the appetite for these new technologies comes from utility up to PGM versus PGM

the other way. >> That's right. It comes from and and it doesn't have to just be UT. You're right. But it doesn't have to just be utilities. It's the it's the independent power producers. It's the demand response producers. I think uh virtual power plants is a is a place we're going to see a lot of innovation coming

forward. That grid flexibility. I can't remember who mentioned it, but grid flexibility, right? Being able to put more empowerment on the user side. We just had a probably the hottest weather that PGM has ever seen a couple weeks ago. Literally, I think our meteorologist said, and I don't understand all the details, but like the

duration and the absolute temps, hottest time in PJM's history. We leaned very heavily on demand response to be able to get through that period reliably, right? So, somebody else said it from an emissions perspective. From an emissions perspective, the best watt is the one you don't use. Sometimes from a reliability perspective, you need to

stop using watts to keep the lights on. And we did. DR is challenging because if I'm a factory and I'm involved and I'm enrolled in a DR program, my job is not to shut down my factory, right? That's not how I make money. I might make money through the program, but that's not my

primary job. My primary job is to run my factory. So, a couple years ago, if you were a DR uh participant, you probably weren't getting called on that much. But, as we've seen grid conditions tighten, reserve margins go down, weather get hotter or colder in the winter. So, we're getting close to we're

a summer peaking system, but winter's not far behind. You're being called on more and more. And so, the calculus of whether I can continue to be a DR participant is changing because I can shut my factory down three times a year, but maybe not 10.

>> VPPs take out the human element of it. They make a systemic uh they create a systemic DR platform where it's you know you sign up and now it's systemic and it's more of a push button and you have the ability to to leverage all these different technologies out on the grid batteries,

smart thermostats, smart water heaters, um backup generation, and then you can actually have something that's even more reliable as a DR5. So, so um something something that I'm thinking about while you're speaking is I'm is when we talk about innovation generally speaking why we're all here is because it's difficult in this in this segment. What drives

innovation is incentives. If someone is incentivized to find a novel technology then the risk appetite uh is is is greater than than normal. So what I want to understand uh I was having a a conversation uh a few days ago about this incentive structure of utilities specifically for uh introducing new uh technologies because if I understand it

correctly utilities uh they make money on what they built themselves and so if there is uh something that is uh not financially aligned with their incentive then they are not u they're not structured in a way where they have a high appetite for for innovation or are uh rewarded for pursuing innovation if I

understand that correctly. So from a PGN perspective, what is what are your actual uh incentives to adopt and uh and make uh the the system better, right? So um it's a little bit different. Do you remember I I said before there's a restruct there's restructured states where generation and wires are separate.

Then there's legacy vertically integrated states. Let's stay on the restructure because we're in Pennsylvania. It's restructuring. So if you are a utility, if you're um First Energy because they're not in the room. If you're First Energy, okay, you do get paid based on what you build, right? So you are regulated by the state, you

build your rate base, you get reimbursed for that rate base plus a agreed upon profit, right? So that's how that works. So um that works really great for natural monopolies like transmission and distribution. um you have a regulator that makes sure that uh everything that's built is used for used and useful and that um you know things like

goldplating and stuff like that isn't happening. So um if you're a utility and I don't want to speak for them because they're in the room, you still can be incentivized to um innovate because every time you go before your state regulator and ask for more money, it's a challenge, right? And it's more and more

a challenge now again because affordability is so front and center of everything across the political spectrum not just energy but everything. So if you have the opportunity to go to your regulator and say listen we do need to invest here we need we do need to get a reasonable rate of return because

capital flows to where rates of return are but here are some places where we're innovating to try to make sure that there's balance that is going to likely play well with your regulator. Now on the other side in the um restructured uh generation business there is no right like like you are absolutely

incentivized to be as efficient and innovative as you possibly can because you only get paid if you run. So in the restructured model if you own a generator if you're not the cheapest one out there you probably won't run. If you don't run you don't get money and you go out of business. So the innovation comes

from one the competition that you only get paid if you run and two the price signals right so the innovation incentive in PJM on the supply side is in the price signaling when our price signals are high it means there's scarcity there's need for investment there's need for innovation so if you can find the new way to take advantage

of now that's a negative connotation if you can find a new way to become the most efficient provider If you can find a way to make that data center use less energy, you're going to save a lot of money or make a lot of money because we are in scarcity pricing. And that's where our platform

works as incentives for innovation on that side of the bill. >> Got it. Um I think we're going to convene back here in two weeks. It's going to be midterm on everything. >> I do think I could teach a two a twoyear program like an associates degree on PJM.

>> I don't know if I could teach it, but I think there could be one. >> I don't I feel like >> maybe four. Maybe a four. >> Uh anyway, so uh again before we uh open it to Q&A, I got just two last questions for you. So uh it's more about your

personal journey. Why are you doing this work and why is it important? Okay, that's a that's a curveball. I wasn't expecting that one. Um so you know I kind of I'll be honest, I fell into the industry. I worked for Accenture uh you know again doing the IT stuff and my first second project with

Accenture was at ISO New England and so back in the late 90s is New England was forming an ISO the same time that California was. California was a little ahead but they were running into some delays. So actually for a little while we were racing to be the first RTO or first ISO uh in North America. Um

California ended up winning. Uh there was this company Enron out there. It didn't go great. Um but uh but ISO New England went second and uh has done much much better from that request and and Cal ISO got you know they they were able to to correct the correct course. Um so so it was a little bit serendipity that

I just was I was assigned to that project. I was doing um Unix administration. We were building a web platform which was brand new uh back then if you can think about it. You see the gray in my beard. Um, and I just kind of stuck with it. And but the reason why I think it's important is my

entire family lives within the PJM footprint. Everybody, everybody I love the most lives inside the PJM footprint. What we do every day, I said before, when we get up, our job is to make sure the lights stay on and we do it at the most efficient cost that we possibly can. And electricity at

this point is the foundation of pretty much everything we do. It's the foundation of our society, our economy, right? So, the electricity that we make sure is run efficiently and reliably is why our hospitals run. It's why our first responders can operate. It's why you can go home and cool your home when

it's 105 degrees outside. So, I feel like our mission, reliability at the least possible cost, not always cheap, but at the least possible cost, is one that touches everybody I know and specifically everybody that I love. >> So, you might have already given uh an answer to this question, but my favorite one that uh that I love to ask all my

guests is with all of uh all this work that you have done, all this work that you have to do, what inspires you? So, so the thing that jumped is my is and it's actually a little bit my wife inspired my wife is amazing. Um I am the poster child for marrying way up on uh

you know in fact all of my friends like her way more than they like me. So um she she's very inspiring. I think from a professional perspective though again um you mentioned it PJM is so I when I joined PJM I think that I'm working I think I just finished my eighth year I knew that it was a subject

to criticism but I had no idea of how significant and sometimes vitriolic that criticism was um and it's difficult sometimes when when you have people tell you you know you hate the environment you hate renewables you're terrible people, you're corrupt, this that and the other thing. When every day the people that I'm working

shoulderto-shoulder with, their whole focus is keeping the lights on. Because remember, we don't get richer if solar runs or nuclear runs or natural gas runs. All we do is say, we're going to take the realities of grid engineering.

We're going to take proven economic models. who are going to marry them together to try to get the benefits of economies of scale and geographic diversity to keep the lights on for 67 million people and do it at a price point where it doesn't cause people to choose between energy and other, you

know, other needs. So, I'm inspired by the people that I work with because we're all like none of us are going to be truly like I'm not going to be a billionaire or probably even a millionaire by working at PJM. But hopefully what I'm doing means that when you go home tonight and you flip the

switch on the light in your house, it comes on and it comes on in the winter and it comes on in the summer. It comes on at your grandma's house and your kids' house and your sister's house. So that's what inspires me is the people that I work with and we're all doing

this and the mission is reliability. >> Well, I have no idea what time it is because I'm completely absorbed in this conversation. So I don't know if uh I'm going to say we have time for maybe Yeah it's >> time.

>> No. Oh, great. Well, much over schedule, which is beautiful. So I appreciate you guys all sitting through that. Uh I thought this was amazing. I guess we have uh time uh for two more questions, I would say. So, does anybody have uh uh any questions?

>> Yes. Vice first. >> Yeah. So, I I worked in the real estate world. I'd be kind of curious to hear the difference in strength of the grid between something like a data set of projects versus something like a high-rise office or a large multi family.

>> Oh, I mean it's it's it's night and day. I mean, so there are some data. So, when you think about the really big hypers and um and by the way, I'm sorry if I'm running long. Uh I this is all you kidding me? I I actually there's nothing else.

>> If my kids were if my kids were here they'd be like dad wrap it up. Um >> so one thing is data centers are not a monolith. Okay there's hypers scale and then there's all sorts I mean we've had data centers we've actually had data centers since AOL existed right so data

centers are not new. Um AI data centers are new and hypers scale AI data centers are new. When you think about a hypers scale AI data center, think about, you know, if you're driving on I95 and you see one of those big logistics warehouses, that's if that's a data center that's using as much energy as Philadelphia.

Okay. That's that's the kind of or maybe not Columbus. Let's say Columbus. >> So, Columbus, Ohio. Yeah. Columbus, Ohio. So, yeah. So, um, you know, a high-rise, any building, you know, the the any building here in Philadelphia is not even close on a on a capacity or demand charge basis.

>> Question. >> Hi, I'm Estraa. Um, you had mentioned one of the Silicon Valley mindsets of move fast and break things, but another Silicon Valley mindset uh is having holding strong ideas lightly. Um, do you feel that that is something that the utility world and PGM does adapt? Like do you have that

mindset already? Is that the type or is that a type of mindset that can adapt? That's not just the move fast and break things, but there are other there are other, I guess, cultural constituents to the to the Silicon Valley ethos that might be applicable to rolling out new culture.

>> Yeah, I appreciate the question. Um, I think it's a bit of a mix. I think it's a bit of a mix at PJM. I don't want to I mean, I used to work for them, but I don't now, so I don't want to speak for the utilities. for PJM there is a strong

uh concept that we will never give up and again and beating the horse a little bit here uh it's reliability right so innovation PJM can be a platform for innovation but it is a rigorous taskmaster on reliability so bring your new generation technologies bring your new DR bring your VPPs bring your whatever

But if it doesn't add to reliability and if it doesn't do it at a cost-effective basis, it's not going to survive. So we're totally open to new technologies completely 100%. I would love it if tomorrow I would love it if one of you figured out fusion tomorrow and solved our problems.

>> That would be outstanding, >> right? So we don't you know Yeah. pit pitch conference or pitch pitch conference. Um so again we are agnostic to where the generation comes from. We are agnostic to the technologies. We have states that love renewables and want to be completely decarbonized. We have a state that gets mad if we don't

run coal more. >> Wow. >> Right. So I mean it just you know and that's that's cultural and it's political and societal part of their society. Um, so I think reliability we will never give up. We will never hold lightly. But how we meet that reliability, we are completely open to innovation as long as it's proven

that it can come on when it's called for. >> Well, thank you for the question. Well, I hope we made uh Yeah, why not? Let's do the last question. >> Yeah. about um can you explain I guess the process or the approval time for behind the meter versus front of the meter connection agreements?

So a little bit so if you're behind the meter you're most likely probably dealing with your local utility and it's going to be distribution level uh and not within our remitt jurisdiction. Um so actually probably Eric might be a better person to talk to about that.

>> Okay. >> All right. With that, >> and with that, I hope we were talking about uh, you know, being so open to technology, being so open to innovation. I hope we took a big step forward today with everybody choosing to be here, to everybody uh, listening to the panels and the interview. Can we just give it

up one time?