The ISO’s In National News: Any State Regrets?
By Branko Terzic
The nation’s Independent System Operators (ISO) are garnering unwanted press at an accelerating rate. The national regional ISOs under Federal Energy Regulatory Commission (FERC) jurisdiction are the CAISO, ISO-NE, NYISO, PJM and SPP.
Today’s New York Times Business (6/12/25) page lead was “As Energy Costs Surge, Blame Falls on Grid Manager” by Ivan Penn. The article focuses on PJM’s public issues with state governors of Pennsylvania, New Jersey, Virginia and Maryland.
The reporter’s description of what PJM does is “…to oversee the flow of energy over transmission lines that carry electricity…” and “…devises and enforces policies about when and which types of power plants are added to the grid.” This misses the essential role of the ISO in operating the wholesale power markets whose prices add to the retail electricity rates paid by consumers.
The article focuses on the complaints of a number of governors about the purported impact of PJM decisions on electric rates. The cost of electricity in these states is said to have increased “23 to 40 percent over the past five years”, which is cited as much higher than over prior years.
Whether the cost increases in these states are a function of ISO decisions or follow changes in fuel prices and regulatory decisions to add investment for reliability and other purposes is not discussed. There is one quote from the outgoing PJM president Manu Asthana that “Prices are up because of tightening supply and demand driven by generator retirements and data center growth, and it's impacting consumers.” So, he asserts it’s not the results of PJM decisions.
One interesting point made is that “Even some governors and lawmakers acknowledged that they were not aware of how much influence the organization PJM had on cost and reliability of energy in the 13 states.” These are clearly not the same governors and lawmakers who decided in the 1990’s that their states should relinquish control of electric power generation to the federal government’s FERC by ordering their local electric utilities to sell their state-regulated power plants to independent power producers. While the power plants were under local electric utility ownership they were fully regulated by the Governor-appointed state public utility commissioners in these states. The state required restructuring of the electric industry in these states put the old power plants firmly under FERC jurisdiction and insured that new power plants would not be owned by state-regulated utilities and thus would also be subject to FERC jurisdiction.
This leaves the state governors with the role of intervenors in FERC proceedings along with other interested parties. That’s about all.
The Honorable Branko Terzic is a former Commissioner on the U.S. Federal Energy Regulatory Commission and State of Wisconsin Public Service Commission, in addition he served as Chairman of the United Nations Economic Commission for Europe ( UNECE) Ad Hoc Group of Experts on Cleaner Electricity. He holds a BS Engineering and honorary Doctor of Sciences in Engineering (h.c.) both from the University of Wisconsin- Milwaukee.
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