Excerpt: Andy Ott at CERAWeek 2019

PJM's CEO Andy Ott spoke at CERAWeek in Houston at the panel "Wholesale Power Market Evolution" on March 14, 2019:

"The point is, we really depend on the market to make sure we sustain resource adequacy. Even though we're in an oversupply. So having, essentially, this effort, whether it be renewable or nuclear subsidies. Certainly if enough of it occurs, I think it really calls to question, can you really have a what I'll call a short-term capacity market that is driving competition? And I think my answer is probably not. 

"I think what we need to do then is flip to more of a procurement model. Where we essentially do the same thing that states are doing. Except we up and do it as a regional operator on behalf of the rest of the load in the states. And basically say, okay we're putting out whatever, seven-year contracts for, pick your resource.

"So that's what would happen. And you'd essentially evolve. Either that or all the states would have to re-regulate. In other words, take back, if you will, and re-regulate generation. Either way would work. But I think at some point you'd probably say a short-term capacity market being two or three or four-year forward, like we have, probably isn't going to sustain if you have too much of this. 

"So we'll see how it goes. Certainly not saying that the market will collapse. But we've just changed the way we do resource adequacy. It would be somewhat less competitive and more expensive than before. So that's really the outcome."