Wednesday, March 20, 2019

GT Power Group’s Dave Pratzon Retiring

By Rory D. Sweeney

Dave Pratzon

It’s the end of an era at PJM: Following the Dec. 20 Markets and Reliability Committee meeting, GT Power Group’s Dave Pratzon will call it a career after 45 years.

Over that time, Pratzon has seen many of the biggest changes to the electricity industry from the trenches, having been involved in developing a number of the processes and rules that would eventually make up the grid and its markets as they are today.

“I care about the success of the enterprise. I want to deploy myself to the end,” said Pratzon, who turns 68 later this month.

A Fate-full Career

Pratzon describes his career as “an accident of fate,” or more accurately, a series of them, starting with how he got into the power business in the first place. While he went to college to become an electrical engineer, he spent his summers laboring at a local steel mill near his home in Wallingford, Conn. However, the job was threatened each year by union unrest or overproduction at the mill. He took the suggestion of a college friend from Philadelphia to join him in seeking summer employment with the Philadelphia Electric Co. (now PECO) and found himself working on substations.

Upon graduation, he attempted to land a full-time position at the utility, only to have the offer rescinded at the last moment. Scrambling, he found work near San Francisco as a field engineer for nuclear submarines. On a trip back East to propose to his  fiancée, Gail, and pick up a car,he happened to swing back through Philadelphia and stop in PECO’s offices.

“You got my letter!” a former supervisor said upon greeting the bewildered Pratzon.

“I’m just driving through,” he responded.

The boss said they were trying to contact him about a job opening and asked if he had time to interview.

“Sure,” Pratzon said, “as long as it’s today.”

The company’s response traveled faster to his West Coast home than he did.

“By the time I got there, there was the letter with my official offer,” Pratzon said.

He quit the submarine job, partially to move back closer to home but also because part of his job would have involved “sea trials” of the ships, and he realized he’s claustrophobic.

“I could never survive out there for a week or two under water in steel containers,” Pratzon said. “I was happy to come back. … It was kind of a step back to the East Coast that I figured would be another temporary position on my way back to New England.”

It would be his last major move.

“My wife and I, being New Englanders, thought this would be a temporary job before moving [back] up there, but 45 years later, we haven’t left yet,” Pratzon said.

Gail became a librarian and helped found the public library in their town, Lower Providence Township.

“Opportunities have come for both of us,” he said.

PJM Work

From his first day at PECO, Pratzon was heavily involved with PJM. PECO supplied PJM’s staff for the first several decades after its founding, and Pratzon worked for the grid operator from 1973 to 1991 before being transferred to PECO as a “broadening” assignment. He was the first secretary of PJM’s cost-development subcommittee in the mid-1970s and helped develop the initial market rules that he jokes PJM Independent Market Monitor “Joe Bowring may or may not like right now.”

Pratzon’s career was a period of change for both the industry and PJM, which began transitioning to an independent organization in 1993. In 1997, it opened its membership to non-utilities and elected an independent Board of Managers.

“The market was very different when it was just the eight companies dealing with each other,” he said, referring to PECO, Public Service Electric & Gas, Pennsylvania Power & Light, General Public Utilities (GPU), Baltimore Gas & Electric, Potomac Electric, Atlantic City Electric and Delmarva Power and Light.

The first major transition occurred during the Three Mile Island crisis, when plant owner GPU began searching for power supplies outside of the other seven utilities in PJM at the time. Up until then, the companies had bought and sold amongst each other with PJM determining which plants would run to provide all of the power necessary at the cheapest overall cost.

Each day, the companies would submit their projected costs to run each plant the following day. If one company’s plant would cost more to run the next day than those of other companies, PJM would dispatch the cheaper plant to cover the demand and charge the company with the more expensive plant half of the difference between the plants’ costs in an accounting method known as “split savings.”

But GPU’s alternative during the TMI crisis was combustion turbine plants, which were experiencing a crisis of their own during the oil shortages of the 1970s. Using the expensive CTs as the baseline cost under the split savings method would have cost GPU a fortune, so the company sought alternatives outside of the PJM ring. It was controversial and “unheard of at the time,” Pratzon said, at least partially because the other companies anticipated the profits they might make from GPU’s problems.

GPU, however, saw external tie lines that weren’t being used. “They were the first PJM utility to go out on their own,” he said.

Another blow to split savings occurred when merchant generators entered the market thanks to open-access transmission lines and subsequently refused to share their cost information.

By the time PJM began working on its locational marginal pricing proposal, Pratzon had left the grid operator and was working at PECO.

From 1992 through 2002, he advocated for PECO’s interests, including testifying at FERC in opposition to LMP. PECO at the time thought a bilateral-contracting approach would be more profitable. Pratzon was also involved with developing the wholesale market participation rules for competitive suppliers in Pennsylvania, the first state in PJM to adopt retail customer choice.

While “in the beginning, a lot of [his work at PECO] was reactionary” to what was happening in the industry, the company soon started to notice opportunities, such as selling the excess generation from its Limerick 2 nuclear plant into PJM’s markets after its failed effort to get Pennsylvania Public Utility Commission approval to include it in ratepayers’ bills.

Those experiences precipitated PECO forming a Power Team to market the excess power. “If you can’t beat them; join them,” said Pratzon, who was on the team from 2002 to 2012.

Exelon’s merger with Constellation in 2012 moved the Power Team to Baltimore. Instead of moving further from his New England roots, Pratzon lit out on his own and eventually joined with former Pennsylvania PUC Chair Glen Thomas’ GT Power Group, which already represented the PJM Power Providers group known as P3.

While Pratzon did testify at the PUC during Thomas’ tenure as the commission’s chair, they had never met.

“I don’t remember him being there; he doesn’t remember me testifying,” Pratzon said. “He heard about me through mutual acquaintances.”

Enjoying Every Minute of It

Even as his time has been wrapping up, Pratzon has remained active and vocal in stakeholder meetings.

“I’ve loved every minute of it,” he said. “It’s never the same thing twice. … I’ve invested so much of my work career into PJM and trying to help and resolve [issues].”

He hopes to have brought an attitude to the process of “trying to understand and respect the views and positions and needs of the many stakeholder groups and trying to find solutions that will help the market thrive.”

“I think … there is maybe now less of the collaborative spirit than there has been [at] times in the past. I’m not sure I can put my finger on why,” he said. “I’ll miss being part of the hopeful solution.”

PJM is a “good atmosphere to try to resolve the new issues as they come up” because while the RTO “has the hammer” to implement rules as it sees fit, it “respects and listens to stakeholder input.”

“It happens in PJM more than perhaps in any other RTO,” Pratzon said.

So why leave now?

“I feel like I have to be all-in” to do this work, he said, and to do less “would feel like dabbling.”

Instead, he’s becoming a “full-time project manager” for three months to renovate his kitchen and plans to spend more time with his three- and six-year-old grandchildren.

Traveling is in the works “to get around and see more of the world than we have in the past,” and he’ll be volunteering with an elder support group in town to meet more people and aid those who might otherwise be lonely.

Still, the stakeholder process and what it means won’t ever be far from his mind. In breaking the news of his retirement to industry colleagues, Pratzon has become fond of making a final request:

“Just remember: Keep the lights on for me now that I’m just a retail customer!”