Pennsylvania Governor Josh Shapiro has filed a complaint with the Federal Energy Regulatory Commission (FERC), urging PJM Interconnection, the operator of the largest U.S. power grid, to reform its market rules to prevent skyrocketing electricity costs. PJM oversees electricity for over 65 million people across parts of 13 states, including Pennsylvania.
The complaint highlights issues with PJM’s capacity market, where a recent annual auction resulted in record-high payments to power plants, driving up electricity prices. Shapiro, a Democrat, argued that the current market rules could add as much as $20.4 billion to ratepayer costs without significantly improving grid reliability. The complaint also claims that PJM’s price cap is unreasonably high and contributes to inefficiencies in the market.
PJM’s latest auction saw payments to power generators increase by roughly 900% compared to the previous year. The grid operator attributed the price surge to tightening power supplies and rising electricity demand, driven by factors like policy changes, electrification growth, and increased data center usage.
Shapiro and the Commonwealth of Pennsylvania argued that PJM’s system is failing consumers. “It is difficult to escape the conclusion that PJM’s capacity market is currently failing,” the complaint stated.
PJM spokesperson Susan Buehler defended the organization, pointing to supply-demand imbalances as the primary issue. She cited resource shortages and growing demand from electrification and data centers as key drivers of rising prices.
If reforms are not enacted, residents and businesses across PJM’s territory could face significant financial strain. The case now awaits FERC’s review.
Also read: Free-Speech Advocates Urge SCOTUS to Strike Down TikTok Ban
