Electricity Costs on the Rise: Pennsylvania Governor Takes Action
Pennsylvania Governor Josh Shapiro is taking a stand against soaring electricity costs by filing a complaint with the Federal Energy Regulatory Commission (FERC) against PJM Interconnection, the largest power grid operator in the United States. Shapiro argues that PJM’s market rules must be changed to prevent a significant increase in electricity bills for millions of Americans.
A Failing Capacity Market
PJM Interconnection, which serves over 65 million people across 13 states, has faced intense scrutiny since July when it announced that its annual capacity auction would result in record-high payments to power plants. Shapiro’s complaint asserts that PJM’s capacity market is currently failing, with a price cap that is unreasonably high and threatens to add billions of dollars to power bills without substantially increasing grid reliability.
Billions of Dollars at Stake
If PJM’s market rules remain unchanged, ratepayers across the region could see a staggering $20.4 billion increase in costs. This is a result of PJM agreeing to pay power generators nearly 900% more than it paid the previous year, citing tightening power supplies and rising electricity demand. Homes and businesses in PJM’s territory will likely bear the brunt of these increased costs.
A Supply and Demand Problem
According to PJM spokesperson Susan Buehler, the root of the problem lies in policy choices that are pushing resources off the system, combined with growing demand from data centers and electrification. This supply and demand imbalance is driving up consumer prices. Shapiro’s complaint aims to address these underlying issues and prevent a significant hike in electricity costs for millions of Americans.
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