(The Center Square) – Thirteen states trade energy back and forth to keep the lights on for 67 million people living within PJM’s power grid, the largest in the nation.
For Gov. Josh Shapiro, however, there’s not enough government representation at the table. As such, he says, the decisions the organization makes consider consumers last, and he wants a change.
Soon.
“Months, not years,” Shapiro said during a news conference Monday in Philadelphia for a meeting of the states in the power grid: Pennsylvania, New Jersey, Maryland, Virginia, Delaware, West Virginia, Ohio and parts of North Carolina, Kentucky, Michigan, Indiana, Tennessee and Illinois.
“PJM has largely been a black box and they’re too damn slow and their system and processes are not working to meet the needs of our states’ citizens,” he said. “I think you need more of a direct connection to those who are representative of the people of their respective states.”
He’s not the only governor frustrated by the power grid operator’s complex set of rules and approvals to get new power projects operational. Without enough supply, power becomes less reliable and more expensive. The growth in demand, particularly from artificial intelligence data centers, means pushes the grid to its limit.
And new projects are in the works: repurposed nuclear and natural gas plants and wind and solar farms await approval, often a years-long timeline complicated by permits, studies, and intergovernmental cooperation.
Without changes to PJM’s governing body to include state representation, fixes to speed up its approval process and more consideration of consumer impact, Shapiro said the commonwealth will take its own path.
“This is not a partisan issue at all,” he said. “This is something we are all concerned about. We need states to have more of a say in how PJM operates. We need to move more quickly on these energy-producing projects and we’ve got to hold down costs. If PJM cannot do that, then Pennsylvania will look to go it alone.”
The step would be unprecedented. PJM traces its history to 1927, when utility companies in Pennsylvania and New Jersey banded together in a first-of-its-kind power pool. Over the intervening 100 years, the organization grew its footprint across 13 states in the mid-Atlantic and Midwest, becoming the largest power grid operator in the country.
Pennsylvania is the “P” in PJM, at least for now, and its where 25% of the power necessary to run the grid is generated.
Shapiro suggested leaving the grid in February after he filed a complaint with federal regulators to compel PJM to adjust the math used in its power pricing auctions and speed up the approval of new energy projects.
Without the action, the cost to run the power grid would have climbed 800% on June 1, meaning utility bills will skyrocket by roughly 30%, according to multiple estimates. Democratic governors in four other states in the power grid’s territory, as well as consumer protection organizations, backed the complaint. Eventually, PJM submitted a price cap adjustment that would lower the cost from $500 per megawatt day to $325.
“It shouldn’t take going to court to have our voices and the voices of 67 million who are served by the PJM grid heard by PJM’s leadership,” Shapiro said Monday. “We need to be in the room to make sure our citizens have a seat at the table.”
The organization, however, can only plan within the parameters set by state and federal governments. That is, thick red tape and tax breaks meant to incentivize the development of new power producers – as critics and independent market monitors have warned – appear to have accelerated the retirement of fossil fuel plants faster than developers can get renewable replacements up and running.
Those challenges, in part, fueled the dramatic rise in the grid’s operational costs.
Critics point out that Shapiro’s own energy policies contribute to the problem.
“Gov. Shapiro and other politicians are attempting to find a useful scapegoat to distract from their own bad policies that are contributing to higher electricity rates,” said Elizabeth Stelle, vice president of policy at The Commonwealth Foundation. “PJM must operate within the confines of bad state policy. When restrictive policies tighten the energy supply, prices rise—the exact scenario we saw play out this summer.”
The foundation, a nonprofit that advocates for fiscal conservancy and has been critical of the impact of renewable energy subsidies on power prices, points to Shapiro’s support for a regional carbon tax plan called the Regional Greenhouse Gas Initiative, or RGGI, as undermining the ability to keep prices affordable.
“If Shapiro wants to deliver affordable and reliable energy, he must stop playing the blame game and start fixing what’s broken at home—rolling back costly regulations that delay energy projects, scrapping punitive energy taxes like RGGI, and creating an environment where responsible energy investment can thrive,” Stelle said. “Until then, families will keep paying the price for Harrisburg’s failures.”
