Governors call on grid operator to take action amid record high power plant prices

Five Democratic governors are calling on the nation’s largest grid operator, PJM Interconnection, to change the process it uses to determine the price paid to power plants after record high prices in the last auction.

In a joint letter to PJM last week, Govs. John Carney of Delaware, JB Pritzker of IllinoisJosh Shapiro of Pennsylvania, Wes Moore of Maryland and Phil Murphy of New Jersey called for the grid operator to take urgent action after the latest capacity auction in July for 2025 and 2026 showed prices that were 833% higher than the previous year , referring to the fall. supply and increased demand.

The governors said the results of the capacity auction will cost homes and businesses in the 13 states and the District of Columbia served by PJM $14.7 billion.

“Urgent action is needed to prevent customers paying billions more than necessary,” the group said.

Illinois Governor JB Pritzker attends the Clinton Global Initiative 2024 Annual Meeting at the New York Hilton Midtown on September 24, 2024 in New York City. Pritzker joined four other Democratic governors in calling for PJM to make several changes after (John Nation/Getty Images)

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Governors have asked PJM to increase the number of plants it auctions to increase the available supply calculations used to set prices, encourage more renewable energy electricity production and reduce the maximum price for capacity, among other requests.

Democratic governors from five states are pressuring PJM to make changes after the grid operator’s latest auction resulted in record prices paid to power plants.

The prices have raised concerns about increased electricity bills for everyday homes and businesses in the grid operator’s territory, and prompted environmental groups including the Sierra Club, Earthjustice and the Natural Resources Defense Council to file a complaint about PJM’s rate-setting process.

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PJM asked regulators to delay the 2026/27 auction for about six months to consider a complaint against it. A group of governors said they supported the delay.

The network operator stated that it had constantly warned about this state policy measures to move away from fossil fuel power generation before adding new clean power generation could lead to a supply crisis.

A wind turbine spins in rural Lee County on March 27, 2024 in Illinois. Grid operator PJM says it has repeatedly warned that moving away from fossil fuel power generation before developing cleaner energy sources would lead to supply shortages. (Stacey Wescott/Chicago Tribune/Tribune News Service via Getty Images/Getty Images)

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“Our state leaders are critical and we value their input as we work to balance the need for an investment signal for a new generation with the need to keep prices affordable for consumers,” PJM spokesman Jeff Shields said in an email to Reuters. “Our states also play a critical role in the policy decisions they make that directly affect supply and demand in our system,” he added.

Reuters contributed to this report.