The push for change at PJM
As we’ve discussed at length in previous newsletters, decisions made by PJM have a direct impact on your monthly electric bill, yet the average residential or small-business ratepayer has absolutely no say in how those decisions are made. For the past year, I have been working with the multi-state PJM Legislators’ Collaborative to change that.
Back in May, I met with FERC staff and members of the PJM board at PJM's Annual Meeting in Baltimore to press for PJM governance reform, for data center energy demand to be separated and removed from the regular capacity market, and for forecasting reforms to ensure that we identify and remove "phantom load" (speculative data center demand that may never materialize) from our energy forecasts.
That advocacy helped contribute to a FERC hearing in July to reform PJM's broken governance process and ensure that states and ratepayer advocates have a seat at the table. At the July hearing, FERC directed PJM to fix its slow, broken decision-making system by the end of September, or FERC would step in and fix it for them.
As part of its July ruling, FERC scheduled a dispute resolution process to push PJM and its members to find agreement with stakeholders on a path forward.
On Tuesday, I traveled to Washington, D.C. to participate in that process at an in-person discussion with PJM representatives, facilitated by FERC. Joining me to represent state legislatures in this discussion were my PA House colleague Representative Joe Webster, Delegate Lorig Charkoudian and Senator Katie Fry Hester from Maryland, and Virginia Senate Majority Leader Scott Surovell.
The PJM Legislators’ Collaborative is pushing for reform because the public and the public interest need to be at the center of the decision-making process at PJM. The days of running our electricity markets like a closed-door country club need to end, and to accomplish that, states need a formal committee at PJM.
My legislative colleagues and I are advocating for states to have:
- filing rights that allow us to submit regulatory proposals directly to FERC if PJM fails to act,
- a meaningful voice and vote in PJM decisions, and
- a public interest mandate and standard for our electric grid.
The information gathered through the dispute resolution sessions will inform further discussion between PJM and its stakeholders, and should result in a better, more transparent, and more efficient system, whether it’s PJM or FERC that ultimately imposes the necessary changes.
Speaking up for residential and small-business ratepayers
On Wednesday, I joined the Energy Efficiency Alliance to speak about the urgent need to make energy more affordable and ensure that PJM grid operations serve the public interest. We heard from small business owners whose skyrocketing electricity costs are affecting their ability to hire more staff, pay a living wage, or grow their business.
These rising costs all trace back to the decisions made at PJM. In every state in the PJM region, ratepayers are footing the bill for speculative data center demand. Yet PJM answers only to the energy generators and transmission owners who profit when the market stays broken, not to the ratepayers who feel the impacts.
Under the current PJM model, energy generators and transmission owners get paid the capacity auction clearing price for power they already have sitting on the grid. When speculative data center demand artificially inflates the forecast, the cost of electricity rises for every megawatt already on the system, whether that speculative load ever plugs in or not. Incumbent generators collect the higher price and hope real demand may never catch up, so they get paid a premium on energy they may never have to deliver.
Data center developers play a huge role in this scheme, shopping the same prospective project to multiple utilities across multiple states, sometimes under non-disclosure agreement (NDA), so no single regulator or grid operator sees the full picture.
As a result, PJM’s capacity auction price went from $29 per megawatt-day in the 2024-25 auction to $329 per megawatt-day for 2026-27, an eleven-fold increase in two years. Data center demand accounted for 63 percent of that increase, adding an estimated $9.3 billion in costs landing on regular ratepayers’ utility bills across the PJM region. When PJM tightened its vetting for the most recent auction, it accepted only 34 gigawatts of the nearly 60 gigawatts utilities submitted for 2030. That’s how much phantom load was sitting in the forecast, poised to drive up prices. But for the previous two capacity auctions, the higher price has already cleared. Ratepayers have already paid. No one is getting that money back.
This is why transparency at PJM isn’t optional; it’s the whole ball game. PJM’s slow decision-making process and closed-door, country-club-style governance structure have undermined states and overburdened ratepayers on issues of reliability, decarbonization, and affordability.
My Public Interest bill, HB 2184, would require the Pennsylvania Public Utility Commission to weigh the public interest when a utility decision affects rates, reliability, or the safety of our communities. This legislation would curb automatic or unchecked utility rate hikes by forcing the PUC to explicitly demonstrate how decisions align with consumer affordability, grid reliability, and public health.
The bill advanced through committee with bipartisan support, and we hope to see it pass the PA House this fall. But a state standard only goes so far if our regional grid operator is permitted to operate by a different set of rules.
Establishing a state committee within PJM would give state legislators, governors, and consumer advocates a formal seat at the table where decisions about the energy grid get made, so the public interest standard we’re pushing for in Harrisburg doesn’t stop at the state line.
Legislators, governors, consumer advocates, and small business and energy-efficiency advocates throughout the PJM region must work together to put the public interest at the center of our conversations and give everyday ratepayers a shot at having their interests prioritized, their rates protected, and their rights upheld.
See my remarks from Thursday’s EEA event at the link below, beginning around the 27-minute mark in the video: https://www.facebook.com/TheEEAlliance/videos/2536008476839848.