Shapiro signs on to plan to slow rising PJM Electric grid prices

The Trump administration’s “energy dominance” council and a bipartisan group of governors, including Pennsylvania’s Josh Shapiro, unveiled a plan to address rising prices in the nation’s largest power grid.

Shapiro joined governors from Maryland, Ohio, and Virginia as well as U.S. Secretary of Energy Chris Wright, and U.S. Secretary of the Interior Doug Burgum to urge grid operator PJM Interconnection to hold an emergency auction for tech companies to bid on 15-year contracts for new electricity generation capacity.

In signing a Statement of Principles, the governors and the council agreed to advance a coordinated plan to reform PJM Interconnection, accelerate the construction of new energy generation, and protect families and businesses from rising electricity costs. 

The group of bipartisan officials is pushing PJM to adopt rules that would get more power on the grid as quickly as possible — without passing new costs onto consumers who are already struggling with higher grocery, housing, and energy bills. The principles provide consumers critical protection by extending for two more years the price cap that Governor Shapiro won after he sued PJM in 2024 to stop unjustified price hikes. Shapiro made clear that his involvement in the meeting was contingent on extending the price cap he negotiated following his lawsuit — ensuring consumer protections remained at the center of all discussions.

If implemented as proposed, the extended price cap would save more than 67 million consumers — including 13 million Pennsylvanians — within the PJM region approximately $27 billion over the next two years with $5 billion in Pennsylvania alone.

The move is in response to growing concerns that power demand emanating from the data center sector is far outpacing supply across the PJM market. PJM, which serves 13 states across the Mid-Atlantic and Midwest, recently announced that its summer peak load will grow by 3.6 percent a year to about 222GW by 2036, driven predominantly by data center growth.

The governors’ signatures bring the total on board with the Principles to 13, underscoring broad bipartisan support for extending the price cap and advancing PJM reform.

“For two years, I’ve been sounding the alarm, explaining that without fundamental changes to PJM — Pennsylvanians were going to be paying more and more, and getting nothing in return,” said Shapiro. “I sued PJM when they refused to act and secured a price cap that saved consumers tens of billions of dollars on their energy bills. Since then I’ve been working with my fellow governors and federal energy officials to push PJM to make needed reforms, and I’m glad the White House is following Pennsylvania’s lead and adopting the solutions we’ve been pushing for — including the extension of the price cap that I insisted be included today. In Pennsylvania, we’ve been focused on creating more energy, permitting faster, and protecting consumers — we’re showing what’s possible when government leads the way and gets stuff done.”

The Statement of Principles being advanced would require PJM to:

• Trigger a special “backstop” capacity auction offering generators up to 15-year commitments to accelerate the construction of new power plants
• Allocate the cost of those long-term contracts to data centers and new large users that have not brought their own power — instead of shifting those costs onto households and small businesses
• Significantly accelerate PJM’s interconnection process, including a firm 150-day deadline and expedited treatment for shovel-ready projects
• Launch a new PJM process to deliver long-term market reforms while extending Governor Shapiro’s negotiated price cap for the next two auctions

“We are addressing serious market failures in PJM,” the administration said in a fact sheet, citing “energy subtraction policies that forced the shutdown of power plants in PJM that were needed for grid resource adequacy, reliability and stability.”

The grid operator serves more than 67 million people from the Mid-Atlantic to the Midwest. It wasn’t invited to Friday’s event with the administration and governors.

Instead, PJM said in a statement that its board plans to issue a decision later Friday on integrating data centers and other large electricity-load additions to the grid.

Electricity analyst Rob Gramlich, president of Grid Strategies LLC, told Axios it isn’t clear “how this new program would actually work or fit into existing electric industry structure and state and federal law and regulations.” It could require “significant changes to federal and/or state law,” he added.

“The line for energy projects to connect to the power grid in the Mid-Atlantic has basically had a ‘closed for maintenance’ sign up for nearly four years now, and this proposal does nothing to fix that — or any of the other market and planning reforms that are long overdue,” said Jon Gordon, director of Advanced Energy United, which represents energy companies and corporate buyers across clean-energy sectors.

Any emergency auction would need to be approved by the Federal Energy Regulatory Commission. At her first open meeting as FERC Chairman in November, Laura Swett said connecting data centers to the grid was her top priority along with ensuring grid reliability at reasonable rates.

Steve Ulrich is managing editor of Politics PA.