Governor Josh Shapiro of Abington Township announced today that his administration has reached an agreement with PJM Interconnection on a plan to resolve his recent lawsuit and to save consumers over $21 billion over the next two years, including an estimated $4.2 billion for Pennsylvania ratepayers.
Power grid manager PJM Interconnection, which supplies Pennsylvania, agreed to a new cap on certain power price hikes.
From the press release:
Left unaddressed, PJM’s next capacity auction scheduled for July 2025 would have resulted in billions in unnecessary energy costs for 65 million people across the region. The Governor worked with PJM to significantly lower the capacity auction price cap – from over $500/Megawatt-Day to $325/MW-Day – averting a runaway auction price that would have unnecessarily increased energy bills.
PJM operates a capacity market, which means that operators are paid to commit to providing energy in the future. Over the last several years, demand for energy has risen rapidly but PJM has been slow to allow new power sources onto its grid – and as a result, PJM capacity prices have skyrocketed. PJM’s 2025/26 capacity auction, held in July 2024, resulted in costs of $14.7 billion – an over 800 percent increase from the prior year.
The Governor pushed PJM to reduce their price cap, and a diverse coalition came together support the Governor’s message, including four governors, energy and consumer advocates, and the Organization of PJM States (OPSI). The Shapiro Administration’s energy leadership promises to save the PJM region over $21 billion on utility bills in the next two years.
PJM and the Shapiro Administration have agreed to a path forward for the complaint, subject to consultation with PJM members and the PJM Board of Managers. In order to avoid further delays to the auction schedule, PJM will soon seek a FERC order by proposing a cap and floor mechanism through an FPA section 205 filing with the FERC.
“When PJM’s next auction was set to result in historic price hikes, I filed a lawsuit to stop this price hike on consumers and defend Pennsylvanians,” Shapiro said. “PJM did the right thing by listening to my concerns and coming to the table to find a path forward that will save Pennsylvanians billions of dollars on their electricity bills.”
Shapiro filed a lawsuit in late December with the Federal Energy Regulatory Commission. The complaint is below:
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