Governor Threatens to Pull PA from PJM Grid
For the first time in 20 years, electricity demand is surging in PJM due one type of industry: data centers. Lawmakers now face the challenge to keep power reliable and affordable for consumers. In September, governors from eleven PJM states came together in Philadelphia. They met in a bi-partisan forum to demand more say in how PJM runs their electric grid. PA Governor Shapiro put the case bluntly. If they can’t find a way to lower electricity rates, his state would leave the PJM interconnection. Though that sounds bold, it’s not so easy as that.
Governors Demand Bigger Role in PJM
Unlike other grid interconnections such as the SPP and the MRO, states in the PJM grid lack a formal role in saying how their grid operates. And with the last two PJM capacity auctions resulting in skyrocketing prices across the 13 states it services, the states are demanding more authority. In July of this year, nine governors sent a letter to PJM last week asking for the power to nominate candidates to fill two seats on PJM’s Board of Managers. PJM rejected the idea. As a result, Shapiro has threatened to leave PJM if reforms aren’t made. Several other governors, notably Virginia’s Governor Youngkin, have said their states would assess the idea.
The frustration with PJM did not stop there. On September 29, the National Caucus of Environmental Legislators sent a letter to PJM signed by 107 lawmakers urging the grid operator to speed up its deployment of renewable energy projects. Lawmakers are also demanding that PJM comply FERC Order 2023 to speed up its generator connection process.
PJM and Others Address Governors on Reforms
PJM CEO Manu Asthana addressed the recent reform demands and supply challenges. He stated that the states need to focus on issues under their control if they want to see lower prices. “We can do whatever we want in the [wholesale power] markets, but if our [power] plants run into a hostile siting and permitting regime, they will not get built.” He also pointed out that PJM had made great progress on connection queue reform.
Moreover, the Electric Power Supply Association has sided with PJM, arguing that the grid’s aging infrastructure and state policy mandates are increasing costs that drive prices across the nation. They argue state utility commissions can liaison with it through the Organization of PJM States Inc. (OPSI). This would leave PJM non-partisan.
All the same, the issue has become even more politically polarized. PA Republican Senator Scott Martin stated recently that “It is beyond frustrating to hear Governor Shapiro continuing to make our regional grid operator a scapegoat for his poor energy policies.”
Will PA Leave PJM?
Despite the threats, for any state to actually leave PJM would not be an easy task. The states themselves are not members. Rather, it’s up to the utilities run the grids to choose what RTO/ISO grid they will join. To leave, PA would need to either draft laws forcing utilities to leave, or use the PA PUC. The utilites do have the option of leaving on their own. However, that comes with its own set of challenges. So, leaving the PJM electrical grid could, at least temporarily, cause prices to spike further.
Save on Rising Electricity Rates
Certainly there’s no easy solution, and it remains to be seen how these reform demands may play out. At any rate for PA electric customers, rising energy demand could see utility PTC rates rise this winter.
That’s why it’s more important now than ever to shop and save on your electricity. And you can find the best plan for your home with us. Compare rates, read reviews, and more. Visit https://www.paenergyratings.com to see the electric plans in your area.