Pennsylvania Governor Complains to Regulator About PJM Energy Market Rules

NEW YORK (Reuters) – Pennsylvania Gov. Josh Shapiro filed a complaint with the federal energy regulator against PJM Interconnection on Monday, arguing that the largest U.S. power grid operator must change its market rules or risk rising electricity costs.

PJM Interconnection, which operates the electric grid covering more than 65 million Americans across parts of 13 states from Illinois to New Jersey, has faced increasing public scrutiny since July, when it said its annual capacity auction would result in record-high payments for power plants. In its system.

“It is difficult to escape the conclusion that the market for PJM’s production capacity is currently failing,” Shapiro, a Democrat and Pennsylvania commonwealth, said in the complaint filed with the Federal Energy Regulatory Commission.

The complaint argues, in part, that the market price cap for PJM’s capacity is unreasonably high and threatens to add billions of dollars to energy bills while failing to significantly increase grid reliability. If certain market rules remain in place, taxpayers across the PJM region could see an increase of up to $20.4 billion in costs, the complaint said.

In its latest annual auction, PJM agreed to pay nearly 900% more than it paid the previous year for power generators, attributing the price hikes to tighter power supplies and increased demand for electricity.

At least some of these costs will be paid by homes and businesses on PJM lands.

“Fundamentally, this is a supply/demand problem that drives up consumer prices, driven primarily by policy choices that push resources out of the system, along with the growth of data centers and electricity demand,” PJM spokeswoman Susan Buehler said.

(Reporting by Leila Kearney; Editing by Rod Nickel)