Shapiro announces agreement with PJM to prevent unnecessary price hikes

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Governor Josh Shapiro announced Tuesday he has reached an agreement with PJM Interconnection on a plan to resolve his recent lawsuit and to save consumers more than $21 billion over the next two years.

“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 in a statement. “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. My administration will continue to work to ensure safe, reliable, and affordable power for Pennsylvanians for the long term.”

In December, Shapiro filed a lawsuit with federal energy regulators to prevent energy price hikes on 65 million consumers, including 13 million Pennsylvanians. Shapiro’s complaint filed with the Federal Energy Regulatory Commission (FERC) against PJM Interconnection, criticizing flaws in PJM’s capacity auction design that threatened to impose significant new price increases. According to a release, the agreement will avoid historic price hikes on consumers across all 13 states PJM serves, including Pennsylvania.

Per the release, PJM’s next capacity auction scheduled for July would have resulted in billions in unnecessary energy costs for 65 million people across the region. Shapiro worked with PJM to significantly lower the capacity auction price cap – from over $500/Megawatt-Day to $325/MW-Day – and averting a runaway auction price that would have unnecessarily increased energy bills.

Evergreen Action Deputy State Policy Director Julia Kortrey issued a statement responding to the news that PJM has reached a tentative settlement with Shapiro.

“Today’s settlement announcement is a major victory for consumers across the region. It shouldn’t have taken a lawsuit and threats to leave PJM for the organization to prioritize protecting ratepayers, but we’re deeply grateful for the leadership of Governor Shapiro and other governors in PJM states who supported Pennsylvania’s complaint against this capacity auction,” Kortrey said.

“Today’s victory will provide necessary short-term relief, but the work here is not done. PJM needs to undertake major reforms to address its current interconnection crisis and get on with the important business of rapidly connecting cheaper clean energy to the grid so we actively address the energy cost and demand crisis.”