(The Center Square) – With the state’s notoriously cold winter just around the corner, Illinois Gov. J.B. Pritzker has joined a group of governors now demanding that grid operator PJM Interconnection take steps to address its record-high electricity rates.
Pritzker recently joined Pennsylvania Gov. Josh Shapiro, New Jersey Gov. Phil Murphy, Maryland Gov. Wes Moore and Delaware Gov. John Carney in penning a letter to PJM that addresses the impact the development is having on consumers following the region’s capacity auction.
“No one should have to worry about not being able to afford their electricity bill, especially as we approach colder months,” Pritzker said in a news release. “PJM’s record-high price increases showcase a complete disregard of vulnerable communities across state lines and they must take swift action to prevent our residents from paying billions more than is necessary.”
Energy scientist and Federal Energy Regulatory Commission complainant Mike Jacobs joins the governors in openly questioning how long such a system is sustainable.
“The PJM organization operates with very little government supervision and we have some strange state and federal dynamics that work when the state leadership in the governor’s offices brings this kind of letter forward,” Jacobs told The Center Square. “PJM runs an auction normally once a year that puts those prices in place. The new auction results were $12 billion higher and they were rushing forward to create another auction in January.”
For the 2025/2026 Delivery Year, clearing prices have now jumped to rates nearly 10 times higher than the year before, again prompting Jacobs to sound the alarm.
“We already know the consumers in Pennsylvania, Maryland and New Jersey are going to pay at least $5 billion more in the coming year because of this,” he said. “Then, we are going to repeat that year after year for about three more years and that all comes out of consumers’ pockets and goes into the power plant owners’ pockets.”
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Among the reforms being proposed by Pritzker and the company are lowering the capacity price back to the level it was prior to recent market reforms, implementing a sub-annual capacity market that could reduce risk on transmission and ensuring that capacity from Reliability Must Run units is included in the next Base Residual Auction, which could save consumers as much as $5 billion.
The governors are also calling on PJM to adjust the years-long process that companies are required to go through in order to connect new power generation to the grid, essentially arguing a lack of competition also leads to higher prices and less economic growth.