Gov. Shapiro secures deal to block electricity price hike of 'up to 300%'

Harrisburg, Pa. — The Federal Energy Regulatory Commission (FERC) has approved Gov. Josh Shapiro’s settlement with PJM Interconnection regarding electricity price increases. The governor’s office estimates that the settlement will save PJM’s coverage region over $21 billion over the next two years.

PJM’s next capacity auction, scheduled for July, was expected to cause increases of up to 300% for 65 million people. Gov. Shapiro filed a complaint against PJM in December 2024, calling the capacity auction design flawed and stating that the auction was set up to impose significant new price increases.

Gov. Shapiro’s complaint was supported by four other governors, energy and consumer advocates, and the Organization of PJM States. 

The governor and PJM reached an agreement in January to lower the capacity auction price cap by 35%.

“When PJM’s next auction was set to result in historic price increases, I took action to stop this price hike on consumers and defend Pennsylvanians,” said Governor Shapiro. “My Administration worked with FERC and PJM to find a path forward that will save Pennsylvanians billions of dollars on their electricity bills. I will continue to work to ensure safe, reliable, and affordable power for Pennsylvanians for the long term.”

Pennsylvania is a leading energy producer and the nation’s largest exporter of electricity, helping to establish PJM nearly 100 years ago. Demand for energy has risen rapidly over the last several years, and PJM has been criticized for an alleged reluctance to allow new power sources onto its grid. This slow adaptation is credited for capacity price rises.

The governor is also urging PJM to:

• Speed up their interconnection queue to get new projects online such as restarting Three Mile Island
• Rely on member states to help determine which projects are ready and to speed up project approvals
• Implement new best practices established by FERC to improve preparedness for extreme weather events
• Reform the capacity market to accurately reflect real-world conditions