{"id":1474,"date":"2025-10-15T11:26:06","date_gmt":"2025-10-15T11:26:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/1474\/"},"modified":"2025-10-15T11:26:06","modified_gmt":"2025-10-15T11:26:06","slug":"how-shapiro-wants-to-reshape-the-regions-power-grid-operator-as-prices-rise","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/1474\/","title":{"rendered":"How Shapiro wants to reshape the region\u2019s power grid operator as prices rise"},"content":{"rendered":"

Spotlight PA<\/a> is an independent, nonpartisan, and nonprofit newsroom producing investigative and public-service journalism that holds power to account and drives positive change in Pennsylvania. Sign up for our free newsletters<\/a>.<\/p>\n

HARRISBURG \u2014 As electricity prices rise<\/a> in Pennsylvania and across the country, Gov. Josh Shapiro is publicly blaming the region\u2019s power grid operator and pushing for changes that would give the state more of a say in its governance.<\/p>\n

Last month, Shapiro said that PJM Interconnection had \u201cmonths, not years\u201d to make changes, or else \u201cPennsylvania will go its own way\u201d \u2014 in other words, leave the grid.<\/p>\n

Doing so would probably require the consent of the legislature, experts told Spotlight PA, and appears unlikely to happen. No state has left PJM in the grid operator\u2019s nearly hundred-year history.<\/p>\n

But Shapiro\u2019s other asks \u2014 additional board input and the ability to directly propose policy to the feds \u2014 are more feasible.<\/p>\n

PJM\u2019s nine-member board could choose to voluntarily accept these changes, as it faces increasing pressure from unhappy governors and growing electricity demand driven by the proliferation of massive data centers necessary to power artificial intelligence.<\/p>\n

Shapiro\u2019s latest big statement of values on energy came at a September summit<\/a> of the 13 states, including Pennsylvania, that use PJM.<\/p>\n

\u201cLet\u2019s face it: Change is needed to keep energy costs low, bring new energy generation onto the grid more quickly, and meet the needs of the 67 million Americans who rely on this grid for everything from running a business to keeping the lights on at home,\u201d Shapiro told the crowd.<\/p>\n

After his speech, the governor told reporters, \u201cI think governors and our representatives need to have a seat at the table, be represented on the board in a reform leadership structure. \u2026 These reforms are going to be necessary for Pennsylvania to remain part of PJM.\u201d<\/p>\n

This isn\u2019t the first time Shapiro has expressed qualms about the way the grid is operating.<\/p>\n

Last winter<\/a>, he filed a lawsuit against PJM alleging that the grid operator caused unnecessarily high energy prices. His fundamental concerns then are similar to his current ones: He thinks PJM has been too slow to approve the building of new energy generators.<\/p>\n

Growing energy demand has become a national problem as data centers spring up across the country.<\/p>\n

According to the U.S Department of Energy<\/a>, these data centers accounted for about 4.4% of electricity use nationwide in 2023, but that number is projected to jump to between 6.7% and 12% by 2028.<\/p>\n

In Pennsylvania, the state utility commission has warned consumers<\/a> to expect a spike in electricity bills. One report<\/a> projected an annual increase of $130 per Pennsylvania household by 2030.<\/p>\n

How could states gain more control over PJM?<\/p>\n

As Pennsylvania\u2019s grid operator, PJM manages the flow of electricity from power generators to local utilities. This includes running capacity auctions, where electricity suppliers and utilities buy and sell power to meet current and future demand.<\/p>\n

These capacity auctions have been a frequent subject of scrutiny in recent months, with Shapiro and other PJM critics expressing frustration with the grid operator.<\/p>\n

PJM\u2019s role in the auction is to regulate the market, which includes capping the price per megawatt that utilities have to pay to procure energy. These price caps are traditionally determined based on factors like power plant retirements and the cost required for a new energy provider to join the grid, and in recent years, the caps have risen<\/a>. Last year\u2019s auction saw a landmark spike in the prices utilities paid for energy \u2014 a whopping 800% over the previous year<\/a>. That leads to higher consumer prices.<\/p>\n

In his lawsuit last year, Shapiro argued that PJM was partly at fault for these price hikes because it had been slow to approve new producers. He argued the grid operator should set a lower price cap to prevent more of these high costs from being passed to consumers. They ended up settling the suit, with PJM agreeing to a lower price cap<\/a>.<\/p>\n

As consumers prepare for rising electricity bills, Pennsylvania debates whether more solar power could help<\/a><\/p>\n

The rules for this kind of market are developed through a stakeholder process involving PJM\u2019s hundreds of members, who are primarily entities involved in energy production and distribution<\/a>.<\/p>\n

These members also select PJM\u2019s independent, nine-person Board of Managers, which ultimately approves, modifies, or rejects the full membership\u2019s proposed regulatory changes.<\/p>\n

The current board<\/a> is a mix of economists, attorneys, consultants, engineers, and CEOs with long histories in the energy industry.<\/p>\n

Shapiro wants state officials to be more involved in the selection process for this group so they can make sure a board member represents their specific interests. That representative, Shapiro told reporters at last month\u2019s PJM summit, would focus on consumers, local businesses, and economic development in states, and push the board to \u201cmake different decisions with greater sensitivity to the needs of our respective states.\u201d<\/p>\n

\u201cWe need to be in the room to make sure our citizens have a seat at the table,\u201d Shapiro said in his summit speech. \u201cWe\u2019ve got different perspectives when it comes to these problems. I\u2019m on the government side, trying to make sure Pennsylvania consumers have reliable access to affordable energy.\u201d<\/p>\n

This wasn\u2019t the first time Shapiro has expressed frustration over the makeup of PJM\u2019s board. Last August, he and Virginia Gov. Glenn Youngkin wrote<\/a> to PJM to recommend candidates to fill board seats.<\/p>\n

When PJM later nominated other candidates, Shapiro and Youngkin were joined by five other governors in a letter<\/a> to criticize the nominating committee\u2019s disregard of their recommendations, saying that it indicated that their \u201cconcerns for their consumers are not being taken seriously.\u201d<\/p>\n

But not everyone thinks that approach, in which PJM gets a board member more responsive to state concerns, would do much. Todd Snitchler, CEO of the Electric Power Supply Association, a national trade association, said not all states on the grid \u2014 which ranges from New Jersey to West Virginia to parts of Michigan and Indiana \u2014 have the same concerns as Shapiro.<\/p>\n

\u201cYou end up with competing state-level interests,\u201d Snitchler told Spotlight PA. \u201cIf you take someone that\u2019s on the far left and the far right and you add them to the board, I continue to be flummoxed as to how that is going to help advance policy discussions.\u201d<\/p>\n

Kent Chandler, an energy researcher at the free-market think tank R Street and a former utility regulator, said he was skeptical that PJM\u2019s larger membership would agree to Shapiro\u2019s ask.<\/p>\n

He told Spotlight PA that while some PJM members agree with Shapiro\u2019s diagnosis of its challenges, they remain skeptical about adding representatives of Shapiro or other governors to the grid operator\u2019s governance structure.<\/p>\n

\u201cI would say that I have a better chance of winning the lottery. And I don\u2019t play the lottery,\u201d Chandler said of Shapiro\u2019s request.<\/p>\n

More representation on PJM\u2019s board isn\u2019t Shapiro\u2019s only idea. Another possibility his administration has raised is expanding states\u2019 ability to file proposals with federal energy regulators.<\/p>\n

States can already file complaints with the Federal Energy Regulatory Commission (FERC) to challenge PJM\u2019s rules, as Shapiro did in his suit against PJM last December. In these cases, states must demonstrate that existing rules are unjust or unreasonable and may propose alternative ones for FERC\u2019s consideration, though FERC is not obligated to adopt them.<\/p>\n

These filing rights could be expanded to allow states to propose new rules to FERC without first having to prove that the current rules are unfair, which would lower the burden of proof for states.<\/p>\n

For example, rather than disputing that the capacity market was unfair and suggesting a new way to calculate the price cap, as he did last winter, Shapiro could suggest a new price cap to federal regulators.<\/p>\n

Joshua Macey, a professor at Yale Law School who specializes in energy law, said states are currently unable to \u201cpropose the rules you want directly,\u201d and instead are \u201calways responding to PJM.\u201d He said giving states or their representatives these expanded filing rights creates more avenues for change.<\/p>\n

Of Shapiro\u2019s other idea for more PJM board representation, Macey said he thinks it \u201cwould be extremely useful\u201d but didn\u2019t think it would \u201cwould fix all of these problems.\u201d<\/p>\n

\u201cThe filing rights approach would be a nice complement, because it would give states a direct line to fixing how the Mid-Atlantic grid works,\u201d he added.<\/p>\n

As with board representation, PJM could voluntarily choose to grant states these expanded filing rights. The grid could also be mandated to take this step if PJM\u2019s members formally voted to approve the change in the grid operator\u2019s governance documents and PJM\u2019s board accepted the proposal. The latter route seemed less likely, experts told Spotlight PA, since it depends on the agreement of so many entities.<\/p>\n

Macey added that other grid systems have already given member states similar filing rights. In California\u2019s and the Midwestern grids<\/a>, states can already file proposals to federal regulators.<\/p>\n

BEFORE YOU GO\u2026 If you learned something from this article, pay it forward and contribute to Spotlight PA at spotlightpa.org\/donate<\/a>. Spotlight PA is funded by foundations and readers like you<\/a> who are committed to accountability journalism that gets results.<\/p>\n

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