On Friday, a joint letter was issued by the governors of New Jersey, Pennsylvania, Illinois, Maryland, and Delaware to PJM Interconnection. The letter urges the grid operator to address rising electricity costs following record-high prices in the region's capacity auction.
The governors expressed concerns about how these high prices could impact economic development and hinder progress toward renewable energy goals. They highlighted flaws in the auction rules that contributed to these increased costs and suggested several reforms.
The proposed reforms include ensuring capacity from Reliability Must Run units is included in future auctions, eliminating certain exemptions for intermittent generation resources while protecting them from penalties, lowering the capacity price cap to previous levels, reviewing recent accreditation changes, and implementing a sub-annual capacity market.
Governor Phil Murphy stated, "PJM must take action now to address record high prices," emphasizing New Jersey's efforts to bring new resources to market and make electricity more affordable. Governor JB Pritzker of Illinois noted that "PJM’s record-high price increases showcase a complete disregard of vulnerable communities across state lines."
Pennsylvania Governor Josh Shapiro highlighted his state's role as an energy leader and called for comprehensive steps by PJM to manage increasing demand. Maryland Governor Wes Moore stressed the need for collaboration with PJM to relieve families from high prices while building a reliable clean energy future.
The governors also urged PJM to improve its interconnection process for new power generation projects. Many proposed projects have faced delays due to this lengthy process, contributing further to high prices and impacting economic growth.
State leaders are working together with stakeholders and public utility commissions to ensure necessary changes are made for improved capacity management and long-term affordability.
