Governor Points to Rising Electricity Costs
Back in December 2024, PA Governor Josh Shapiro recently filed a lawsuit with the FERC against PJM to keep electricity rates low. The complaint states that the PJM capacity auction system is broken. As a result, rising prices could lead to over $20 billion in costs to consumers. And these costs would be passed onto all consumers in the 13 states of the PJM service area.
But how did it get to this point? There’s plenty of factors, including lack of power generation, rising electricity demand, and an outdated pricing model.
PJM and Rising Electricity Rates
In order to meet demand, PJM holds capacity auctions to line up enough generators to be available. Capacity costs are fees that a company receives to “keep the lights on”. This ensures that power is always being generated. Utility companies then pass this cost down to their consumers.
The main issue is in how the PJM has been lining up to generators. As natural gas and coal power plants retired, some 3,009 power projects sat waiting in the PJM connection queue. At one point, projects faced a delay of 4 years.
However, increased demand and lower power supply has raised auction prices. This July’s auction resulted in capacity prices nearly seven times over normal costs!
Presently, PJM has responded to the lawsuit. They state that they’ve been seeking out ways to lower costs and speed connections. However, they state that federal and state regulations have been their biggest obstacle.
PA Governor and RGGI Electricity Prices
This lawsuit, however, might be “too little, too late”. With energy prices rising, consumers may see their bills climb nearly 10% over the next two years! For PECO consumers, this is all coming on the heels of that utility’s 10% rate hike.
The suit also underscores the states’ problem of getting electricity to power-hungry data centers. Recently, the FERC nixed a deal to power a local PA datacenter with nuclear generation. However, they announced that they’ll hear an appeal sometime in the future. Unfortunately, data centers are a growing business that both business and consumers rely upon.
PA senate Republicans disapprove of the governor’s move. They argue repealing the RGGI Electricity Tax would put fossil fuel generators back in action and cut prices. Though a Commonwealth court ruled the RGGI as unconstitutional, the case is now before the PA Supreme Court.
How to Fight Rising Electricity Rates
It remains to be seen how this lawsuit will plan out. If the PJM can make changes to increase power, rates could fall or stabilize in the future. But if not, prices could continue to rise.
So what can you do in the meantime to keep your bill low? The easiest solution is to shop for an affordable fixed rate plan. Read reviews and find the right provider for you. Visit https://www.paenergyratings.com