PA Environment Digest Blog: Gov. Shapiro Provides Update On The Fight To Lower Energy Prices, Calls On General Assembly To Move His Commonsense Lightning Energy Plan

On May 30, Gov. Josh Shapiro issued an update on what he said is the "fight to lower energy prices through PJM Reform and [his] Commonsense Lightning Plan."

The Senate and House are scheduled to adjourn for the summer on June 30.

As utility companies raise electricity prices as a result of last year’s PJM auction, Gov. Josh Shapiro said he is working to deliver lower energy costs for Pennsylvanians and supercharge energy development in the Commonwealth.

When PJM was set to deliver even larger rate hikes next year, the Governor stepped in and filed a complaint with the Federal Energy Regulatory Commission (FERC) against them, ultimately entering a settlement that will save consumers over $21 billion over the next two years.

[Editor’s Note: PJM’s last capacity auction in July 2024 for delivery in 2025-26 resulted in a dramatic increase in electricity cost from $28.91/MW-day to $269.92/MW-day-- a 933% increase. Read more here.

[Future capacity auctions for delivery in 2026/27 and 2027/28 can still see more increases, but will have a price cap of $325/MW-day and a floor of $175/MW-day as a result of a settlement PJM entered into as a result of a lawsuit brought by Gov. Shapiro. Read more here.]

If left unaddressed, PJM’s next capacity auction — scheduled for July 2025 — could have tripled energy costs for 65 million people across the region, including 13 million Pennsylvanians.

In addition to fighting against unnecessary price increases on consumers, the Shapiro Administration remains committed to meeting the need for new generation by getting more power projects built in Pennsylvania as part of the Governor’s “Lightning Plan” to create jobs, reduce emissions, and ensure safe, reliable, affordable power for Pennsylvanians for the long term.

“My Administration is leading the fight against higher electricity costs and lowering Pennsylvanians’ energy bills,” said Governor Shapiro. “When PJM’s next auction was set to result in historic price increases, I took action to stop that price hike on consumers and find a path forward that will save Pennsylvanians billions of dollars on their electricity bills. Pennsylvania is a net energy exporter and a national energy leader, and my Administration has a commonsense, all-of-the-above energy plan to capitalize on our strengths, create more energy jobs, build more power in the Commonwealth, and lower energy costs for Pennsylvanians.”

Pennsylvania is a leading producer of energy and the nation’s largest exporter of electricity — nearly a century ago, the Commonwealth helped to found PJM, and today still serves as the generation backbone for the region.

[Editor’s Note: The Independent Fiscal Office reported in February Pennsylvania exported 87 million MW hours of electricity to other states and net exports increased by 24% from 2019 to 2024 and produced 18% of the total generation of the PJM region in 2024. Read more here.]

PJM operates a capacity market, which means that electric generators are paid to commit to providing energy in the future.

Over the last several years, demand for energy has risen rapidly but PJM has been slow to allow new power sources onto its grid — and as a result, PJM capacity prices have skyrocketed.

The Governor pushed PJM to reduce its price cap, and a diverse coalition came together support the Governor’s message, including four governors, energy and consumer advocates, and the Organization of PJM States (OPSI), which represents public utility commissions across all 13 PJM states.

The Shapiro Administration’s energy leadership is expected to save customers across the PJM region over $21 billion on utility bills in the next two years.

Governor Shapiro said he continues to repeatedly press for long-term solutions that address increasing energy costs, urging PJM to:

-- Speed up their stalled interconnection queue to get new projects online, like the restart of Three Mile Island in Pennsylvania

-- Rely on member states to help determine which projects are ready and to speed up project approvals like the Governor has done in Pennsylvania

-- Implement new best practices established by FERC in order to be better prepared in extreme weather scenarios and ensure affordable, reliable power year-round

-- Reform the capacity market to more accurately reflect real world conditions, ensuring grid reliability while saving consumers money on their utility bills.

In addition to fighting for PJM reform, the Shapiro Administration is also working with its legislative partners in the General Assembly to pass the Governor’s Lightning Plan.

Supported by a broad coalition of labor and industry leaders, environmental advocates, and consumer groups, the Governor’s commonsense energy plan will create jobs, lower costs for consumers, speed up permitting, and protect Pennsylvania from global instability by building more energy generation in Pennsylvania — positioning the Commonwealth to continue to be a national energy leader for decades to come.

Governor Shapiro’s energy plan will provide funding for new projects through updated EDGE tax credits, streamline energy project approvals by creating a state energy siting board to cut red tape, and encourage communities to lower utility bills through shared energy resources.

Additionally, the plan increases rebates for energy-efficient appliances to help reduce household energy costs.

Earlier this month, the Pennsylvania House of Representatives passed two key pieces of the Lightning Plan with bipartisan support.

By producing more energy, cutting red tape, and advancing innovation, Governor Shapiro’s Lightning Plan will boost key sectors of the Commonwealth’s economy, including manufacturing, robotics and technology, agriculture, and life sciences.

Independent studies confirm that the Governor’s plan will save Pennsylvanians money on their electricity bills, create energy jobs, and lead to billions in new investment in power plants and energy infrastructure.

NewsClips:

-- WHYY: Electricity Bills In PA, NJ, DE To Rise Starting June 1; Advocates Say More Renewables Would Lower Future Costs

-- Post-Gazette - Anya Litvak: Electric Bills In PA Are Going Up Next Month, Your Utility Can’t Help It

-- WVIA: Bradford, Northumberland, Tioga And Union Utility Customers Face Rate Hikes

-- PUC Reminder Of June Hearings On Proposed 11% Columbia Gas Rate Increase

Resource Links - Lightning Plan:

-- Gov. Shapiro: Lightning Plan Tax Credit Bill, Community Energy Pass PA House [PaEN]

-- House, Senate Members Introduce Gov. Shapiro's 'Lightning' Energy Plan To Lower Energy Costs, Create Jobs, Protect Pennsylvania From Global Energy Instability [PaEN]

-- Gov. Shapiro Launches Legislative Push for 'Lightning Plan’ To Build More Energy Projects, Speed Up Permitting, Lower Costs, Create Jobs For Pennsylvanians [PaEN]

Resource Links - Electric Grid:

-- House Committee Told PA Needs An Energy Policy, Doing Nothing Means We Are Going To Run Out Of Power; Overreliance On One Fuel-- Gas-- Is Raising Electricity Prices [PaEN]

-- PUC Urges Electricity Customers To Start Shopping, Conserve Energy To Help Avoid Impact Of June 1 Rate Increases Of Between 5% and 16% On Most Electric Bills [PaEN]