A recent PJM capacity auction signaled more strain ahead for Pennsylvania electricity customers, with the market reaching its price ceiling while still falling short of the grid's target.
Those results point to a supply-demand imbalance that has not been resolved, raising the likelihood that higher power bills will stick around for years.
What's happening?
In reporting, republished by Pittsburgh's Public Source from the Pennsylvania Capital-Star, PJM Interconnection — the nonprofit that runs the nation's largest power grid — said its 2028-2029 capacity auction settled at $325 per megawatt-day, the maximum allowed under the cap.
The auction spans 13 states, including Pennsylvania, and is intended to line up enough power plants for periods of extreme summer and winter demand. PJM said the sale also missed its capacity target by 6,831 megawatts, a larger shortfall than the year before.
David Mills, president and CEO of PJM, said: "These auction results show that demand for electricity continues to grow faster than electricity supply."
He added that PJM is trying to restore balance "by bringing on new generation as fast as possible and managing the growth of new load on the grid."
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Why does it matter?
According to the Capital-Star, Patrick Cicero, the former Pennsylvania consumer advocate who now works with the Pennsylvania Utility Law Project, said the last two auctions have added about $16 billion in reliability costs.
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Consumers do not see that cost passed through in a simple one-to-one way, but they are still bearing it. Cicero said some Pennsylvania utilities have raised rates for customers who do not shop around for electricity plans, with increases as high as 20%, and he estimated the typical residential customer is now paying about $220 to $320 more each year.
The squeeze is also being intensified by wider grid changes. Demand is climbing because of data centers and increased electrification, fossil fuel plants are retiring, and long delays in connecting new projects have constrained new supply. Robert Routh, Pennsylvania state lead for climate and energy policy at the Natural Resources Defense Council, warned: "Data center load growth is degrading grid reliability, and it's raising prices to the Gov. Shapiro-negotiated cap."
What's being done?
PJM said it has been working to reduce its backlog of grid connection requests by prioritizing shovel-ready projects, and state governors in PJM states and the Trump administration have pushed for another auction that could require large-load customers, such as data centers, to secure power commitments rather than leaving ordinary customers exposed to higher costs.
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"Demand growth is not going away. That is the driving story here," Cicero said. "These are flat prices that are going to remain high. It's not necessarily another spike, but it's really, really high prices remaining."
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