Gov Shapiro's Legal Action Again Averts Historic Price Spike Across 13 States | Commonwealth of Pennsylvania

Harrisburg, PA - Today, Governor Josh Shapiro announced that his settlement with PJM Interconnection - which saved consumers up to $8.3 billion in July - has once again averted an unprecedented and unwarranted spike in energy prices for 67 million people across 13 states, including Pennsylvanians. As a result of Governor Shapiro's legal action, consumers saved $9.9 billion in today's auction and a total of $18.2 billion in the next two years.

The settlement reached in January required PJM to cap the price of securing electricity resources at $333 per Megawatt-Day. Without that cap, Pennsylvania consumers - and consumers across the region - would have been exposed to prices exceeding $529 per Megawatt-Day, driving electricity bills sharply higher. As a result of Governor Shapiro's action, consumers will save an average of 5 to 7 percent on their electricity bills, or approximately $126 per household in the 2027-28 delivery year - representing billions of dollars in avoided costs across the region.

"I sued PJM because it is unacceptable for them to do nothing as consumers pay sky-high utility bills while getting nothing in return," said Governor Shapiro. "My Administration has once again stopped billions of dollars in unnecessary and unjustified energy price hikes from being passed on to families and businesses. PJM needs real reform and they are running out of time to protect consumers from their inaction. My Administration will continue to build more energy generation right here in the Commonwealth and push PJM to fix its broken process so we can lower costs, strengthen reliability, and keep more money in the pockets of Pennsylvanians."

These savings are the result of settling a complaint Governor Shapiro filed with the Federal Energy Regulatory Commission (FERC) in December 2024, warning that PJM's deeply flawed capacity auction design would lead to historic and unjustified price increases. PJM operates the electric grid and capacity market for the mid-Atlantic region, including Pennsylvania.

PJM's capacity market pays power generators to commit to providing electricity in the future. In recent years, electricity demand has surged - driven by economic growth, data centers, and electrification - while PJM has failed to bring new energy resources online fast enough. As a result, capacity prices have skyrocketed. PJM's 2025-26 auction, held in July 2024, resulted in costs of $14.7 billion, an increase of more than 800 percent from the prior year. The subsequent auction, held in July 2025, drove costs even higher - reaching $16.1 billion.

Governor Shapiro pushed PJM to reduce its price cap, and a broad coalition rallied behind his efforts - including four governors, consumer and energy advocates, and the Organization of PJM States (OPSI).

Today's auction results further underscore the urgent need for decisive reform at PJM. Despite nearly every available megawatt of energy clearing the auction, PJM still fell short of its reliability requirement by more than 6.6 gigawatts, signaling a critical failure of the capacity market to deliver adequate, affordable power. Without the Governor's settlement, consumers would have paid far higher prices but received essentially the same inadequate reliability outcome as a result of PJM's broken processes. These outcomes highlight PJM's inability to connect and build new energy resources fast enough - leaving consumers exposed to unacceptable reliability risks and higher costs.

To address this crisis, Governor Shapiro has led a bipartisan effort with the Governors of Virginia, Maryland, and New Jersey to advance commonsense solutions at PJM, including:

• Improving PJM's load forecasting so consumers are not forced to pay for unnecessary resources
  

• Creating flexibility by allowing large energy users, such as data centers, to curtail demand during periods of peak grid stress
  

• Speeding up PJM's stalled interconnection queue and creating expedited pathways to bring new generation online
  

• Accelerating siting and permitting and incentivizing new energy generation - including through initiatives like Governor Shapiro's Lightning Plan and recommendations from more than a dozen bipartisan governors led by Governor Shapiro and Oklahoma Governor Stitt
  

• Extending Governor Shapiro's price collar for an additional year to protect consumers and buy time to add new supply

Governor Shapiro continues to press PJM to deliver real, workable reforms ahead of the June 2026 auction that support economic growth, expand energy supply, and ensure affordable and reliable electricity for consumers - including through the PJM Governors' Collaborative.

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.