Governors Express Concern Regarding PJM Capacity Auctions

Washington, D.C.- Today, Governors Pritzker (IL), Moore (MD), Murphy (NJ), and former Governor Hall-Long (DE) sent a letterto the Federal Energy Regulatory Commission (FERC) expressing support for the concernsthat Pennsylvania Governor Josh Shapiro raised with the country's largest regional grid operator last month. Governors Murphyand Moorealso sent individual letters to PJM citing exorbitant energy costs. Together, the five governors represent the core of PJM's service territory.

Last month, the Commonwealth of Pennsylvania and Governor Shapiro filed a complaint before the FERC against PJM's capacity auction practices. The complaint alleged that through PJM's mismanagement, PJM is imposing record high prices-as much as an 883 percent spike-on 65 million electricity customers throughout the region. The Governor called this, "the largest unjust wealth transfer in the history of U.S. energy markets."

Despite renewable resources being more affordable, more reliable, and out-competingfossil fuel generation in competitive energy markets, PJM announcedlast month that it would continue to prioritize adding more gas plants to its grid.

In September 2024, the Sierra Club filed a complaintbefore FERC challenging PJM's failure to include power plants for which customers are already covering the full costs and costing customers $5 billion in the last auction. Sierra Club has also filed commentsin support of Pennsylvania's complaint against PJM's capacity auction.

"New Jersey has been experiencing severe issues with the interconnection of clean energy projects like solar and battery storage to our grid. At PJM, renewable and clean energy projects keep being left behind with the biased and unfair prioritization of fossil fuel projects despite renewables being cheaper than fossil fuels. Meanwhile, the public keeps experiencing drastic price increases in their utility bills, with another sharp increase scheduled for this summer," said New Jersey Sierra Club Chapter Director Anjuli Ramos-Busot. "PJM is not serving New Jersey's clean energy goals and interests, nor its residents. NJ Sierra Club commends and fully supports Governor Murphy on his double down on PJM, particularly as New Jersey is a PJM original member. The Sierra Club supports the necessary complaints made by Governor Shapiro, Governor Moore, Governor Pritzker, and former Governor Hall-Long."

"For years, PJM's archaic process has made it next to impossible for new (mostly renewable) generation to connect to the regional grid, while dirty, inefficient, and obsolete coal-fired power plants retired," said Pennsylvania Sierra Club Chapter Director Tom Schuster. "Now, with tech giants building massive AI data centers that consume as much power as small cities, this failure of PJM to meet demand is pushing skyrocketing electricity prices onto consumers. Thankfully, Gov. Shapiro and the governors of NJ, MD, DE, and IL recognize the grid operator's market is broken and are pushing for reforms. PJM needs to wake up, recognize that much more solar, wind and storage are necessary to address both consumer demand and the climate crisis, and fix its old processes that were designed only for last century's coal, gas, and nuclear plants."

"PJM's existing capacity market and interconnection processes are in urgent need of updates," said Maryland Sierra Club Chapter Director Josh Tulkin. "These processes have contributed to unnecessary delay in bringing clean energy projects online and must be fixed to ensure Marylanders have access to safe, reliable, and affordable energy. We applaud Governor Moore for calling on PJM to make process changes to protect ratepayers now and in the future."

"In Delaware, we are not only on the front lines of climate change as our coastal and metropolitan communities alike face severe flooding events from the double punch of sea level rise and land subsidence, but we are also on the front lines of toxic air pollution coming from fossil fuel power plants," said Delaware Sierra Club Chapter Director Dustyn Thompson."The overwhelming majority of that pollution comes from our neighboring states in the PJM footprint. The same states who are trying to do the right thing and rapidly expand renewable generation to head off the energy cliff, battle the climate crisis, and reduce air pollution in our region. Yet, PJM is, once again, pulling the rug out from underneath responsible energy projects to lay it at the feet of the fossil fuel generation sources. This heavy-handed and backward policy decision could decimate Delaware's air and quality of life for generations."

About the Sierra Club

The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.