Powerful state leaders aim to gain greater control over the PJM grid during a period of dwelled faith
In a historic move, a bipartisan coalition of nine governors from Delaware, Illinois, Kentucky, Maryland, Michigan, New Jersey, Pennsylvania, Tennessee, and Virginia, have expressed unprecedented frustration with the PJM Interconnection, citing delays in connecting new energy resources, ineffective long-term transmission planning, and a perceived "crisis of confidence" in the organization's leadership [2][3].
The key issues driving this dissatisfaction include interconnection delays, which the governors believe have cost states thousands of jobs and billions in potential investment [3][4]. The governors are also concerned about the surge in capacity costs, with PJM’s most recent capacity auction seeing costs skyrocket from $2.2 billion to $14.7 billion, threatening double-digit percentage increases in electricity bills for consumers in some states [2].
Internal conflicts have led to the sudden departure of two board members and the impending exit of PJM’s CEO, further eroding confidence in the organization’s governance [2][3]. The Federal Energy Regulatory Commission (FERC) has ordered PJM and other grid operators to accelerate interconnection studies, but PJM has not fully complied, leading to further scrutiny [1].
While discussions of leaving PJM are becoming increasingly common [1], no state has formally announced plans to exit yet. The governors’ immediate focus is on gaining a larger role in PJM’s governance—such as nominating board candidates and forming a formal governors’ group—rather than outright departure [4].
One governor, from Virginia, has publicly stated a preference to "fix PJM" rather than leave, suggesting that exit is not the near-term plan for all states [4]. FERC is expected to issue another order to PJM in response to its delays, which could influence the trajectory of state decisions [1].
| Issue | State Concerns | Current State Response | |------------------------------|---------------------------------------------------|---------------------------------------| | Interconnection Delays | Lost jobs, investment, higher bills | Demanding reform, faster processes | | Leadership Instability | Eroded confidence, inconsistent decisions | Calling for new leadership, board seats| | Capacity Cost Surge | Unsustainable price hikes for consumers | Exploring options, some cost relief | | Federal Oversight | PJM non-compliance with FERC orders | Awaiting further FERC action | | Potential PJM Exit | Discussions increasing, no formal plans yet | Reform first, exit as last resort |
PJM has responded to state concerns by temporarily setting a cap and floor on capacity prices. The organization has also fast-tracked some interconnection reviews [5]. Nine governors representing the majority of electric customers in the grid operator's footprint have called for fundamental change and new leadership [6]. The New Jersey General Assembly has passed a bill directing the New Jersey Bureau of Public Utilities to consider leaving PJM [7].
As the situation unfolds, it is clear that PJM is facing an "unprecedented crisis of confidence" [8]. The organization operates the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and the District of Columbia. The future of PJM and its relationship with its member states remains uncertain, but one thing is clear: the governors are demanding change.
- The surge in capacity costs, as seen in PJM's most recent capacity auction, has raised concerns amongst the governors about unsustainable price hikes for consumers in the energy business sector, posing a threat to general-news discussions about electricity bills.
- The perceived crisis of confidence in PJM's leadership, combined with the sudden departure of two board members and the impending exit of the CEO, has led to increased political scrutiny of the organization's governance.
- As the demands for change in PJM's operations and leadership grow, there are discussions amongst the states about their role in the organization's future, touching upon aspects such as nominating board candidates, forming a formal governors' group, and even the possibility of states leaving the PJM Interconnection altogether, impacting the finance and business sectors.
