FERC Approves Governor Shapiro’s Settlement with PJM to Prevent Unnecessary Price Hikes and Save Consumers Over $21 Billion on Utility Bills

In December 2024, Governor Shapiro filed a lawsuit with federal energy regulators to prevent energy price hikes on 65 million consumers, including 13 million Pennsylvanians.

Without action, PJM would have set a cap that could have tripled Pennsylvanians’ energy prices – Governor Shapiro’s action stopped that.

Governor Shapiro’s work to resolve this lawsuit with PJM has averted runaway prices and will save Pennsylvanians money on their electricity bills.

Harrisburg, PA – On April 22nd, Governor Josh Shapiro announced that the Federal Energy Regulatory Commission (FERC) has approved his settlement with PJM Interconnection, resolving the Governor’s lawsuit against PJM’s price hikes and saving consumers over $21 billion over the next two years.

Left unaddressed, PJM’s next capacity auction scheduled for July 2025 could have tripled energy costs for 65 million people across the region. In December 2024, Governor Shapiro filed a complaint with FERC against PJM Interconnection, criticizing flaws in PJM’s capacity auction design that threatened to impose significant new price increases. The Governor worked with PJM to reach an agreement in January to significantly lower the capacity auction price cap by 35 percent, averting a runaway auction price that could have unnecessarily increased energy bills.

“When PJM’s next auction was set to result in historic price increases, I took action to stop this price hike on consumers and defend Pennsylvanians,” said Governor Shapiro. “My Administration worked with FERC and PJM to find a path forward that will save Pennsylvanians billions of dollars on their electricity bills. I will continue to work to ensure safe, reliable, and affordable power for Pennsylvanians for the long term.” 

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

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.

Governor Shapiro pushed PJM to reduce their 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). The Shapiro Administration’s energy leadership promises to save the PJM region over $21 billion on utility bills in the next two years.

Governor Shapiro continues to repeatedly press for long-term solutions that address increasing 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; and 
• Reform the capacity market to more accurately reflect real world conditions, ensuring grid reliability while saving consumers money on their utility bills.