Governor Shapiro's Legal Action Against PJM Saves Consumers Billions and Prevents Massive Price Hike Across 13 States

The capacity auction results announced today — $329/MW-Day — represents an $8.3 billion decrease in costs to consumers from the possible auction result had Governor Shapiro not obtained the settlement from PJM. 

In April, federal regulators approved the Governor’s settlement with PJM, preventing excessive energy price hikes on 13 million Pennsylvanians — without action, PJM would have set a cap that could have added hundreds of dollars a year to Pennsylvanian’s electricity bills. 

The Governor also continues to work with the General Assembly to move his commonsense energy plan forward, which would create more reliable, affordable power in the Commonwealth and further reduce consumer costs.

Harrisburg, PA - On July 22, 2025, Governor Josh Shapiro announced that his settlement with PJM Interconnection — negotiated in January and approved by the Federal Energy Regulatory Commission (FERC) in April — has saved consumers billions of dollars and prevented a historic spike in energy prices for 65 million people across 13 states, including 13 million Pennsylvanians.

Thanks to the Governor’s leadership, PJM agreed to reduce its auction price cap from over $500 per Megawatt-Day to $329 per Megawatt-Day, preventing runaway prices that would have unnecessarily driven up utility bills across the region. The auction results announced today, $329/MW-Day, represents an $8.3 billion decrease in costs to consumers across the region from the possible auction result had Governor Shapiro not obtained the settlement from PJM. That means 13 million Pennsylvanians will save over $1.6 billion on their electricity bills - averaging $116 per household - in the year ahead as a result of Governor Shapiro’s action.

This successful intervention came after Governor Shapiro filed a complaint with FERC in December 2024, warning that PJM’s flawed capacity auction design would result in historic price increases. PJM operates the electric grid and capacity market for the mid-Atlantic region, including Pennsylvania.

“When PJM’s auction was set to trigger grossly excessive price increases, I took action to stop that spike and protect Pennsylvania consumers,” said Governor Shapiro. “My Administration has now averted billions in unnecessary energy costs — and we’re leading the fight to lower electricity bills and bring more affordable power online. Pennsylvania is a net energy exporter and a national energy leader, and with our commonsense, all-of-the-above energy strategy, we’re building more power in the Commonwealth, creating good-paying jobs, and delivering long-term savings for Pennsylvanians.”

PJM operates a capacity market, which means that operators 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. PJM’s 2025-26 capacity auction, held in July 2024, resulted in costs of $14.7 billion — an over 800 percent increase from the prior year.

Governor Shapiro pushed PJM to reduce their price cap, and a diverse coalition came together to support the Governor’s message, including four governors, energy and consumer advocates, and the Organization of PJM States (OPSI).

The negotiated resolution is one part of the Shapiro Administration’s sustained engagement with PJM. Governor Shapiro continues to repeatedly press for long-term solutions that address increasing costs, urging PJM to:

• Demanding change, alongside nine bipartisan governors, to PJM’s broken governance process to ensure the grid operator listens to the consumers it serves across the region;
• 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.

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.