The Federal Energy Regulatory Commission late Tuesday agreed to extend an electricity price cap on future supply guarantees for customers served by the Eastern grid PJM Interconnection — handing a win to the White House and to the region’s governors led by Democratic Gov. Josh Shapiro of Pennsylvania.
PJM, which serves nearly 70 million people in 13 upper Midwest and mid-Atlantic states from Illinois to Virginia, is facing urgent supply challenges. The grid operator has warned that it’s on track for an electricity shortfall in 2027 if more power isn’t brought onto the grid.
PJM, along with other regional power markets, is grappling with rapidly rising energy demand primarily from data centers for artificial intelligence and cloud computing. The surge in demand comes as old coal plants retire and PJM has struggled to speed up its process of bringing new generation onto the grid.
The price cap is for a PJM auction designed to guarantee future resources. The reliability auction sets a price to pay power plants bidding into PJM’s future capacity market. The tightening of supply and demand triggered a skyrocketing price point in 2024. Those electricity costs ultimately pushed utility bills higher starting last summer.
