By Gordon Grab
Governor Josh Shapiro's proposal to limit electricity prices could, according to America's power, a trade organization of coal -fired power plants, perverse to higher customer bills and a higher risk of power failures.
After negotiations with the governor, the PJM connection operator of the power grid to the Federal Energy Regulatory Commission (FREC) presented a plan to limit the prices for two years – a period that would happen to go beyond the re -election of 2026 from 2026. On April 22, Ferc approved the agreement.
As usual, the governor led an early victory round. Last year, Shapiro described an increase in electricity costs of $ 14.7 billion as “largest unjust transfer of wealth in the history of the US energy markets”. The organizer claimed that the price limit would deliver savings of almost 22 billion US dollars.
However, the higher prices at the PJM auction of the past year result from the increasing demand for electricity and a lack of manufacturers who were willing to offer new supplies. The auctions are supposed to reproduce a market on which the prices with the difference between supply and demand rise and fall.
In a protest submitted at Ferc, America's PJM explained that the PJM “proposal to appease governor Shapiro could be appealed superficially to help consumers in turbulent economic times, but that is only his aura, not his reality.” The trading group increases the ghost of “catastrophic consequences” from PJM's “Russian Roulette Russia Roulette” by PJM.
America's strength may sound hyperbolic. But in connection with more than 200 deaths in Texas due to the lack of reliable generation and fuel, legislators must take the warning words of the trading group seriously.
Other organizations have published the same warning.
“The governor's proposal is dangerous because he is anesthetizing the market for price signals, as investments in the capacity of new generation are directed,” said David Taylor, CEO of the Pennsylvania Manufacturers' Association. “He would damage an already endangered electricity market, further undermine the reliability of the grids and possibly have people kill if the power fails.”
The PJM monitors the electricity transmission in 13 countries and has published several warnings of electricity shortages in the region in the next few years. These warnings result from the forced closure of coal-fired power plants through regulations and wind and solar subsidies that increase the market. Instead of attracting new energy sources, the price limit would accelerate the shutdown of highly reliable coal systems that, according to America, can lead for months of fuel supply for emergencies on site.
Since your operations are dependent on the weather, wind turbines and solar panels cannot match the reliability of units that are powered by coal, natural gas or nuclear energy. As a more reliable facilities, most new generation of wind and solar operators are calling for most new suggestions for PJM.
PJM, said America's power, sacrificed his role as a market manager for the complaint of governor Shapiro: “PJM, who is disappointing under the weight of the state -based political pressure, and not to protect the market integrity and reliability, which could lead to disasters consequences.”
Let us be clear: the negotiated price limit does not save any money. It only limits cost increases.
“The tariffs will continue to increase as part of this agreement,” said Senator Joe Pittman.
In other words, Shapiro's intervention will probably extend the time of increasing prices. If the governor continues his war against reliability with carbon taxes and increased subsidies for unreliable energy sources, the gap between demand and supply will further increase prices.
The lack of a new reliable production could force PJM to use expensive “reliability agreements”. These agreements enable the systems that are closed for economic reasons in order to continue to compensate them at relatively high prices, according to American power.
In short, bad government guidelines limit the power supply and drive your electricity bills. The PJM settlement will tighten this problem.
Nappy power is of particular importance in winter or summer when extreme temperatures are considerable risks for people. In addition, price peaks are magical in the event of cold when the requirements for the home heating are competing with power plants for natural gas. During a polar vertebrae in January, coal systems may avoid increased costs of 1.4 billion US dollars and delivered more than 40 percent of the additional energy required for warm houses and companies, according to America.
The Shapiro-PJM settlement approved by FREC comes out to a question: What use is lower prices if there is no electricity if it is most urgently needed?
This comment was first published on April 28, 2025 in the DV Journal.
Gordon Tomb is a senior consultant in the CO2 coalition.
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