Tackling the PJM Electricity Cost Crisis
A new report from Synapse Energy Economics highlights the potential for significant economic gains across the Mid-Atlantic region through reforms to PJM’s project approval process. The report, "Tackling the PJM Electricity Cost Crisis," outlines how addressing systemic issues within PJM’s interconnection queue could lead to substantial cost savings and job creation. Pennsylvania Department of Environmental Protection Acting Secretary Jessica Shirley, Representative Mandy Steele, and Keystone Energy Efficiency Alliance joined Evergreen to emphasize these findings.
The report contrasts the current situation with a reformed scenario where PJM streamlines its project approval process, enabling more reliable and affordable energy to reach consumers faster. Modeling indicates considerable advantages for households, workers, and local economies across all states analyzed. In Pennsylvania specifically, reforms are projected to yield an average household energy savings of $500 annually, create 37,500 additional jobs each year, and reduce electric bills for businesses and industrial customers by 20%.
Currently, PJM’s slow approval process is hindering the development of new energy projects, with approvals averaging over five years – the longest timeframe in the nation. This backlog drives up electricity prices, increases reliance on fossil fuels, and limits the grid's ability to adapt to rising demand. A recent agreement with Pennsylvania Governor Josh Shapiro, alongside support from neighboring governors, underscores PJM’s ability to implement necessary changes. Without reform, electricity costs are predicted to increase by 60 percent.
The report scrutinizes PJM’s existing policies and their impact on bringing adequate energy online, and proposes strategic policy adjustments to accelerate project implementation. Recommendations include expedited request reviews with mandatory 150-day study timelines and automated processes, a level playing field for all energy technologies including storage and alternative transmission solutions, utilization of existing infrastructure, and enhanced transparency and governance through public votes and consumer representation.
“Pennsylvania’s energy landscape is evolving rapidly, and we need more electricity to meet the demands of data centers, electric vehicles, and home electrification," stated DEP Acting Secretary Jessica Shirley. "Governor Shapiro’s plan aims to deliver lower energy costs and cleaner energy, and we're committed to collaborating with PJM towards a more affordable and resilient energy future."
Representative Mandy Steele echoed this sentiment, noting, "Electric bills are significantly higher than they should be, and many families are struggling. It's crucial that PJM accelerates its timelines and facilitates the construction of new energy projects."
Jeaneen Zappa, Keystone Energy Efficiency Alliance executive director, added, "Rising demand and prices require a rational and predictable plan to improve PJM's management of power and speed up the approval process for much-needed energy projects."
Julia Kortrey, Evergreen Collaborative deputy state policy director, emphasized, "PJM's approval process is a major obstacle to progress. It’s time to eliminate red tape, lower electricity prices, and bring clean energy online to meet growing demand."
Pat Knight, Synapse Energy Economics senior principal, concluded, “Without prompt action to address the interconnection queue, electricity bills across the region could jump nearly 60 percent by 2040. Reforms that expedite the process could result in real and substantial cost reductions for both households and businesses.”