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Electric bills in Pennsylvania are expected to increase next year following the latest capacity auction conducted by PJM Interconnection, the regional power grid operator. The auction, which determines the cost of acquiring and distributing electricity, set the capacity price at $329.17 per megawatt-day, marking a 22% increase from the previous year's cap of $269.92 per megawatt-day. This increase is anticipated to result in a rise of 1.5% to 5% in customer bills, depending on how wholesale costs are passed on to consumers by utilities and states.
The auction secured 134,311 megawatts of unforced capacity generation to meet the electricity needs of over 67 million people across 13 states and the District of Columbia. The cleared resource mix includes 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind, and 1% solar. Despite the increase, PJM notes that wholesale capacity accounts for a relatively small portion of retail electricity bills.
Pennsylvania Governor Josh Shapiro had previously filed a complaint with the Federal Energy Regulatory Commission (FERC) after last year's auction saw capacity costs soar by over 800%. In response, PJM agreed to cap the capacity price for the next two auctions to protect ratepayers from further increases. However, the rising demand for electricity, driven by factors such as data center expansion and economic growth, continues to put pressure on supply.
According to TribLIVE, the number of power plants, especially coal-fueled ones, is dwindling, further straining the grid. Renewable energy advocates argue that increasing renewable energy and storage on the grid is the only real solution to higher energy prices.
The new capacity prices will take effect in June 2026, and while the exact impact on electric bills remains uncertain, the auction results suggest potential increases for consumers. PJM continues to work on reforms to accelerate the interconnection of new resources and address the challenges facing the grid.