Governors unite to demand accountability from power grid operator PJM as electricity costs soar

New Jersey Gov. Mikie Sherrill joins bipartisan coalition seeking greater state representation in decisions affecting electricity bills and grid reliability.

Decisions that can drive up electricity bills for millions of U.S. households are being made through a decades-old system that gives consumers and their elected representatives too little influence, according to governors from states served by power grid operator PJM Interconnection.

The governors argue that the regional power grid operator’s governance structure has failed to keep pace with changes in the electricity industry, leaving states with limited influence over policies that affect electricity costs, power supplies and economic development.

On Thursday, governors from all 13 states served by PJM and the mayor of Washington, D.C., formally established the PJM Governors’ Collaborative, an organization intended to coordinate state efforts to reform the grid operator’s decision-making process.

The agreement, signed during a summit in Chicago, comes as electricity costs have surged and PJM has struggled to secure enough power supplies to meet its future reliability targets.

Illinois Gov. JB Pritzker, who hosted the summit, has been a leading advocate for greater state oversight of PJM.

“Families in Illinois and across the region deserve more from PJM, and as governors, we refuse to sit by idly as they prioritize profits over people,” Pritzker said in a statement. “Families and businesses in Illinois depend on an electric grid that is reliable and affordable, and the decisions made at PJM have an enormous impact on both.”

PJM coordinates the movement of wholesale electricity across all or parts of 13 states and Washington, D.C., including New Jersey. Its decisions about electricity markets, transmission infrastructure, and future power supplies affect what utilities pay for electricity, costs that can ultimately be passed along to consumers.

“We are facing an energy affordability crisis,” New Jersey Gov. Mikie Sherrill said in a statement about joining the coalition. “Meeting this moment will take strong, coordinated action across state and party lines to lower costs and build a reliable grid that can power our interconnected region for years to come.”

The governors say ratepayers and their elected representatives have no meaningful opportunity to vote on behalf of the public interest within PJM’s stakeholder decision-making process. They also say requests from states for greater representation have been ignored.

The governors want changes that would give states and consumers a stronger role in shaping the rules that govern the region’s electricity market.

Rising costs and growing demand

One of the biggest concerns is the rising cost of PJM’s capacity market, which pays power suppliers to commit to having electricity available when demand is highest.

The coalition agreement points to an 833% increase in capacity auction prices for the 2025-26 delivery year compared with the previous auction. Prices have remained elevated in subsequent auctions.

Capacity costs are one component of electricity bills. Higher auction prices can increase costs for customers, although they do not translate into equivalent percentage increases in household bills.

In July, PJM’s auction for the 2028-29 delivery year produced a price of $325 per megawatt-day, the maximum allowed under a federally approved price cap. The auction secured $16.4 billion in capacity commitments but fell 6,831 megawatts short of PJM’s reliability requirement.

It was the second consecutive auction in which PJM failed to secure enough committed resources to meet its reliability target. Those shortfalls do not necessarily mean customers will experience power outages, but they raise concerns about the region’s ability to maintain adequate supplies as demand grows.

PJM has identified rising electricity demand, delays in connecting new power generation to the grid, retirements of existing power plants, and supply-chain constraints as challenges facing the regional electricity system.

Data centers and other large electricity users are contributing to projections for substantial increases in demand, putting additional pressure on electricity supplies and raising questions about who will pay for new generation and transmission infrastructure.

A call for governance reforms

In their agreement, the governors argue that PJM’s governance and stakeholder processes were established decades ago and have not kept pace with developments in the electricity sector.

PJM is a federally regulated regional transmission organization that operates wholesale electricity markets and coordinates grid reliability. Its member organizations participate in a stakeholder process that considers changes to market rules and other policies.

The governors say that system gives consumers and their elected representatives insufficient influence over decisions that can substantially affect electricity prices.

The agreement also notes that PJM was established before newer regional grid organizations that provide greater opportunities for state involvement.

Although states regulate utilities and establish their own energy policies, many decisions affecting wholesale electricity costs and regional grid reliability are made through PJM’s market and governance processes, which is subject to oversight by the Federal Energy Regulatory Commission.

The governors argue that changes are needed to ensure state policies and consumer interests receive greater consideration.

Pennsylvania Gov. Josh Shapiro criticized PJM for its handling of growing demand and rising electricity costs.

“PJM has been too slow to bring new generation online and too quick to saddle families with higher bills, and now the energy and utility companies in PJM are trying to sideline the people’s elected representatives,” Shapiro said.

Maryland Gov. Wes Moore said the coalition would push for changes that put consumers ahead of industry interests.

“For too long, PJM and its Members have prioritized their profits over ratepayers, leaving Marylanders to shoulder the rising cost of energy,” Moore said.

How the coalition will work

Under the agreement, the PJM Governors’ Collaborative will serve as a forum for states to share information, evaluate proposed changes to electricity markets and develop joint positions on regional energy issues.

The coalition will coordinate engagement with PJM, federal regulators, state utility commissions, consumer advocates and other organizations involved in developing electricity policies.

Each governor and the mayor of Washington, D.C., will designate a state official and an alternate to represent their jurisdiction.

The collaborative will establish task forces to examine particular issues and allow states to participate in initiatives where they share common goals. The coalition also anticipates that the organization could take on formal responsibilities within PJM if governance reforms are adopted. Those responsibilities could include submitting issues for consideration and naming representatives to PJM’s nominating committee.

Participating states will retain the ability to take separate positions or decline to join particular initiatives.

The agreement also outlines plans to explore funding for the coalition’s operations, including possible support through PJM and philanthropic contributions. The states could establish a nonprofit organization to administer the collaborative and hire staff members. No budget or funding commitments were specified in the agreement.

A growing effort to influence PJM

The formation of the coalition follows more than a year of increasing cooperation among governors in the PJM region.

In September 2025, governors and representatives from the states served by PJM gathered in Philadelphia to discuss ways to increase state and consumer representation in the grid operator’s governance.

Since then, the governors have coordinated their involvement in proceedings before PJM and the Federal Energy Regulatory Commission involving electricity supplies, reliability and governance.

Thursday’s agreement formalized that cooperation and establishes a continuing structure for joint action.

The coalition’s ability to influence electricity costs will depend on whether the governors can agree on specific reforms and persuade PJM and federal regulators to adopt them.

In addition to New Jersey, the participating states are Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.