Policy & Regulation

‘It is unacceptable’: Maryland legislators react to PJM price increases

‘It is unacceptable’: Maryland legislators react to PJM price increases
(2025/2026 Capacity Prices)

Electricity prices are going up in PJM territory, and people aren’t too pleased.

Maryland State Senator Ron Watson and five state delegates have released a joint statement condemning the electricity price hikes recently announced by PJM, the region’s grid operator.

“It is unacceptable that Maryland households and businesses will have to pay more because of our grid operator’s failure to get energy projects connected to the power grid in a timely manner,” the statement reads in part. “Because of this mismanagement, renewable energy makes up only 2 percent of the available capacity – much less than our neighboring regions, who have brought on far more renewable, job-creating clean energy and kept prices low for consumers.” 

“Instead of spending a ton of money importing fossil fuels, we’d be better off taking advantage of the plentiful sunshine and wind we have right here in Maryland to improve grid reliability and lower energy costs,” the joint statement continued.

PJM’s last power market auction was a canary in the coal mine. The July 30 auction produced a price of $269.92/MW-day for most of the PJM footprint, compared to $28.92/MW-day for the 2024/2025 auction- a nearly 900% increase. Prices soared even higher in the Baltimore Gas & Electric zone in Maryland and the Dominion zone in Virginia and North Carolina due to insufficient resources inside those regions and constraints on the transmission system that limit the ability to import capacity. Those regions saw prices reach $466.35/MW-day (BGE) and $444.26/MW-day (Dominion).

The total capacity bill for the region increased from $2.4 billion to about $14.7 billion, and some of that difference will be passed on to PJM’s customers starting in mid-2025. Next June, Maryland ratepayers could see their electricity bill increase by as much as 29%, according to Tom Rutigliano, senior advocate with the Sustainable FERC Project at the Natural Resources Defense Council.

A report analyzing the potential effects of the PJM auction by Synapse Energy Economics commissioned by the Maryland Office of People’s Council found the primary impetus for the rate increase in the BGE zone to be the Reliability Must-Run Service Agreement (RMR) contracts for Talen’s Brandon Shores and Wagner power plants. While PJM builds out necessary transmission, it is arranging for the continued operation of four units past their proposed retirement date in June 2025. The plants would continue to operate under an RMR arrangement and receive payments funded through customer rates outside of the competitive wholesale power markets.

The report indicates residential electricity bills will go up by 14% in that region as a result of keeping those plants online for resiliency. Ratepayers in the Allegheny Power System (APS) zone can expect to see their bills go up by about 24%; in the Pepco zone, 10%, and by 2% in the Maryland portion of the Delmarva Power South zone, per the Synapse report.

According to numerous industry experts, the PJM price hikes are driven by the cumulative effect of years of struggling to get more renewable generation interconnected. At the end of 2023, PJM had 3,309 projects – mostly solar and battery storage – waiting to connect to the grid.

National trade association Advanced Energy United scored PJM a nation-worst “D-” in a recent scorecard of how all grid operators are managing generator interconnection. PJM’s interconnection process was going so poorly that it shut down its interconnection queue until sometime in 2025. Hundreds of projects are still stuck waiting in line. A 2023 report from Americans for a Clean Energy Grid graded PJM a “D” for its process of building new transmission lines, which are needed to connect energy projects to population centers.

The clean energy projects waiting in PJM’s interconnection queue themselves have enough capacity to replace all the generation currently operating in the PJM system, even after planned fossil fuel plant retirements, according to AEU.

“Clean energy is not just a climate solution; it’s an economic opportunity,” concludes the joint statement issued by Maryland legislators on the matter. “PJM’s failure to integrate these resources effectively is leaving Maryland families shouldering the burden of high energy costs. We must prioritize a more efficient and fair grid planning process.”