Governors of PJM States Intensify Pressure on PJM for Reform

A bipartisan group of governors of PJM Interconnection (PJM)[1] member states has intensified calls for reforming PJM after what they have described as a “crisis of confidence,” citing high electricity prices, interconnection delays, and lack of transparency and state participation in the RTO’s decision-making processes.[2]

On September 23, 2025, Pennsylvania Gov. Josh Shapiro (D) hosted a day-long summit (Summit) with representatives from all 13 member states. At the summit, Gov. Shapiro threatened to leave PJM if it does not implement changes quickly, while also noting that leaving PJM is not a direction that “[he] is eager to chart.”[3] Virginia Gov. Glenn Youngkin (R) expressed similar concerns and noted that lawmakers in Virginia are “working on legislation that will allow Virginia to reassess whether [the state’s] utilities will continue to be part of PJM.”[4] Analysts deem the prospect of member states’ utilities leaving PJM as unlikely given that that option would likely be expensive, time-consuming, and full of uncertainty.[5]

A few days after the Summit, on September 26, 2025, 11 governors in the PJM region —excluding Kentucky and West Virginia — launched the PJM Governors’ Collaborative.[6] The PJM Governors’ Collaborative is intended to promote greater representation of states and consumers and to serve as “a vehicle for education, information sharing, and joint action where agreement exists” across the member states.[7] The PJM Governors’ Collaborative will initially focus on three areas of reform discussed at the summit — accurate load forecasting, auction design, and giving states a role in PJM governance.[8]

These developments are the latest in the member states’ sharpened focus on PJM since PJM’s annual capacity market, known as the Base Residual Auction, produced record-clearing prices for the 2025/2026 and 2026/2027 delivery years.[9] After last year’s auction for the 2025/2026 delivery year resulted in a clearing price of $269.92/MW-day for most of the PJM region — up from $28.92/MW-day for the 2024/2025 Base Residual Auction — Gov. Shapiro filed a complaint with the Federal Energy Regulatory Commission (FERC) seeking a price cap and eventually reached a FERC-approved settlement with PJM establishing a cap of approximately $325/MW-day for the 2026/2027 and 2027/2028 Base Residual Auctions.[10] The 2026/2027 Base Residual Auction clearing price was constrained by the price cap, without which, PJM estimates, the auction price would have reached nearly $389/MW-day.[11]

The Summit and Collaborative also occurred after PJM rejected a proposal by a bipartisan group of governors to nominate former FERC Chairman Mark Christie and former FERC Commissioner Allison Clements for election to the PJM Board of Governors this summer.[12] In letters to PJM, the governors had demanded that PJM appoint “individuals who understand the concerns of ratepayers facing rising costs” and that the two seats continue to be “dedicated to candidates who are proposed by the states collectively and then vetted by the Nominating Committee.”[13]

In addition to Gov. Shapiro and Youngkin, Gov. Phil Murphy (D) of New Jersey addressed the Summit. In May 2025, Gov. Murphy directed New Jersey’s Board of Public Utilities (BPU) to assess “whether New Jersey is best served by the regional capacity market administered by PJM.” In June 2025, the New Jersey General Assembly passed a bill that would require the BPU to work with other states to research and recommend collective action to require load-serving entities to limit their reliance on the PJM capacity market to 20% of capacity needs or withdraw from PJM. The bill is pending review by the New Jersey Senate. In addition, in August 2025, Gov. Murphy signed into law a joint resolution requiring the BPU to investigate PJM’s reliability pricing model.[14]

Manu Asthana, the CEO and President of PJM, who is slated to leave at the end of the year, attended the Summit and expressed interest in collaborating with the states. At the same time, Asthana defended PJM, pointing to progress on a reduction of PJM Interconnection’s queue from 200 GW in 2020 to 46 GW in 2025, completion of the first cycle of its two-part interconnection transition cycle culminating with the issuance of draft interconnection agreements for a total of 17 GW, and hiring additional staff and entering into a data analytics partnership with Google to accelerate interconnection studies. PJM expects its reformed interconnection process to begin in April 2026, with a one- to two-year review time frame. Asthana also criticized the member states, focusing on levers that the member states control to reduce electric bills and bring generation online, such as siting and permitting reform and proactive procurement for capacity in default service auctions.[15]

Capacity resource owners have opposed the member states’ recent calls for reforms. In a statement regarding the Summit, Todd Snitchler, CEO of the Electric Power Supply Association, representing independent power producers, expressed concern that intervention by member states will hurt investment in generation and explained that “[h]igh prices, while unpopular are essential, typically brief market signals that attract investment, expand supply and help keep costs stable over time.” Similar to Asthana, Snitchler cited the role of states in “reducing regulatory burdens, streamlining permitting for natural gas infrastructure, and scaling back policies that are causing the premature retirement of existing generation.”[16]

While immediate withdrawals from PJM by member states appear unlikely, the PJM Governors’ Collaborative represents coordinated member states’ pressure on PJM and points to a period of heightened tension between PJM, its member states, and the power producers that rely on PJM’s markets.

[1] PJM is a regional transmission organization (RTO) that manages the wholesale electricity market in 13 states and the District of Colombia.

[2] See, e.g., Timothy Fox et al., PJM–Of Services, Seasons and Secessions, ClearView Energy Partners LLC (Sept. 25, 2025), https://mcusercontent.com/0554cc7ed0bda904329a48c93/files/2c83e766-df53-3bb2-0ab6-4241daecd365/2025_09_25_PJM.pdf.

[3] Governor Shapiro, Governor Shapiro to Convene Historic 13-State Summit to Chart a New Course for PJM, YouTube (Sept. 22, 2025), https://www.youtube.com/watch?v=TqfWYdg8aWY.

[4] Governor Glenn Youngkin, PJM Multi-State Technical Conference, YouTube (Sept. 22, 2025), https://www.youtube.com/watch?v=LB7i5T-B6JI.

[5] See Fox et al., supra note 2.

[6] See Governor’s Press Office, ICYMI: After Historic Summit in Philadelphia, States Launch PJM Governors Collaborative to Push for Reform, Lower Energy Costs, and Protect Grid Reliability, Commonwealth of Pennsylvania (Sept. 26, 2025), https://www.pa.gov/governor/newsroom/2025-press-releases/states-launch-pjm-governors-collaborative-for-reform–lower-cost.

[7] PJM Governors’ Collaborative, Joint Statement of Intent, PJM (Sept. 25, 2025), https://www.pjm.com//-/media/DotCom/about-pjm/who-we-are/public-disclosures/2025/20250925-pjm-governors-collaborative-joint-statement-of-intent.pdf.

[8] See Governor’s Press Office, supra note 6.

[9] See Ethan Howland, PJM Capacity Prices Set Another Record with 22% Jump, UtilityDive (Jul. 23, 2025), https://www.utilitydive.com/news/pjm-interconnection-capacity-auction-prices/753798/.

[10] PJM Interconnection, L.L.C., 191 F.E.R.C. ¶ 61,066 (Apr. 21, 2025). See Howland, supra note 9.

[11] See Howland, supra note 9.

[12] Letter from Gov. Josh Shapiro et al. to PJM Board of Managers and Members Committee (Sept. 10, 2025), https://www.pjm.com//-/media/DotCom/about-pjm/who-we-are/public-disclosures/2025/20250911-govs-of-pjm-member-states-letter-to-pjm-board-related-to-nc-decision-regarding-open-seats-on-bom.pdf.

[13] See, e.g., Letter from Gov. Josh Shapiro et al. to PJM Board of Managers (July 16, 2025), https://www.pjm.com/-/media/DotCom/about-pjm/who-we-are/public-disclosures/2025/20250717-nine-governors-letter-regarding-board-vacancies.pdf.

[14] See Fox et al., supra note 2.

[15] See Ethan Howland, PJM CEO Asthana Responds to Criticism, Says States Must Address Supply Challenges UtilityDive (Jul. 23, 2025), https://www.utilitydive.com/news/pjm-asthana-resource-adequacy/760920/.

[16] EPSA, PJM Governors’ ‘Solution’ to Rising Costs Amounts to More Red Tape and Bureaucracy (Sept. 22, 2025), https://epsa.org/epsa-todd-snitchler-response-pjm-governors-grid-reliability/.

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