The House Environmental Resources and Energy Committee held a public hearing last week to discuss PJM Interconnection’s electricity demand trends and how they relate to Pennsylvania’s energy markets. PJM is a regional transmission organization (RTO) that manages the electricity grid and wholesale energy market for 13 states and Washington, D.C. With its rich energy resources, Pennsylvania is the largest supplier to the PJM grid and provides energy to 65 million consumers, through a combination of natural gas (as the primary source), along with nuclear, coal, and renewables.

Topics at the hearing included recent capacity auction, increasing concern regarding PJM queues, grid reliability, and possible solutions to address these issues, as PJM projects a 25 percent increase in summer peak demand over the next 15 years. According to the PJM representatives at the hearing, energy demand has increased due to technological advancements including Artificial Intelligence, electric vehicles, manufacturing, and other energy intensive initiatives. Meanwhile, energy supply has decreased mostly due to federal and state decarbonization policies. This also has put a strain on pricing, with recent auction results showing prices doubled, totaling about $14.7 billion.

This perfect storm of increased energy demand, lower supply, and higher prices has led PJM to voice concerns that there will be supply shortage by 2030, if not sooner. To counter this, PJM is in the process of working to get renewable projects completed; help push through additional technical reforms to bring more storage online; and work toward stronger transmission planning to secure long-term procurement and capacity.

Sam Robinson, deputy chief of staff for consumers and the environment in the Shapiro Administration, emphasized commitment to increase power generation in Pennsylvania and outlined the administration’s engagement with PJM to address rising capacity prices and reliability concerns. This includes legislative and regulatory action to improve power generation and attract new development to the Commonwealth.