Press Release: CUB Ohio Alerts Consumers that Price Hikes & Decreased Reliability are Likely in Wake of PJM Capacity Auction

PJM Interconnection released today the results of its latest capacity auction, a process that determines how much consumers will pay to ensure electricity supply is available several years in advance. The auction affects 67 million people across 13 states, including Ohio, and plays a significant role in setting consumer energy prices. 

This year’s PJM capacity auction once again produced record-high prices as electricity demand has surged faster than new power supplies have come online. While a temporary price cap remained in place for this auction, that protection is set to expire next year, raising concerns about even higher costs ahead if underlying problems are not addressed. More alarmingly, the capacity of the resources procured in the auction fall short of PJM’s reliability requirements.

The Citizens Utility Board of Ohio has cautioned that as demand from data centers and large energy users continues to grow, a failure to expand supply and modernize planning means higher monthly bills and increased reliability risks. Without reforms to speed new generation onto the grid, improve market rules, and plan transmission proactively, Ohioans will continue paying more for electricity without the confidence that the system can meet future needs affordably and reliably.

The following quote may be attributed to Tom Bullock, executive director of the Citizens Utility Board of Ohio:

“For Ohio’s residential consumers, the PJM capacity auction is a top reason their electric bills keep climbing. This year’s capacity auction raised prices to the maximum cap, failing to provide price relief for Ohio families. Ohioans are paying more because PJM rules have not allowed enough affordable new energy to enter the market to keep pace with demand. That lack of action makes the price signal ineffective and ultimately sticks consumers with higher costs and a less reliable power grid.

It should be different: thousands of low-cost energy projects are already waiting in PJM’s interconnection queue, many ready to be built. Additionally, hundreds more projects could be built in Ohio if expanded rules for distributed generation are approved, as multiple state legislators have proposed. Moving those projects forward faster would help bring down prices, strengthen reliability, and reduce the risk that households are stuck paying higher bills. Temporary price caps buy time but do not fix the problem.”

The Citizens Utility Board of Ohio remains committed to working with policymakers, regulators, and other stakeholders to expand energy generation in a way that ensures Ohio consumers have cheaper bills, more reliable service, and greater transparency.