Youngkin, mid-Atlantic governors push for control in power price fight
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Brendan Lynch/Axios
Gov. Youngkin and a bipartisan coalition of governors from 10 other states are threatening to leave the country's largest electricity grid operator if they're not given a say in how it's governed, per Politico.
Why it matters: Their issue is rising electric bills for residents of their states, which are projected to keep climbing largely due to AI and data centers' voracious energy needs.
The big picture: PJM Interconnection is the largest of the nation's seven wholesale electricity markets, serving parts of the Midwest and all of the mid-Atlantic, including Virginia — the data center capital of the world.
- Each year, PJM holds an auction based on electricity demand forecasts, which sets the price that energy providers in its territory, like Dominion, pay for power.
- In the last two years, those prices have ballooned, driving up capacity prices at auction — which guarantee power during high demand — by around 1,000%, Reuters reports. That's driven by data center demand and dwindling power supply,
- Those costs are inevitably passed on to consumers.
State of play: Youngkin and Pennsylvania Gov. Josh Shapiro are leading the push for states to get more say in how PJM is governed, per Politico.
- The unlikely duo — a Republican in a state that imports 40% of its electricity and a Democrat in one that exports more electricity than any other — convened a meeting in Philly this week to once again present their case for more control to PJM after it rejected it earlier this summer.
- Their ask: The governors want the states to be allowed to appoint two members of PJM's nine-member governing board, currently "dominated by industry interests," similar to how the Midwest and New England wholesalers operate.
- Their issues are two-fold: They say PJM's poor demand forecasting is driving up the wholesale cost of energy, and the board is taking too long to connect new power sources to its grid, Reuters reports.
What they're saying: "This is a crisis of not having enough power," Youngkin said at the Monday meeting. "This is a crisis in confidence."
- No decisions were made at the meeting, but PJM said it's open to continued conversations, Politico reported.
Zoom in: Dominion Energy customers were insulated from some of the recent bill hikes post-PJM auction because Dominion also sells its power back to PJM, industry pub UtilityDive reported in 2024.
- But the Richmond-based energy giant is now awaiting SCC approval for rate hikes that would raise locals' power bills by about $20 over two years.
What we're watching: Virginia leaving the grid is still a possibility, per Politico.
- Youngkin said he's working on legislation that would allow the state to "reassess" its place in PJM.