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Gov. Josh Shapiro Doubles Down on His Fight Against Rising Electricity Prices

Shapiro again threatened to pull Pennsylvania out of its grid operator and announced a victory halting electricity rate increases for Philadelphia.

Pennsylvania Gov. Josh Shapiro speaks at a campaign rally supporting Kamala Harris

Gov. Josh Shapiro announced a major utility company in Pennsylvania would voluntarily retract its price hike. Matt Slocum/AP

Pennsylvania Gov. Josh Shapiro is picking fights with the country’s largest power grid operator and the state’s biggest utility company over rising costs — and he’s already notched some wins.

In an exclusive interview with NOTUS, Shapiro doubled down on his threat to pull Pennsylvania out of PJM Interconnection, which currently serves 13 states including Pennsylvania.

“Pennsylvania is no longer going to be held captive to PJM,” Shapiro said. “We put forth some very specific proposals I wanted to see them do to reform themselves. They have not yet adopted those, and I’ve been very clear that they’re either going to adopt them or they’re going to lose Pennsylvania.”

Shapiro, who was at a bipartisan energy-focused meeting with other governors Thursday, declined to provide a specific deadline on his ultimatum, but said “the ball is in their court.”

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PJM is facing extensive criticism from state leaders and power developers, who say that the organization has failed to properly plan for rapidly increasing electricity demand. Shapiro’s tactics show how grid operators and utility companies have become increasingly appealing targets for politicians looking for someone to blame in the developing electricity price crisis.

Utility companies are also facing heat. On Thursday, just after the meeting, Shapiro’s office announced that the governor convinced Pennsylvania’s largest utility to voluntarily withdraw a large planned rate hike — an exceptionally rare occurrence.

PECO, the state’s largest natural gas and electric company that serves Philadelphia and most of the surrounding counties, requested a 12.5% hike in electricity rates last week, which Shapiro called “pure greed.”

On Thursday, just eight days after it announced the rate hike request, PECO withdrew its plans for the increase, citing “conversations with Governor Josh Shapiro” as part of the reason for changing course.

“I demanded that their CEO put customers first and withdraw their rate hike request. PECO listened,” Shapiro said in a statement announcing the withdrawal.

Shapiro also recently secured a significant political win over PJM, getting the grid operator to accept a multiple-year upper limit cap on certain power prices. On Thursday, he made clear that victory wasn’t enough to get him to ease pressure on the grid operator.

Overall wholesale electricity costs within PJM’s district climbed about 56% in the last year.

“I don’t think that they’re built as an organization to be able to do the kind of generation we need,” Shapiro told NOTUS.

Across the board, the Republican and Democratic governors at Thursday’s gathering were more in lockstep on electricity price issues than members of Congress have been in D.C.

New Jersey Gov. Mikie Sherrill took multiple opportunities to bash PJM, calling them “a very bad grid operator” and “asleep at the wheel.”

And Oklahoma Gov. Kevin Stitt, the Republican chair of the National Governors’ Association, repeatedly emphasized his agreement with Shapiro and other Democrats about the importance of permitting reform, which they say would accelerate construction of new sources of power generation and transmission. He said that the reform should apply to all sources of energy, including renewables.

“I know that Shapiro wants it. I know that the governors want it. So boom, get it done,” Stitt said to NOTUS after the event.

But bipartisan agreement at the state level doesn’t go far in D.C. It’s been nearly impossible to get permitting reform done in Congress, where negotiations in the Senate have started and stopped repeatedly. Democrats returned to the permitting negotiation table last month after securing public support from Republicans that previously approved projects shouldn’t be canceled or delayed.

The fate of those negotiations will eventually rest with President Donald Trump, whose administration continues to stall the permitting process for wind and solar projects.

PJM did not immediately respond to a request for comment.