By Laila Kearney
NEW YORK (Reuters) – A consumer group has filed a complaint against PJM Interconnection, saying the largest U.S. grid operator is unfairly awarding record high payments to power plants and driving up electricity costs for homes and businesses.
The filing with the Federal Energy Regulatory Commission on Monday is the second recent complaint about PJM Interconnection’s 2025-2026 capacity market auction, which saw prices for power generators more than 800% higher than the previous year.
Following the results, PJM leaders said the record high prices were largely driven by rising energy demand and shrinking supply as fossil energy producers retire.
“These transfer pricing outcomes do not reflect market facts on the ground,” the joint consumer association said in its complaint. “PJM’s existing capacity market rules are unjust and unreasonable.”
The consumer advocacy group, which includes the Illinois Attorney General’s Office, Maryland Office of People’s Counsel, New Jersey Division of Rate Counsel and Office of the Ohio Consumers’ Counsel, said PJM’s capacity auction rules should be changed.
A spokesperson for PJM said the organization was reviewing the complaint and had no comment.
PJM Interconnection pays power plants to operate during times of high demand, with prices for the payments set at annual auctions, using an evolving set of rules to determine those prices.
The latest auction increased capacity costs for consumers from $2.2 billion to $14.7 billion, the complaint said. By some estimates, the 2026/2027 auction under current PJM capacity market rules could result in a burden on taxpayers of up to $37 billion, the complaint said.
PJM postponed that auction, scheduled for December, by six months to address a separate complaint against the auction filed by environmental groups including the Sierra Club.
“There’s a lot of back and forth between different parties when it comes to trying to get the rules to reflect what they want the outcome to be,” said Paul Patterson, an analyst at Glenrock Associates LLC in New York.
PJM’s market watchdog and the governors of Pennsylvania, Illinois, Maryland, New Jersey and Delaware are among those criticizing the grid operator’s market rules and calling for changes.
One of the proposed changes is to include currently excluded power plants with special contracts, known as RMR agreements, to be included in the auction.
