Nine governors from both parties asked PJM for board seats, new leadership, and faster grid connections. What they want and what it means for solar owners.
On July 17, 2025, governors from nine PJM states sent a joint letter to the grid operator demanding reforms. The group was bipartisan: seven Democrats and two Republicans.
Their message was blunt. PJM's inability to connect new power supply efficiently, combined with weak long-term planning, is driving up electricity prices and eroding public trust.
Here is what the governors asked for, why New Jersey regulators are pushing so hard, and what the fight means for solar owners in the region.
Which Governors Signed the PJM Reform Letter?
Governors from Delaware, Illinois, Kentucky, Maryland, Michigan, New Jersey, Pennsylvania, Tennessee, and Virginia signed the July 17, 2025 letter to PJM. The signers included Democrats such as Phil Murphy of New Jersey and Josh Shapiro of Pennsylvania, and Republicans Bill Lee of Tennessee and Glenn Youngkin of Virginia.
PJM runs the grid for 13 states and Washington, D.C. When nearly all of its governors coordinate on a public letter, it signals how serious the cost pressure has become.
What Are the Governors Asking PJM to Change?
The governors asked PJM to give states a direct say in two board seats, bring in new leadership, and fix its long-running problems connecting new resources and planning for the future.
The main demands, as described by the Delaware governor's office and the Sierra Club:
- ●Board seats. Two board seats filled by candidates proposed jointly by the states.
- ●New leadership. "Fundamental changes" after PJM voted out two board members and its CEO announced his departure.
- ●Faster interconnection. Fixing what the letter called PJM's "multi-year inability to connect new resources to its grid efficiently."
- ●Long-term planning. Better transmission planning so the grid is ready for growth.
- ●Affordability and transparency. A clear focus on customer costs and how decisions get made.
The states also committed to forming a PJM Governors Group for ongoing coordination.
Why Are PJM Capacity Prices So High?
PJM's capacity auction for 2026–2027 cleared at $329.17 per MW-day, the maximum allowed under a price cap, according to New Jersey's Board of Public Utilities. That was a 22% jump from the prior year, and Utility Dive reported the total cost reached $16.1 billion.
Capacity prices are what PJM pays to make sure enough supply is available at peak times. Utilities pass those costs on to customers.
New Jersey residents have felt this directly. The Sierra Club reported bill increases of around 20% in the state, and NJBPU President Christine Guhl-Sadovy said: "New Jersey families are already living with the consequences of PJM's broken market."
We covered that squeeze in New Jersey's electric bill crisis.
What Could Reform Save Households?
Evergreen Action estimates that if PJM stays on its current course, annual household electricity bills could exceed $2,000, while reforms could save families more than $400 a year, according to the Sierra Club.
Those estimates depend on which reforms happen and how quickly. But the direction is clear: the cost of doing nothing keeps rising.
If new power can't connect to the grid, everyone pays more for the power that can.
Why Is PJM's Interconnection Queue a Problem?
PJM's interconnection process has left large numbers of solar, wind, and storage projects waiting years to connect, even when many are ready to build. That backlog is one of the main reasons supply can't keep up with demand.
Common problems developers describe:
- ●Long waits. Projects wait years to learn what connecting to the grid will cost.
- ●Uncertain upgrade costs. Required grid upgrades can change or be reassigned, driving up costs.
- ●Reactive planning. Transmission is planned for today's needs rather than tomorrow's growth.
- ●Slow utility upgrades. Some utilities take a long time to complete the work needed for new connections.
PJM has since approved a fast-track process for shovel-ready projects, but it covers only a limited number of large projects. Demand from AI data centers is growing faster still, as we covered in PJM's struggle to meet AI demand.
What Is New Jersey Doing About It?
New Jersey's Board of Public Utilities held a Resource Adequacy Technical Conference on August 5, 2025, to explore ways the state can secure reliable, affordable power, including options outside PJM's capacity market.
The conference covered three areas:
- ●Load growth. Planning for data centers, manufacturing, and electrification.
- ●Resource mix. Which combination of resources, including solar, storage, and distributed energy, can keep the grid reliable while meeting clean energy goals.
- ●Long-term adequacy. Mechanisms beyond the PJM capacity market, such as long-term contracts.
That kind of state-led pressure is growing across the region. Whether it changes PJM's course will depend on the follow-through.
What Does This Mean for Solar Owners in PJM States?
For solar owners in PJM, high capacity prices raise the value of every kilowatt-hour a working system produces. Existing systems are already connected, so they skip the interconnection queue that's holding back new projects.
But that value depends on the system actually running. Aging inverters, degraded panels, and unclear ownership can quietly cut production.
If your system isn't performing, repowering an aging PV system can restore output using the grid connection you already have.
Start With a Ballpark Estimate
In a region where getting new power online takes years, existing solar is worth protecting. Find out what your existing solar project may be worth before deciding whether to repair, repower, or sell.
Sources: Sierra Club, "Gov. Murphy Joins 8 Governors in Bipartisan Letter Calling for PJM Reforms"; Delaware News, "Governor Meyer Joins Bipartisan Group of Governors"; NJBPU statement on PJM auction; Utility Dive, "PJM capacity prices set another record with 22% jump"
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