Governor Phil Murphy and other state leaders didn’t mince words after PJM Interconnection released its latest auction results. They said the outcome shows a system that rewards profit and outdated infrastructure, while leaving regular people with bigger utility bills.

Analysts are raising red flags too. PJM’s costs for making sure there’s enough electricity on hand jumped from $2.2 billion to $14.7 billion in just one year, according to a report from Synapse Energy Economics. Why? It comes down to a few big shifts: more power-hungry data centers coming online, older fossil fuel plants shutting down, and delays in getting cheaper renewable projects like wind and solar connected to the grid.

One analysis from Grid Strategies said that if PJM had approved just a bit more of the clean energy projects already waiting in line—about 15% more—families across the region could have saved around $7 billion. Another NRDC study found that adding 7 gigawatts of clean power could have slashed prices by more than 60%.

Even PJM’s own independent market monitor said this year’s auction didn’t look fair. A few big energy companies may have had too much control over the outcome. In the end, most of the money went to natural gas, coal, and nuclear. Solar and wind barely made a dent.

PJM blamed red tape, permitting delays, and supply chain issues. But many say the bigger problem is the way the market is set up. Right now, older fossil fuel plants can more easily win contracts, while newer clean energy projects are stuck waiting—sometimes for years.

New Jersey has been here before.

In 2011, the Garden State attempted to boost power generation in-house as a means of cutting costs and reducing dependence on out-of-state suppliers. Courts shot that down, saying it conflicted with federally regulated energy markets—see Hughes v. Talen Energy Marketing, 578 U.S. 150 (2016).

In 2019, state regulators considered withdrawing from PJM’s market altogether. The NJ Board of Public Utilities formally launched a investigation under Docket No. EO20030203, but no exit occurred.

NJ isn’t alone. Other states had their own run-ins with regional grid operators. Illinois and New York, as an example, set up Zero Emission Credit (ZEC) subsidy programs to keep nuclear plants open and support clean energy. Those programs survived despite legal challenges—see Elec. Power Supply Ass’n v. Star, 904 F.3d 518 (7th Cir. 2018), and Coalition for Competitive Electricity v. Zibelman, 272 F. Supp. 3d 554 (S.D.N.Y. 2017).

The underlying issue remains however — states want control over their energy, while federal regulations leave the decisions to grid operators and federal regulators.

So while state officials in NJ want to ramp up clean energy projects and protect residents from further price increases — PJM still sets the guidelines with all major decisions going through the Federal Energy Regulatory Commission (FERC) ….. not Trenton. FERC’s own Order reversing the Minimum Offer Price Rule (MOPR) in 2021 (Docket No. ER21-2582-000) is one example of how market rules shift from Washington, not the states.

Recently, New Jersey joined other states in demanding reforms. They want PJM to increase connection to clean energy, change its auction practices, and stop incentivizing the existing system. So far, no significant changes have been made.

The solutions to lower costs might exist—but the road to implementing them appears difficult.

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