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Updated: Trump, Governors To Push PJM To Hold "Emergency" Auction, Impose Price Caps
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Updated, Jan. 16
The Statement of Principles signed by the National Energy Dominance Council within the White House and numerous governors of PJM states has been released
Among other things, the Statement of Principles provides:
"
• Provide 15-year price certainty for new capacity resources. This can be accomplished
by holding a Reliability Backstop Auction to procure new capacity resources
commencing no later than September2026. The
• PJM should allocate the cost of any new capacity procured
through the aforementioned Reliability Backstop Auction to load serving entities
(LSEs) with new data centers that have not self-procured new capacity or agreed to be
curtailable. Any remaining costs should be allocated to LSEs based on their remaining
net short positions.
• The existing price collar should be extended to apply to the next two Base Residual
Auctions (BRAs) at the current rate level
• PJM should immediately embark on a stakeholder process to reform the capacity
market to ensure long-term viability and prevent consumers from bearing excessive
ongoing costs, with the expectation that these reforms be implemented in time for the
BRA currently scheduled for May 2027
"
The undersigned governors further agreed to:
"
• Use all available authorities to ensure that their state public utility commissions design
rate class structures to ensure that their states' LSEs allocate their share of the cost to
procure new capacity through the Reliability Backstop Auctions to new data center
loads that have not otherwise procured capacity or agreed to be curtailable.
"
The executed Statement of Principles is available here
Governors signing the statement of principles included the governors of Pennsylvania, Maryland, Ohio, Illinois, New Jersey, Delaware, Michigan, Virginia, West Virginia, North Carolina, Tennessee, Kentucky, and Indiana
A news release from the office of Pa. Governor Josh Shapiro stated that the Statement of Principles "would require" PJM to:
"
• Trigger a special “backstop” capacity auction offering generators up to 15-year commitments to accelerate the construction of new power plants
• Allocate the cost of those long-term contracts to data centers and new large users that have not brought their own power — instead of shifting those costs onto households and small businesses
• Significantly accelerate PJM’s interconnection process, including a firm 150-day deadline and expedited treatment for shovel-ready projects
• Launch a new PJM process to deliver long-term market reforms while extending Governor Shapiro’s negotiated price cap for the next two auction
"
The U.S. Dept of Energy said today that the "direction" to PJM includes:
"
• Providing long-term certainty for new power generation: Provide 15-year revenue certainty for new power plants to accelerate the development of reliable power generation.
• Protecting residential electricity rates: Protect ratepayers by capping the amount existing power plants can charge in the PJM capacity market.
• Ensuring data centers pay their fair share: Make data centers pay more for new generation than residential customers by allocating costs for any new generation procured to data center customers that have not self-procured new capacity or agreed to be curtailable.
• Require data centers to pay for the new generation built on their behalf -- whether they show up and use the power or not.
"
A news release from the office of Pa. Governor Josh Shapiro stated, "If implemented as proposed, the extended price cap would save more than 67 million consumers — including 13 million Pennsylvanians -- within the PJM region approximately $27 billion over the next two years with $5 billion in Pennsylvania alone."
Shapiro, Energy Secretary Chris Wright, Interior Secretary Doug Burgum, Virginia Governor Glenn Youngkin, Maryland Governor Wes Moore, and Ohio Governor Mike DeWine signed the Statement of Principles at the event
See the releases below for more
Governor Shapiro News Release
U.S. DOE News Release
U.S. DOE Fact Sheet
Jan. 15:
President Donald Trump and a bipartisan group of governors from PJM states will announce on Friday several measures to address capacity prices and resource adequacy concerns caused by large loads, according to Bloomberg and other reports
Bloomberg first reported that Trump and the governors will sign a "statement of principles" that would seek implementation of an "emergency" auction in which large loads would procure capacity from new generation under 15-year agreements, seemingly to be mandatory in some form for the subject large loads, based on reports, though details have not been revealed
The subject large loads would be allocated the costs of the procurements, Bloomberg reported, citing a White House official
Reuters reported that the statement of principles would also seek, for two years, to impose caps on prices under PJM's regular capacity market
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January 15, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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