A growing energy crisis threatens Pennsylvania as the state grapples with surging electricity demand and the retirement of power plants, and without decisive legislative action, the commonwealth could face higher energy costs and unreliable service, warns Christine Martin, president of PPL Electric Utilities, which serves 1.5 million customers in the eastern and central parts of the state.
This looming supply-demand imbalance, known as a resource adequacy gap, has become a pressing concern, and Pennsylvania lawmakers, regulators, and utility companies are calling for urgent reforms to address the issue, Martin wrote in a Jan. 27 opinion piece.
“In just a few short years, unless new generation resources come online to meet significant projected increases in customer usage, our region, and possibly the state itself, will lack sufficient power generation resources, leading to more expensive and less reliable electric service,” she wrote.
The problem stems from two key challenges: First, up to 40,000 megawatts (MW) of existing generation capacity in the PJM Interconnection portfolio — the regional transmission organization serving Pennsylvania and 12 other states — could be retired by 2028, according to a March 2023 PJM report.
Second, wrote Martin, is that the demand for electricity is projected to rise significantly due to the growth of both data centers and electrification across industries.
Currently, Pennsylvania relies on a deregulated electricity market, where competitive generators supply power while utilities like PPL Electric are responsible for delivering it.
However, according to Martin, the market is failing to deliver new generation capacity fast enough, leaving customers vulnerable to rising costs and potential service disruptions.
“While the market was designed to lower costs for customers by encouraging competition, the system is no longer working as intended,” she wrote. “This is evidenced by the skyrocketing power supply prices driven by increasing capacity market clearing prices — up more than eightfold from $28.92 per megawatt-day (MWd) in 2024 to $269.92 per MWd in 2025 — and recently highlighted in a complaint filed by Gov. Josh Shapiro.”
This increase, she added, represents about a $15 per month increase to the supply portion of the bill for an average residential customer in PPL Electric’s service territory. And further supply market price increases are expected, she wrote.
“Despite these higher prices, not enough new generation is being built in the short timeframe it is needed to offset these higher prices,” Martin wrote. “That means our customers are paying, and will continue to pay, significantly more for generation on their electric bills. This is a fundamental flaw in how the PJM capacity market works.”
Martin emphasized the need for a modernized state energy policy to address the looming crisis.
“PPL Electric proposes a more moderate, state-focused approach that will enable Pennsylvania to implement a “no regrets” strategy that addresses impending energy shortfalls and provides the state with additional tools to help protect customers from price volatility and reliability concerns,” she wrote.
One way to do this would be to allow regulated electric utilities to invest in generation resources, up to and including owning and operating generation resources again.
“This would complement the competitive market by addressing resource adequacy gaps rather than relying solely on market forces to deliver a solution,” she wrote. “The solution to our looming resource adequacy crisis lies in striking a balance, one that does not abandon market principles but provides a safety net to ensure that consumers are not left in the dark.”