Consumers on the Sidelines? The Fight Over the Grid’s Future

The U.S. electricity grid is undergoing a dramatic transformation. As coal plants retire, wind, solar, and battery storage now dominate the pipeline of new power projects. Yet in recent months, some policymakers and grid operators have called for a new wave of natural gas plants to meet rising electricity demand from AI data centers and industrial growth.

Supporters argue that gas offers a fast, reliable solution. Critics see a costly, backward-looking move that undermines long-term climate and affordability goals. Too often missing from this debate is the voice of the consumer—the people ultimately footing the bill.

This episode explores the consumer perspective on our rapidly evolving grid with two guests with deep experience at the intersection of grid policy and public interest. Patrick Cicero is the former consumer advocate for Pennsylvania. John Quigley is a senior fellow at the Kleinman Center and former secretary of Pennsylvania’s Department of Environmental Protection. Together, they discuss what the energy transition means for ratepayers—and the policies needed to ensure a clean, reliable, and equitable grid.

Full Transcript

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone. The mix of resources powering our electricity grid is rapidly shifting across the country. Traditional fossil fuel generators like coal are retiring, while clean energy resources such as wind, solar and battery storage account for the vast majority of new resources that are lining up to connect to the grid. Overall, electricity markets appear to be steering toward renewables. But recently, there has been growing pressure from policy makers and market operators for the accelerated construction of new natural gas- fired generation to meet electricity demand from AI data centers and a growing manufacturing sector.

This push for more gas generation comes as more than a decade-long gas power boom has begun to dwindle, and supporters frame gas as a quick and reliable way to meet new demand. Detractors in and around the industry have just as strongly challenged these assertions. Yet the perspective that is too often lost in these types of debate is that of the consumer, the rate payer who ultimately foots the bill for the electrical grid.

On today’s podcast, we’re going to explore the consumer perspective on our rapidly changing grid with two guests who have deep experience at the intersection of grid policy and public interest. Patrick Cicero is Chief Counsel at the Pennsylvania Utility Law Project, and served until January as Pennsylvania’s consumer advocate, representing ratepayer interests before the state’s utility regulators. John Quigley is a senior fellow here at the Kleinman Center, and a former Secretary of Pennsylvania’s Department of Environmental Protection. The two will explore the evolving relationship between a changing grid and the priorities of consumers, and examine how Pennsylvania’s electricity future reflects broader national debates. John and Patrick, welcome to the podcast.

John Quigley: Great to be here.

Patrick Cicero: Thanks, Andy.

Stone: So Patrick, you were the consumer advocate for the state of Pennsylvania until earlier this year. This is an office that exists in many states. Yet I think it’s probably fair to say many people may not be that familiar with what the offices do. Could you start us out by talking about the role of the consumer advocate and what energy issues they typically engage in?

Cicero: Yeah, thanks, Andy. I think it’s a really great question. So the Office of Consumer Advocate is a small state agency that has been around in Pennsylvania since 1976. In the mid- 1970s, many states created these offices as a result of the energy crisis that was coming about, as well as, really, the crisis in the regulatory space. Lack of confidence at that time in some of the regulatory commissions. Part of the problem was that there were no voices for your average consumer, whether that’s residential customers or small commercial customers who use, a couple thousand kilowatt hours of electricity every every month. The large industrial customers were there with their representatives, the utilities were there with their representatives. But it was really a pretty wonky and technical space, and so it really wasn’t realistic for average consumers to be there.

So offices like the Pennsylvania Office of Consumer Advocate were created. And they are the statutory representatives of small consumers, residential consumers, before the Pennsylvania Public Utility Commission, to ensure that when any of the electric, gas, water, wastewater utilities go in for a rate case and/or other cases involving energy procurement, that consumers are represented. So that office, which I had the pleasure of leading for a little more than three years, is in every case before the Public Utility Commission dealing with energy issues. It’s a really important office that has the right, by statute, to be in those cases, and to look under the hood, so to speak, to ensure that the electric utilities, the gas utilities, and other regulated public utilities are not unfairly taking advantage of consumers.

Stone: So it really looks out for consumers in this extremely technocratic industry.

Cicero: Yeah, that’s exactly right.

Stone: And you’re now Chief Counsel at the Pennsylvania Utility Law Project, which is related. Is that correct?

Cicero: Well, related, yes and no. I mean PULP, the Pennsylvania Utility Law Project, is not a state agency. We are a specialized component of a larger legal aid office, Regional Housing Legal Services. PULP is based in Harrisburg, and it’s a part of the broader Pennsylvania Legal Aid network. So our office, which is— again, I use the word “legal aid,” and it really is about representing the interests of low income and economically vulnerable consumers in this space. Our mission is to secure just and equitable access to safe and affordable utility services for Pennsylvanians experiencing poverty. And we really work to try to achieve this through representation before the Pennsylvania Public Utility Commission, advocacy before the General Assembly on behalf of our clients, education to the public at large, and support to low-income individuals and affected communities to ensure that they have the resources necessary to understand their energy and utility bills and to meaningfully participate in the process in which their rates are set.

So we, too, are involved in rate cases before the Pennsylvania Public Utility Commission, as well as other issues before other state agencies such as the Department of Environmental Protection, the Department of Community and Economic Development. And we work on wholesale electricity market issues, which really we’ll begin to talk about here today, before PJM interconnection as well. So our role, unlike the OCA’s role as a state agency statutorily entitled to participate, we are a legal aid office. We represent parties as interveners in cases, and work hand in hand with a lot of what the OCA does, but have a very discrete focus on economically vulnerable Pennsylvanians.

Stone: So on that issue of electricity that you’ve just been talking about, switching here to John. John, the electricity resource mix is now undergoing a very fundamental shift. Could you walk us through the shifting grid landscape, and key issues like resource retirements and interconnection queues? What’s driving this change now?

Quigley: Well, you’re right, Andy. It is a fundamental shift that we’re in the midst of right now, and nobody has really gotten their arms around the issues completely. But nationally, in the last 15 or so years, coal-fired generation, which used to really drive the grid— coal-fired generation has declined almost by half, but mostly because it can’t compete with cheaper natural gas-fired generation. And so today, coal-fired generation has dropped to an all time low of 15% of US electricity production, and announced closures of additional coal fired power plants will reduce that number probably by another third.

So we’ve seen, in the last decade, a real upsurge in gas. Nationally, we get about 43% of our electricity from gas. But now we’re in a situation where renewables are displacing gas. They’re doing to gas what gas did to coal. And so renewables are displacing gas because renewables are cheaper, and that’s I think especially so for solar. Solar power is the least-cost option for new electricity generation. And solar is the fastest-growing source of US generation by a significant margin. In fact, last year, wind and solar-powered together generated more electricity from coal for the first time ever in the history of the US. Add to that that grid scale battery storage is growing extremely rapidly. In fact, it grew last year by 66%. And clean energy by and large, because the market has moved there, because it’s cheaper—clean Energy, mostly solar and storage, accounts for about 96% of all the proposed new generation in the country.

And not only did composition of our electricity mixes change, but it’s the size of the projects. And that’s one of the inherent challenges here. The old paradigm was smallish numbers of large generators that ran most of the time. The new paradigm is large numbers of smaller, intermittent, clean energy generation, plus storage.

To put some numbers around that, Jigar Shah, who directed the Department of Energy’s Loan Programs Office in the Biden Administration, recently posted on Bluesky that in 2005, for example, we added 200 power plants to the grid nationally. In 2024, we’ve added 10,000 plants that were one megawatt of generation or larger. And those one-megawatt projects have just as much complexity from an interconnection standpoint as the 500-megawatt projects.

So by and large, we’re in a different world for grid managers now. And their processes and policies haven’t caught up. The rules continue to favor the old, large generator paradigm, and that means incumbent generation. For example, PJM’s interconnection process was so flawed, couldn’t accommodate new clean energy, that the Federal Energy Regulatory Commission ordered them to fix it. And while designing a fix, PJM actually stopped approving interconnection requests for about two years. So we have a huge backlog of proposed clean energy that’s essentially sitting in the interconnection queue waiting to be approved. And that situation applies nationally as well. So we’re in a really different world than grid managements have been used to, and they have not caught up.

Stone: So as the makeup of the grid is changing, and this is accelerating, as you just mentioned, John, there has been also, at the same time, an increasing tension between the priorities of grid reliability, the affordability of electricity, and also the need to address climate change as aggressively as possible. And depending on who you talk to, these priorities are either compatible or seemingly incompatible with each other. I want to ask you here, Patrick, who are the players in this debate, and what perspectives are they bringing or not bringing to the table, in your view?

Cicero: Yeah. I think it’s a great question, Andy. And John did a really good job of setting up the kind of fundamental paradigm shift that’s happened over the last decade or so. And let me just start with grid reliability. So I think that everybody across the board, independent of ideological interest, has an interest in ensuring the reliability of the grid. Meaning that we have energy on demand, 24/7, 365. Right? I don’t think there’s any party in this space that would suggest that that somehow is a negotiable.

So the question really becomes, grid reliability at what cost? And grid reliability, given what technology and with what attributes associated with it? And the attributes, what I mean is, are we using a paradigm that we’ve used forever, which is, we need completely dispatchable generation? What I mean by dispatchable generation is the ability of the grid manager— in this case, PJM— to kind of call it on demand. To be programmed on demand, at the request of power operators who say, “Hey, come on.” “Shut off.” Et cetera. That is really the paradigm that many of the kind of legacy fossil fuel generators say is of paramount importance in terms of maintaining grid reliability. And it’s one that our grid operators kind of latched on to and said, “Yes, dispatchable generation is the is the key that we need.” And again, these are all degrees of of what’s happening.

And so with regard to grid reliability, the question is, can we figure out how to— and I think the answer is yes— maintain that reliability while also pursuing what I think are two fundamentally critical goals, which is maintaining affordability for end use customers, those people who are actually paying the bill— whether it’s residential customers, small businesses or large industrial customers, and in the case of the clients that I work with, low income customers in particular—  and at the same time, recognize the fundamental climate crisis that we’re in whereby we say, “We need to reduce methane emissions. We need to reduce carbon emissions from our generating sources.”

And so depending where you sit, you elevate each of these things at various points in time. And so you have the legacy fossil fuel generators who say, “Grid reliability, that’s what’s paramount. That’s why we’re here. That’s— we’re doing it. We’re agnostic to all these other things.” You have consumer advocates who say, “Yes, but we need affordability. And many of us also say we need consideration of climate impacts and meeting, in various other states, climate goals, et cetera.”

And then you have PJM, which says it’s acting as this grand arbiter between. But the reality is that, as we’ll talk about as we move forward, that system is really beholden to existing paradigm. The existing status quo of how things work. I hope we get to talk about it. It’s why, increasingly, neutral arbiters of policy— so state actors, in this case— are going to have to put their weight in on this and say, “We can do all three of these things. Fundamentally grid reliability, fundamentally affordability, and climate goals.”

And to John’s point, if you want to maintain this kind of three-legged stool of priorities, look at the interconnection queue. The reason that 90-plus percent are renewable projects is because that’s what’s economically viable. And so do we need to just figure out how to continue to blend in those approaches?

Stone: You know, I want to push a little more on a point that you mentioned a moment ago. You know, you talked about cost. And when I think about what the consumer advocates do, I’m often hearing or thinking about the consumer advocates really putting cost above everything else. Is cost truly the main focus? You kind of started to talk about that, but I want to understand more the hierarchy of priorities here. And obviously, consumers are not a monolith, right?

Cicero: Oh, yeah, absolutely. I mean, consumers aren’t a monolith. I think that in terms of cost, it is the first principle for consumer advocates, we want to try to have least cost procurement over time. That’s actually the statutory standard in Pennsylvania. It is a beautifully nebulous standard that tries to drive a portfolio approach, to have least cost over time, right? That doesn’t mean the lowest cost at any given time. And so affordability doesn’t necessarily mean the cheapest energy right now. It means the cheapest energy over a longer period of time, including right now, which may mean that you have a blended rate which maintains both affordability now and affordability in the future.

Look, it’s not in consumers’ interest to double down on the kind of generation that we’ve done for the last 50 years. Because it’s increasingly expensive. It increasingly is running headlong into state and federal priorities that are different. And we’ve seen, with the intersection that John noted at the beginning about natural gas-fired power plants kind of eating coal, you’re having an imbalance in the generation that’s existing now, where natural gas really is driving the costs. And while that has, since 2008, at least, been cheap, I’m not sure that’s necessarily going to be the case into the future.

And so yes, there’s often a least-cost cost approach first. But I don’t know any consumer advocate who would say that’s the only thing you can look you should look at, and you shouldn’t consider other alternatives. Rates need to be affordable for end users. That’s the bottom line. And that we do have deep concerns about affordability and the ability of customers to remain interconnected. But part of this is really being exacerbated by the policies that PJM has deployed in its capacity option. We have huge increases in the cost for building new capacity. And what that’s done is, it’s driven our cost to the tune of a pretty significant amount beginning this June.

Stone: So I want to jump in and look a little bit deeper at what actually is going on with gas right now in the market. And John, turning to you for a moment here. So there’s obviously this surge in energy demand— as you’ve mentioned, AI, manufacturing, electrification generally— and there have been a number of initiatives in PJM— which, for people who may not be familiar with it, is the grid operator in the kind of Mid-Atlantic into the Midwest part of this country. Also in other markets. In ERCOT, we’ve seen it. We’ve seen Facebook propose some— or maybe moving forward at this point, with some some gas projects to support data centers in Louisiana. So we’re seeing all these things happening. Can you tell us a bit more broadly, John— on a national scale, this push to gas, it’s all coming at one point.

Quigley: Yeah. And it’s basically kind of a Chicken Little “sky is falling” point. We’ve been in a kind of a load-growth panic for the last few years, driven largely by the assumed or predicted proliferation of data centers and artificial intelligence. In 2024, Lawrence Berkeley National Lab estimated that US data centers could double or even triple their electricity consumption and maybe even account for as much as 12% of all US electricity by as soon as 2028. The Electric Power Research Institute, they put their estimate about 9% by 2030. But anyway you slice it, significant increases driven by AI. And grid planners, nationally, bought into that frenzy, despite the fact that not all these data centers are likely to be built. Nobody was factoring in things like improvements in chip efficiency and overall computational efficiency. In fact, the president of the Electric Power Supply Association warned of what he called “irrational exuberance” in overestimating load growth.

But these predictions have held sway, and the response to these forecasts by regulators and grid managers have been predictable. As Patrick said, they doubled down on the old paradigm, even though companies like Google and Microsoft are publicly committed to 100% clean energy for their data centers. I think maybe even because of that, the gas industry— and frankly, its debt legislators in places like Pennsylvania and Texas and elsewhere, are all pushing for new gas-fired generation as the response.

And unfortunately, grid managers like PJM see gas as a quick fix, because they view it as firm generation. It actually isn’t, and we can talk about why that is. PJM has a so-called “reliability resource initiative” that was approved by FERC in February. The upshot of it is that PJM is letting gas plants jump to the head of the line in the interconnection queue in, really, what is a panicked effort to get more gas generation online. And in fact, the results of that just came out this week. About six new gas power generation projects are being fast tracked as a result of that initiative. And I read this morning that MISO, the Midwest Independent System Operator, wants to do the same thing. And there’s even talk in Congress of doing something similar nationally.

Then you have, in places like ERCOT in Texas— the Electricity Reliability Council of Texas—  while they are seeing immense growth of clean energy, Texas legislators have stepped in and they created a $5 billion low interest loan program a couple years ago to subsidize the construction of new gas-fired power plants. But because of the success of renewables and batteries in ERCOT, gas plants are actually dropping out of that program. Not to be denied, now, Texas legislators want to stifle clean energy growth. They’re actually considering a bill that would require half of new power plant capacity to come from gas.

Now, here in Pennsylvania, the chair of the Senate Environmental Resources and Energy Committee has introduced a bill that essentially directs state agencies to identify suitable sites for gas generation, and provide low interest loans and grants, like Texas, to finance their construction, maintenance, modernization, and operation. So there’s been a complete overreaction by some policy makers, many of whom heretofore have touted the free market as the be all and end all. Now they want to stifle the free market, stifle clean energy growth, with these market distortions that are only going to delay the energy transition and raise costs for consumers. So a lot of arguments have been made, but not a lot of them are holding water when it comes to justifying this dash to gas.

Stone: Well, I want to point out an interesting point. You mentioned a PJM’s Reliability Resource Initiative, the RRI. That’s the plan that PJM has put in place that allows certain large shovel-ready generators to jump ahead of everything else in the interconnection queue so it will be built more quickly. Just to put that into perspective, as you all mentioned earlier, over 90% of the resources that are waiting to connect to PJM are renewables. As you mentioned, John, about two thirds, or slightly more than two thirds of the new generators that have been selected by PJM in this RRI initiative are actually gas. So that shows you how dramatic the shift has been.

I think one of the interesting points here also is that in what’s happening in PJM and in ERCOT and in these different markets, gas has been put forward as being synonymous with reliability. And gas is a generally reliable resource. But as we’ve seen in recent years, in particularly difficult conditions— cold winter conditions— gas has not been particularly reliable. So is this correlation between gas and reliability also, potentially, not completely reflective of what we’ve seen?

Quigley: Absolutely. The simple fact is, gas is not all that reliable. The Union of Concerned Scientists did a study that looked at five winter storms over the past decade that threatened grid reliability, and they found that in each case, gas plant failures were essentially the primary cause of grid disruptions. More recently, in January of 2024 during winter storm Gerri, gas-fired power plants comprised over half of the forced outages in the PJM service territory. The Concerned Scientists study also found that gas plants have reliability issues in hot weather, during high summer temperatures and droughts. They also tend to push gas generation offline.

And here in Pennsylvania, again, just from a reliability standpoint, recently, the Natural Resources Defense Council submitted some data to a Public Utility Commission docket. They calculated that if the existing gas fleet in PJM could increase its reliability from currently what is now about 76% during winter storms, to an achievable 90 to 95% there wouldn’t be any imminent capacity problem at all in PJM, and no need to panic-approve new gas generation. And when you even look at PJM’s numbers, PJM’s own data show that solar-plus-battery plants can have higher reliability values than gas plants.

So this argument that only thermal generation is reliable doesn’t withstand scrutiny. And so much so, that actually in July of last year, PJM released the results of an analysis of the impacts of the clean energy transition in the PJM grid. And PJM itself found that a grid powered by as much as 93% carbon-free electricity could still be reliable, and in fact, that this kind of grid is achievable as soon as 2035. But the problem is, PJM is not acting on that. And they are still trapped in the old paradigm.

And that not only condemns us to continued unreliability issues, it’s also going to raise costs. And I want to emphasize this for a second. Natural gas is increasingly expensive. The Biden Department of Energy in December released a report that warned that unrestricted exports of gas are going to increase natural gas prices by about 31% by 2050. And LNG exports have tripled over the last five years. They’re projected to double again by 2028, and could double yet again under all the existing LNG authorizations. And in fact, this year, for the first time, the total value volume of us natural gas exports is going to exceed the total amount of gas consumed by the entire US industrial sector.

So we are transforming domestically-produced natural gas into a volatile international commodity that’s going to inevitably raise domestic prices. It’s going to hurt consumers, not only raising their own heating bills, higher electricity bills, higher cost of goods for US manufacturers— which is also going to hurt their competitiveness. And as you mentioned, the cost to build a new gas plant may have tripled in the last couple years. And they’re going to rise further, due to whatever tariffs are eventually going to be imposed. So any way you look at it, locking in new gas-fired generation is going to raise costs for consumers, it’s going to raise the price of electricity, and there are cheaper alternatives, i.e., clean energy.

Stone: Well, it’s interesting. Judy Chang, who is one of the FERC commissioners who weighed in on PJMS proposal and was actually the one dissenter against that proposal, pointed out that PGM did not heavily prioritize in-service date for the projects that are coming through this this queue. And if you’re looking for reliability, and reliability is an issue in the very short term, you would have thought that that in-service date, as she pointed out in her dissent, would have had a higher prioritization in selecting the projects. You’ve also mentioned, I think, on the gas turbine side, there’s a shortage of turbines. There’s a backlog of turbines. So any projects that are coming through may be several years before those turbines even ready to be to be put in place. Now, Patrick, I want to jump to you a little bit more on that cost issue. John did start to raise concerns about the cost or the potential volatility of gas. What is your perspective from the consumer side of things?

Cicero: Well, I think John’s absolutely right. The data that I’ve seen suggests that here in Pennsylvania and all across kind of the PJM footprint, when we had a big winter storm— winter Storm Elliott in 2022— it was the fundamental unreliability of the gas system that almost caused us to go into a blackout. And, you know, it’s really because PJN did not sufficiently account for the risk of simultaneous plant failures in a very short period of time. And the connection between the increased interdependence between the natural gas pipeline infrastructure that not only delivers sufficient amount of gas to gas-fire power plants to generate electricity, but those same pipelines flow natural gas into states for purposes of natural gas distribution utilities for home winter heating, for natural gas. So that kind of linkage that now exists between the electricity grid and our natural gas system has not really sufficiently been taken into account by PJM prior to this recent iteration of their capacity option, which really is the cause for the higher prices. There was a major de-rating of the gas fleet from reliability of 92 to 95% to something like 63% to 70%. And that is really why we have a capacity crisis. It’s not like we don’t have sufficient installed nameplate capacity. It’s just that the capacity for being able to produce on demand has been derated for these gas fleets.

So there is this huge risk. And I think John brought up LNG. I think that is a significant concern for consumers. Currently, Pennsylvanians have benefited from abundant Marcellus Shale natural gas, which has led to lower commodity costs on the heating side for natural gas, but also then on the electricity side. That is what’s allowed wholesale market prices to be lower than they’ve been for a while. But putting aside whatever public policy debate we can have about the advantages of Marcellus Shale for domestic gas use, now what we have is that the gas drillers, producers, are increasingly liquefying this and shipping it to Asia and Europe.

And so what we fear, from the consumer side, is natural gas, rather than being priced domestically, will be priced like oil is. Will be priced internationally. So if producers can say, “Why in the world would I sell this domestically, when I can make much more money selling it internationally?” It really creates a conundrum where there’s an interconnection and a deep connection between the world gas market and the US gas market. That is unequivocally bad for consumers, to the extent that we have something in the neighborhood of 40 to 50% of installed capacity in PJM being electric-fired gas, combined cycle, combined turbine plants. That’s a problem, right? So from a cost perspective, when the fuel is being priced on a world market, that really becomes somewhat problematic.

You mentioned for Commissioner Chang’s dissent on the RRI, and this kind of— seemingly, put your thumb on the scale towards gas resources. It’s a concern, right? We think that PJM and FERC should be fuel-agnostic. Attribute first. When can capacity be built, and does it have the right attributes necessary for grid stability, for producing energy, et cetera? And, you know, the results of the RRI really do show a preference toward these up-rates of new gas, as well as new gas. There’s something like 12,000 megawatts that were allowed to kind of jump the line in the queue. Sixty-one-hundred or so of those are new combined-cycle gas plants. That’s more than half, and that’s significant in terms of what prioritization is being given to gas plants.

So, I see this as indicative of some of the challenges inherent with PJM. They like to hold themselves out as having markets, and being the air traffic controllers of the electricity system. But it’s like if the air traffic controllers were the ones who put in the orders for the planes, and said, “We’re going to choose these planes at these costs, and these are the planes we’re going to run at these airports.” That’s kind of the way they’ve manipulated, to some degree, the markets that they’re offering to incentivize the building of energy resources in our system.

Stone: So I want to ask the two of you, just before we go any further— none of us are engineers, as far as I know, or grid modelers. And we’re talking a lot here about the types of new resources that are coming onto the grid. We’ve talked about some of the potential opportunities and challenges with gas. If we are looking to shore up the amount of resources, the available supply of electricity on the grid, in relatively short order to meet these capacity challenges that are coming our way, what are some of the alternatives to simply switching to gas or bringing more gas onto the system? What are those alternatives? I’m sure renewables can do some of this transmission grid upgrades. But John, what are your thoughts there?

Quigley: We need, certainly, to not put all of our eggs in any one basket, even renewables. But there’s all kinds of solutions to managing and accommodating growth of AI, certainly in the short-to-medium term, without any kind of a panicked rush to new generation. And I think first of a really important study from the Nicholas Institute at Duke University. They found that planning for load flexibility at data centers can actually eliminate any near-term need to build new gas plants to meet that growth, and that this allowing for demand response at these data centers could allow about 100 gigawatts of new load to be added without building any new generation. So there’s a tremendous amount of what they call flexibility-enabled headroom to accommodate any near-term increase in demands.

There are other approaches, like energy parks. Co-locating large loads, like data centers, with new clean energy, using one grid connection. Something called “power couples,” which is building data centers and new clean energy near existing gas peaker plants, taking advantage of their grid connection. There are certainly tools to increase the capacity of the existing grid to accommodate new growth that we’re really not looking at.

But at the end of the day, I think there’s a couple of points that need to be made. Number one is that solar power can be built twice as fast as gas-fired generation. And that’s even before you get into the five-year turbine backlog that the industry is seeing. And the second point is the advent of batteries. I did note, with some surprise and some little bit of optimism, anyway, that this latest PJM solicitation— there will be five battery projects totaling over two gigawatts of battery storage coming to the PJM service territory as a result of this resource initiative. That’s a hint of what’s to come. When you look at the scale of battery development, it nationally increased 63% last year alone.

The real long-term solution, in my personal opinion, is definitely a portfolio of approaches. But looking at the cost of solar and battery storage, we’ve got to figure out smart ways to accommodate as much of that as we possibly can. It’s 96% of what’s waiting in the queue anyway. We need to really focus on that, in my estimation, along with some of these short-term grid management strategies that we’ve never had to consider before, like load flexibility at these large load sources like data centers. So there are tools there that are not being taken advantage of. And I think as Patrick said earlier in the podcast, state officials in particular need to push regulators. We need to push FERC, we need to push PJM, we need to push even the Public Utility Commission, to embrace these other tools that are now being relegated to the sidelines.

Stone: So John, to take that point a step further, Shelley Welton, who is here at the Climate Center, has done quite a bit of work on grid governance. And she advocates strongly for governance reform. What impact might governance changes at the grid operator have on the issues of reliability, resource adequacy, et cetera, going forward?

Quigley: I think they can fundamentally change the conversation and shift the paradigm. And I want to see if I can try to digest Shelley’s work. Shelley and her colleagues published an important report called The Key to Electric Grid Reliability: Modernizing Governance. It was published in March of 2024. And they’re arguing that basically, the primary cause of grid unreliability isn’t the changing energy mix, isn’t the fact that renewables should be displacing fossil fuels. But it’s the fact that grid governance has failed. And that includes the Federal Energy Regulatory Commission, the Nuclear Energy Regulatory Commission, independent system operators like PJM, and public utility commissioners at the state level.

The way we govern the grid now has some really critical flaws. There are jurisdictional silos. Nobody talks to each other. There’s no cross-communication. There’s certainly inadequate coordination. There’s way too little public oversight and input, and that might be the most important thing. And fundamentally, there’s a failure to understand the nature of the problem, the nature of reliability issues, basically because the current solution set favors incumbents. And there’s some politics involved here. And we are in a system that was built by and for incumbent generators, and everybody is reluctant to change that. So there’s some inertia that has to be overcome.

But the result is that the way we govern the grid now impedes clean energy development. Clearly, when you look at the grid and not only what’s on the grid, but what’s proposed and the interconnection queues—almost all clean energy. We don’t do sound transmission planning. We don’t deploy grid-enhancing technologies like reconducting and so forth. So the solutions are, we’ve got to break down the silos. We’ve got to enhance coordination. We’ve got to broaden the solution set so that regulators are required to look at clean energy and storage in a serious way, and not reflexively go to gas and thermal resources.

And there needs to be more public involvement. So state leaders, for example, like— Governor Shapiro, to his credit, has pushed PJM in response to some of their moves. We need to see a lot more that. But we need to see more public involvement, a public voice. And Patrick, who did, honestly, I think, some great work as the advocate in Pennsylvania, and continues to do important work in his current position— we need those voices to be amplified.

And if we’re successful there in reforming grid governance, we have an opportunity to— again where the rubber meets the road— propel lower cost, clean energy generation. Lower electricity prices, that are going to benefit all consumers, especially low income consumers. So we’ve got to democratize this process in a very significant and in a very real way.

Stone: Well, getting to that democratization. So Patrick, the consumer advocates do participate in the PJM stakeholder process through a body called the Office of the Consumer Advocates of PJM States, which represents the different consumer advocates offices of the different states in PJM in the market. But there is no consumer advocate on the PJM board. Give me your thoughts on the sway, I guess you’d say, of the consumer advocates in the stakeholder process in this market, and what adding a consumer perspective to the board might mean?

Cicero: You’re right. There’s no consumer representative on PJM’s board. There’s no representative of load, right? There’s only the supply. There’s transmission owners. There’s— well, you know. What you have with PJM— and let’s not forget, PJM really started as a trade organization of transmission owners back when utilities were vertically integrated. Much more. Meaning, the incumbent utility in the state owned the generation. And then they also had these subsidiary agencies which were interstate transmission. They formed PJM, to pass back and forth energy across state boundaries and to control that flow. It has evolved into this entity that has an incredible amount of power and authority to set and compel not only transmission policy, but in many states like Pennsylvania, where we have a restructured market, to encourage, incentivize what kind of generation gets built and kind of set those rules.

So having a consumer voice at the board, I mean— I don’t want to be Pollyannish about it and say that this is going to solve everything. But it is critical in terms of providing a voice that has no vested interest in the outcome of grid governance other than the end users who benefit from it. There’s not an economic interest associated with it from a transmission or a generation standpoint. It’s only the interest of the end user. And I think that that could be an incredibly , incredibly important portion of this.

But just to the broader point, I cannot agree more that grid governance needs to be overhauled and a solid look at every layer of this needs to be addressed. Even in the state of Pennsylvania, we do not have, currently, a statewide entity with the authority to handle siting decisions for key energy projects. That’s important, right? The Governor’s proposed a Reliability Energy Siting and Electric Transition board, the RESET board, as a package of bills. You know, the devil’s in the details on how that’s implemented. But at the core, this kind of technology-neutral authority that would be authorized to approve generating facilities that meet minimum capacity thresholds is critical in terms of getting things done quickly. So not only do we have work to do in terms of grid governance, we have work to do inside our own house in terms of Pennsylvania’s role in allowing shovel-ready projects to overcome bureaucratic obstacles, to ensure that we have reliable energy at affordable prices while meeting climate emissions reduction targets.

So I do think there’s a lot of work to be done. Right now, the consumer advocates, through CAPS, which is the consumer advocate of the PJM states, has a voice in the stakeholder process. But they can never win. Their voting authority means that the way that sector-weighted voting works is the transmission owners really are always going to be able to overrule anything that consumer advocates wants. So you have to really build alliances in that space, which are fine. But it’s very infrequently that the interests of consumers and the interests of generators align. And so that’s what creates some kind of problematic dynamics.

PJM is relatively unaccountable. They are a FERC federal tariff utility. Transmission operator utility. They’re not government. They don’t make the votes of their board public. There’s no kind of right-to-know obligations associated with PJM. They operate under the rules that they create, subject to the membership agreements of their members. And, you know, it’s like any other membership organization. They can agree to be as transparent or not transparent as possible.

So it is extraordinarily problematic. I mean, you know, I think the Public Utility Commission is a little opaque, but at least we have the ability of interested parties to participate in processes with due process. We have the ability to exercise rights under state right-to-know laws, and ultimately, the public utility commissioners are accountable to the appointment authority of the governor and the confirmation authority of the Senate, which creates accountability with public elected officials. None of that is true with PJM. So having more voices that represent the interests of consumers at those tables, and specifically at the biggest table that matters, the PJM board, is critical.

Stone: You know, Patrick, I’d like to finish up here with with a final question. And it’s a very Pennsylvania-specific question. In Pennsylvania, there has been an ongoing drama for several years now around whether the state would join RGGI, which is the Regional Greenhouse Gas Initiative. It’s a carbon cap-and-trade market in the eastern United States. The former Governor, Tom Wolf, had taken the steps to get the state into RGGI. That has now been on hold due to some legal issues. It’s being reviewed by the State Supreme Court. When you were in the office of the consumer advocate, what was your perspective on RGGI? Good thing for consumers, good thing for the state generally? What were your thoughts?

Cicero: Well, you know, my thoughts then and now are that RGGI is outside the direct lane of the consumer advocate, or even low-income advocate, because it doesn’t necessarily deal with the regulation of public utilities. So, you know, there were lots of times where I was pulled on one way or the other to get drug into picking a side. Pro-RGGI, anti-RGGI. My response is that RGGI can be good and RGGI can be bad. And, you know, it really depends on what we do with the proceeds, right? This can generate a lot of money by allowing the sale of carbon allowances, which really mean— you think about those as a limited license to pollute that can be sold, right? And, you know, the money generated from that can do a lot of good things. It can offset the costs associated with those allowances for consumers. It can invest in deeper energy efficiency for businesses and consumers. It can work to transition the way we generate electricity in the future. All of those would be positive things in terms of meeting this affordability, reliability, climate emission reduction essential paradigm, while at the same time ensuring we have an adequate workforce for Pennsylvania to work in.

So, you know, I am agnostic as to whether RGGI succeeds or fails, because what really matters is what happens with the proceeds if it succeeds. The current governor, Governor Shapiro, has proposed the PACER Program, the Pennsylvania Climate Emissions Reduction Act, which is like RGGI, but it’s not at all the same in that it would essentially produce Pennsylvania-specific carbon allowances. Something in the neighborhood of 70% of the revenue associated with that would go back to consumers. Those are good things, if it produces the goal of also shifting the paradigm in terms of the way electricity is generated in Pennsylvania, but holds harmless for consumers, essentially, the cost increases associated with it.

By the time this podcast airs, we’ll have had the argument in the Pennsylvania Supreme Court— it’s scheduled for May 13— in which the court will hear about the permissibility of RGGI. We don’t know when they’ll rule, of course, but we look forward to that. But really what matters, in my judgment, independent of the good and the bad, is, what happens with the proceeds? Because what we don’t want to happen is they just get sucked up by the state to be used for other purposes. They must be used, whether it’s RGGI or PACER— they must be used to offset costs to consumers, to mitigate the kind of environmental impact associated with climate emissions, to have long term energy efficiency and weatherization, and fundamentally, to shift the paradigm about how we generate electricity. If they’re used to do that, those are positive things. If it’s just another revenue source for the General Assembly, then you’re just asking consumers to pay a de facto tax increase to fund the priorities of the General Assembly. So that’s not appropriate, in my judgment.

Stone: Patrick and John, thank you both very much for talking.

Quigley: Thank you.

Cicero: Thanks a lot. Really appreciate the opportunity.