ANNAPOLIS, Md. (WBFF) — The Mid-Atlantic region’s power grid operator is sounding the alarm about state policies accelerating the shutdown of fossil fuel generators as demand for electricity surges and drives up prices to record highs for consumers.

Maryland Gov. Wes Moore has claimed there’s no evidence that his accelerated green energy agenda is increasing electricity bills for residents, despite concerns from PJM Interconnection that a shrinking energy supply is colliding with rapid economic growth.

Spotlight on Maryland asked PJM on Thursday whether Maryland’s energy generation shortfall specifically increased demand on regional energy costs, which drove up its capacity auction prices to a record high earlier in the week.

Jeffrey Shields, the senior manager of external communications at PJM, provided a lengthy response by email.

Existing supply has been leaving the system due primarily to state and federal decarbonization policies and some economics,” Shields said. “In any market, when demand is up and supply is down, there will be an increase in pricing.”

“PJM has been warning of this eventuality for several years now, specifically as it relates to the impact of these supply/demand fundamentals on our ability to reliably operate the power grid,” Shields added.

On Tuesday, PJM announced its capacity auction price for 2026 had jumped to $329.17 per megawatt (MW) – a 22% increase from the previous year and more than 1038% higher than the $28.92 per MW clearing price in 2023, when Moore took office.

What’s a capacity auction – and why it matters

PJM conducts annual auctions to ensure utilities can secure enough electricity when demand spikes, such as during heat waves or severe storms. The price determined in these auctions affects the cost of electricity for customers across 13 states and Washington, D.C.

ALSO READ | Is Maryland heading towards an ‘energy cliff’ due to Wes Moore’s green energy agenda?

As traditional power plants retire faster than replacements come online, PJM says the system is becoming more fragile – and expensive.

“Generators are retiring in Maryland due to a mixture of economic and policy justifications and without replacement generation in place,” PJM warned in a two-page brief after last year’s first record-breaking capacity auction. Maryland, which already imports the majority of its energy, has lost 6,000 MW of electricity since 2018, while adding only 1,600 MW, the brief said.

Moore continues green energy push

At an unrelated event in Baltimore on July 17, Spotlight on Maryland asked Moore if his green energy agenda is disrupting the state’s energy market and costing Marylanders, as they are experiencing a tough state economy.

Not at all,” Moore said. “There is no data that can actually reinforce that being able to say we believe in solar, and wind, and nuclear, and all the different, all-of-the above energy assets, that in any way, is actually hurting ratepayers. In fact, it’s actually helping.”

“The best thing you can do is provide more options for ratepayers. If you provide more options, it’s simple supply and demand, it brings prices down. So what we are interested in is making sure the ratepayers are supported and we can do that while also protecting the environment,” Moore added.

But PJM contends that current green energy initiatives aren’t keeping up with the demand – and new supply is lagging. Shields noted that while PJM has approved 46,000 MW of new generation, much of it remains unbuilt due to global supply chain issues, state and federal permitting delays, and financing challenges.

Offshore wind faces federal setback

Moore has made offshore wind a cornerstone of his clean energy plan. He signed three green energy bills in April 2023, including the Maryland Promotion Offshore Wind Energy Resource Act, or the POWER Act. During the bill signings, the governor announced his accelerated net-zero emissions target for Maryland, aiming to reach 100% carbon-free energy generation by 2035 – a full decade ahead of the state’s statutory requirement.

The governor said that offshore wind would be crucial for the state to replace fossil fuel plants with clean, renewable energy.

“The POWER Act will nearly quadruple our offshore wind goals so we can build off the great work of our partners at Tradepoint Atlantic, our partners at Orsted, and our partners at US Wind to make Maryland the offshore capital of the United States,” Moore said in April 2023.

Spotlight on Maryland reported in early July that the sites previously scheduled to open in summer 2025 remain mostly unchanged since the governor broke ground at the facilities.

When Spotlight on Maryland asked Moore how offshore wind will increase the supply that he says his administration is seeking to accomplish in his all-of-the-above generation approach, he said:

Well, when you’re talking about all-of-the-above energy options, that includes solar, that includes wind, that includes nuclear, that includes all of the various options that we have on board to make sure we are increasing supply,” Moore said. “If you are having increased demand, as we are seeing in the state of Maryland, you have to increase supply.”

“If you do not increase supply, then you will end up having jacked up prices, and that means all the ratepayers get hosed, so what we are trying to do is just provide every single option possible and make it available to people at a scalable way that both brings prices down and bring inventory up,” Moore added.

ALSO READ | Wes Moore, developer vows to push forward with offshore wind despite major blows from feds

Moore’s unclear response comes as the U.S. Environmental Protection Agency demanded two weeks ago that Maryland regulators fix its offshore wind permits, which it said were issued incorrectly. The EPA added that failure to reissue permits in compliance with its terms could void Maryland’s offshore wind approval.

New York utility regulators revoked their permits for a multibillion-dollar offshore wind project last week, citing a shift in federal energy priorities and the need to protect the state’s electricity ratepayers.

“What we’ve seen over the last several months from the federal government hasn’t been a simple change in policy, but a wholesale departure from long-established norms,” said Rory Christian, New York Public Service Commission chairman. “In time, the winds of national policy will shift. When they do, we will be ready. But in the meantime, we have to focus our attention on building the clean energy infrastructure we need.”

PJM’s warning to policymakers

The grid operator outlined three key points for Maryland policymakers to focus on in its publication to reduce record-high energy costs, warning them not to shut down energy sources until replacements are in place.

Avoid efforts meant to push generation off the system until an adequate quantity of replacement generation is online and operating,” PJM said.

Shields reiterated the warning about green energy solutions being pursued across the region in his email response Thursday to Spotlight on Maryland.

Meanwhile, Del. Chris Tomlinson, R-Carroll and Frederick Counties, said he is not confident Maryland is on the right path to protect ratepayers, instead remaining overly focused on green energy solutions as the rest of the nation shifts.

“I don’t think any of the bills that we passed are going to make a dent in what we are seeing on our [electricity] bills month after month,” Tomlinson said. “I don’t ever like to think there is no hope, so I don’t want to say that, but unfortunately, I think it is going to have to get worse until Democratic leadership finally wakes up and says we are going to have to make major changes.”

Follow Gary Collins with Spotlight on Maryland on X and Instagram. Do you have news tips on this story or others? Send news tips to gmcollins@sbgtv.com.

Spotlight on Maryland is a collaboration between FOX45 News, WJLA in Washington, D.C., and The Baltimore Sun.