The organization that manages the electric grid for Pennsylvania and 12 other states has moved too slowly in response to skyrocketing energy demand and consumers are paying for it, Gov. Josh Shapiro said Monday.

Speaking at a conference of energy industry leaders and regulators in Philadelphia, Shapiro said PJM Interconnection must make changes, including giving states a bigger role in its governance, or the commonwealth could leave the consortium.

“We need to be thinking about consumers and their costs, something that PJM, I think, doesn’t really spend a whole lot of time focused on,” Shapiro told reporters Monday after delivering opening remarks at the event.

He said governors from each PJM state share concerns about the Valley Forge-based organization’s backlog of new energy projects awaiting approval while peak energy consumption is expected to increase by 20% in the next decade, according to PJM’s forecast. Much of that demand will come from data centers that house the computing power for artificial intelligence.

“We need to move more quickly on these energy-producing projects. We’ve got to hold down costs. If PJM cannot do that, then Pennsylvania will look to go it alone,” Shapiro said.

Virginia Gov. Glenn Youngkin, who spoke via video, said overhauling the state’s power policy was among his first calls for action after taking office in 2022. Youngkin, a Republican, said his administration predicted demand would grow faster than PJM’s forecast.

“Indeed, instead of unlocking investment and fast tracking critical projects, PJM has instead been responsible for bottlenecks and delays that crush jobs, drive up utility bills and leave families and businesses hurting,” he said. “This is a crisis of not having enough power, and it is a crisis in confidence.”

Youngkin said Virginia lawmakers are working on legislation that would allow the state to reassess whether its utilities should remain part of PJM.

“This doesn’t mean that we are walking away, but it does mean that collectively, we recognize we need to represent and protect our ratepayers, and that means sending a clear, unified signal that PJM must modernize,” he said.

PJM was founded in Philadelphia nearly a century ago when three electricity utilities connected their independent grids to share resources and improve reliability. With more than 1,000 stakeholder members, it now ensures the flow of power to utilities in all or parts of 13 states from New Jersey to Illinois and the New York border to North Carolina.

It is overseen by a board of governors through a consensus-based issue resolution process in which member organizations and stakeholders have weighted votes on issues that will go before the board. These include state consumer advocate organizations, like Pennsylvania’s Public Utilities Commission, but the states themselves have no direct input.

The board’s decisions are ultimately subject to approval by the Federal Energy Regulatory Commission.

While PJM’s stakeholder process and meetings are open to the public with agendas and minutes posted on its website, but members of the public are required to register for an account to watch meetings virtually. And while the outcome of votes is public, critics have compared it to a black box because how stakeholders vote on questions is secret.

Lawmakers in several states have proposed laws requiring PJM members to report thier votes to state regulators. They include a bill introduced by Pennsylvania state Rep. Chris Rabb (D-Philadelphia), which passed in the House in July and awaits action in the Senate.

“Utility companies operating in our regional power grid that determine the electric bills, environmental and public health of 65 million people should never be allowed to vote in secret,” Rabb said. “Such decisions must be publicly disclosed. End of story.”

PJM CEO Manu Asthana, who is set to step down at the end of this year, said he’s proud of the reliability that PJM has provided through a series of unusual events during his tenure, including record peak demands, a pandemic, geomagnetic storms and the collapse of the Francis Scott Key Bridge in Baltimore, which threatened a major transmission line.

Asthana said criticism of PJM’s interconnection queue, in which 63,000 megawatts of power projects await review for permission to connect to the grid, is not warranted.

“There’s a lot of mythology and a lot of things that are said about our interconnection queue,” he said, noting that number is down from 200,000 megawatts when the organization implemented reforms in 2023. PJM also notes that it has cleared tens of thousands of megawatts worth of projects that have failed to come online for reasons outside of its control, including site acquisition, permitting and supply chain problems.

PJM has also worked proactively with members to prioritize important projects, such as restarting Constellation Energy’s former Three Mile Island nuclear power plant, now renamed the Crane Clean Energy Center, and redeveloping Homer City, one of the nation’s largest coal power plants, into the nation’s largest natural gas-burning power stations. Both projects will power data centers.

Experts who spoke during panels at the conference agreed with Shapiro, Youngkin and New Jersey Gov. Phil Murphy, who also spoke via video, that PJM is not serving consumers well.

“You’ve got 67 million people who are very concerned, and again, consumers are called voters, and that makes the politicians concerned,” said former FERC Chairman Mark Christie. Christie and former FERC Commissioner Allison Clements were recommended by a bipartisan panel of PJM-state governors to fill vacancies on the board, but neither was ultimately nominated.

“PJM should be reimagined in the governance sense,” Christie said, adding that he wouldn’t interfere with the technical aspects of operating the grid. “The policy making things that PJM does in their political policy, if it’s going to be a regional government for the grid, people who are elected will have a much bigger role in that.”

Vincent Duane, a former senior vice president and general counsel at PJM, said changes need to go deeper than simply giving elected officials a bigger role.

“​​I’m going to be blunt and unpopular when I say that PJM has become ungovernable,” Duane said “Adding seats to an already crowded banquet table with 1,000 parliamentarians with vastly different interests, I think, is going to ultimately leave states feeling disappointed with the outcomes.”

What’s missing is more purposeful and deliberate decision making from a strong executive branch in the organization that is accountable to state utility regulators, he said.

Duane later added that as general counsel, PJM board members often asked him to whom they had a fiduciary responsibility. He said he had trouble answering the question. To say the responsibility was to the marketplace or membership was unsatisfactory.

“Until we can get a good answer to that question, it’s premature to start talking about process and voting structures,” Duane said.

Maryland State Delegate Lorig Charkoudian said the question of fiduciary duty is an important one for the success of policies that elected officials create.

“The vast majority of the stakeholders know who their fiduciary duty is to, and it is to their shareholders,” Charkoudian said, adding that for ratepayers that amounts to a wealth transfer to the market participants who are writing the rules.

“You could go example after example after example, where that is the case,” she said. “And that is why it’s untenable to continue at this moment with this governance structure.”