Pennsylvania's Energy Leadership Depends on Competition

In every way that matters, energy is life. For the half-million Pennsylvanians who work in manufacturing – people who show up every day to make real things from real materials – electricity is not an abstraction. It is the difference between a shift that runs and one that doesn’t. It is the difference between a Pennsylvania address of origin on a product, and a Chinese one.

I’d rather not.

Pennsylvania is not some passive bystander in the American energy story. We are the nation’s top electricity exporter and the biggest producer on PJM, which itself is the biggest grid in the world. We did not earn that distinction by relying on price caps or government-managed monopolies to make investment decisions for us. We earned it through a competitive market that forces suppliers to perform, punishes failure, and rewards innovation.

Prices have increased recently, but that’s a product of supply (tamped down by excessive red tape and regulatory uncertainty) not being able to keep up with demand.

The competition critics, including Gov. Shapiro, will say that rising electricity prices prove the market has failed. They have it exactly backwards – the markets are screaming that new generation needs to be built. One thing I know from working with manufacturers for the better part of three decades: the way you fix a shortage is not to punish the people being asked to solve it. And that is precisely what a permanent price cap does.

On the horizon, we are seeing the crest of a coming wave of energy demand from AI data centers, advanced manufacturing, and electrification. Forecasts vary wildly – from 40 gigawatts of new U.S. demand by 2028 to over 80 gigawatts, depending on who you ask. That uncertainty itself is an argument for competitive markets, not against them. A wide range of demand projections is precisely the kind of situation where you do not want a monopoly utility making a billion-dollar bet on your behalf with your ratepayer dollars underwriting the risk. Competitive markets let private investors take that risk. If they’re wrong, they bear the loss. That’s how it's supposed to work.

And the market is already responding. The White House announced tens of billions of dollars of planned investments into new gas power plants in Pennsylvania and Ohio. Nuclear plants are being life-extended and expanded. New solar and storage projects are breaking ground. Private capital is flowing in because the price signals are clear: more supply is needed, and there is money to be made by providing it. That is the system working exactly as designed. There are entire cities worth of new power in PJM’s queue that isn’t getting off the ground – not because of the lack of a price cap, but because permitting takes too long in this country.

Pennsylvania manufacturers need real energy – reliable, efficient, affordable, and local. Competitive power markets, with all their imperfections and occasional price spikes, have delivered more of that than any alternative on offer. The spikes we're seeing now are a signal to build more generation, not an invitation to abandon the model that got us here.

The people who want to continue tinkering with market economics are not proposing a real solution to high electricity prices. A true abundance agenda that increases supply won’t come about from government mandates. As Senate Republican Leader Joe Pittman has reminded us time and again, “affordability and availability come hand-in-hand.”

Pennsylvania didn’t become an energy powerhouse by accident. Let’s not throw it away on purpose.

David N. Taylor is President & CEO of the Pennsylvania Manufacturers' Association.