Pennsylvania is drowning in energy but starved for power: It’s time to let utilities build again -- Opinion
By Susan Shanaman
When I had the honor of serving as the first woman to chair the Pennsylvania Public Utility Commission (PUC) in the 1980s, our mission was clear: strike an equitable balance between consumer pocketbooks and infrastructure stability. We oversaw a heavily regulated system, but it worked because it guaranteed a fundamental truth—if Pennsylvania’s population and economy grew, our capacity to keep the lights on grew with it.
Today, Pennsylvanians look at their monthly electric bills with justifiable anger. Prices are climbing, and the burden on families and businesses is becoming unsustainable. But as a former regulator, I must inject a dose of reality into this conversation: the blame is being directed at the wrong targets, and the political “solutions” coming out of Harrisburg will only make the problem worse.
First, let’s be clear about who is not responsible for the baseline surge in your electric bill: your local electric distribution company.
Under Pennsylvania’s 1996 electricity deregulation law, your local utility company was legally forced out of the power generation business. It does not own the power plants and does not set the price of the energy traveling through its wires. It simply maintains the poles and wires and is legally mandated to buy the electricity you use at regional auctions conducted by PJM Interconnection, the grid operator. If the auction price is high, that cost is passed directly through to you without a single penny of markup for the utility.
The real crisis is a simple supply-and-demand problem. Pennsylvania sits on one of the largest natural gas reserves in the world. We are an energy-exporting powerhouse. Yet our electric bills are soaring because we aren’t building enough power plants inside our own borders to keep up with skyrocketing demand from data centers and manufacturing.
Deregulation was sold to Pennsylvanians on the promise that independent power producers would compete and lower costs. For a while, during times of lower demand, it appeared to work. But the flaws in that market model have been exposed.
Independent power producers build plants only when Wall Street guarantees a short-term profit. They have no statutory obligation to ensure long-term statewide reliability.
Defenders of deregulation argue that keeping utilities out of the power generation business protects ratepayers from the financial risk of building multi-billion-dollar power plants. But history tells a different story. Prior to deregulation, every major power plant in this Commonwealth was built by regulated utilities under the watchful, strict oversight of the PUC.
Ratepayers weren’t exploited; they were protected by a predictable system that guaranteed reliable capacity.
Thirty-two states still allow their utilities to build and generate power. With today’s electricity demand higher than it has ever been, it is time to allow Pennsylvania’s regulated utilities to produce power once again.
Instead of addressing this structural supply shortage, the current administration in Harrisburg has chosen a path of political theater.
Gov. Josh Shapiro recently announced a new “Special Counsel for Energy Affordability” within his executive Office of General Counsel. This role is explicitly billed as a political watchdog meant to fight utility rate increases.
This sounds remarkably like a role that already exists: the Pennsylvania Office of Consumer Advocate (OCA). When the General Assembly created the OCA decades ago, lawmakers specifically placed that office under the jurisdiction of the independent attorney general—not the governor—to keep politics entirely out of the consumer advocacy process. As a former attorney general himself, one would think Gov. Shapiro would respect that constitutional and statutory separation.
By inserting a hand-picked utility “watchdog” into the executive branch, the Governor isn’t protecting consumers; he is politicizing the regulatory process.
The PUC is a quasi-judicial, independent body. When a utility requests a rate increase to update aging infrastructure, it triggers a laborious, evidence-based legal process. Every dollar is scrutinized through formal testimony, cross-examinations, and forensic audits. It is a mathematical and legal determination, not a political referendum.
With his recent public letters to utility CEOs and executive appointments, Gov. Shapiro appears not only to want to dictate the terms of the Consumer Advocate but also to override the independent function of the PUC.
Grandstanding and creating redundant executive-branch watchdogs will not build a single megawatt of new power. They will not address the issue of data centers. They will not lay a single mile of transmission line. They will only inject uncertainty into Pennsylvania’s energy market, discouraging investment at the precise moment we need it most.
If we want to lower electric bills in Pennsylvania, we need to stop playing politics with regulators and start building power plants. It’s time to look back at the structural stability that served us for decades, stop treating our utilities like adversaries, and let them build the generation capacity Pennsylvania desperately needs.
Susan M. Shanaman, an attorney, served as the chair _ of the Pennsylvania Public Utility Commission from 1979 to 1983._
