New Report: Utility-Generated Power Can Save Customers $20B, Reduce Risks of Outages
Communities
Customers are feeling the impact of rising electricity costs. Demand for electricity is increasing rapidly and new generation is not getting built. The result is a system under strain, with high prices and elevated risk of outages.
A new analysis by Charles River Associates (CRA) shows that allowing utilities in PJM to produce energy – also known as utility generated power – could create significant customer savings and better ensure the lights stay on. PJM is the organization that coordinates the flow of electricity across 13 states that include Delaware, Illinois, Maryland, New Jersey, Pennsylvania and Washington D.C.
Utility-generated power can meaningfully reduce customer costs while making the grid more reliable. Benefits include:
- Up to $20B in customer savings
Letting utilities generate more of the power we need could save PJM customers between $9.6 billion and $20 billion in a single year. These savings come mainly from adding more electricity supply to the system, which helps lower overall energy prices.
- 85% reduction in overall load shedding risk caused by supply shortages
As electricity demand grows, having more utility‑generated power available would greatly reduce the chances of outages caused by not having enough supply. The analysis shows an 85% drop in expected energy shortfalls – meaning fewer outages, and shorter ones, especially during extreme heat or cold periods.
- More stable and predictable bills
Because utilities plan and build generation years ahead, with public oversight, customers benefit from more stable prices. This upfront planning helps minimize sudden spikes in energy bills when the market gets tight.
- Built-in customer protections
Utility-generated power is closely regulated, with limits on returns and full transparency for state regulators. This ensures investments are focused on long-term customer benefits, not short-term profits. Generated power is closely regulated, with limits on returns and full transparency for state regulators. This ensures investments are focused on long-term customer benefits, not short-term profits.
The Bottom Line
As electricity demand continues to rise, states in PJM face a clear choice: rely solely on the market that has led to high customer bills and tightening supply that puts reliability at risk or support expanded use of utility-generated power to bring more certainty, control, and customer benefits to electricity supply.
Read the full Charles River Associates (CRA) report.
Read Exelon’s press release on the CRA findings.