For years, Americans were told that strict controls on who could own and build power plants would foster competition and lower prices. But in large parts of the mid-Atlantic, including Pennsylvania, New Jersey, and Maryland — PJM; this area also includes other states — the reality has been far different since the 1990s restructuring wave.
Electricity rates in PJM states are rising faster than inflation and faster than in many other parts of the country. Families and small businesses are absorbing the impact of volatile capacity auctions and wholesale price spikes, while being told that this is “how markets work.” American consumers deserve a more honest conversation about the state of market competition and how outdated rules are holding back affordable power prices.
The United States is the global power it is today because of the power of markets and choice, not big government policies and runaway regulations.
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For example, cellphone prices are a small fraction of what they used to be because of a fierce rivalry among manufacturers such as Apple, Google, and Samsung. If any one phone gets too expensive or its features are not keeping pace, competing phones and producers can and do go after their market share by bolstering their own offerings. This is also the case with wireless and broadband markets. A 2025 broadband pricing index found that, over the last 10 years, broadband prices fell by 43% as companies offering those services aggressively competed for market share. While the government doesn’t always stay out of the way in telecom policy, broad-based deregulatory policies have kept prices low and competition alive.
This is unfortunately not the case in electricity markets. PJM Interconnection operates a wholesale electricity market within a government-shaped framework that sets prices through centralized auctions. Independent power producers bid into these markets, and when supply is tight, clearing prices rise. Higher prices are supposed to signal new investment opportunities. But the market cannot function as it normally would because of regulations in PJM states outlawing competition with IPPs.
In these states, traditional utilities were forced decades ago to divest their power plants. They now function primarily as delivery companies, buying electricity in wholesale markets and watching prices rise, with no ability to offer their own power alongside government-shielded market incumbents. The system’s design means that merchant generators can benefit when markets are tight and don’t have to worry about competitors pushing them to innovate or keep prices in check. That is not a free market and most certainly not “deregulation,” as this system is commonly called.
States most exposed to wholesale-only generation — Maryland, Pennsylvania, New Jersey, and others within PJM — are experiencing sharper volatility than much of the country. In contrast, states that permit vertically integrated utility models, particularly in the Southeast and parts of the Midwest, combine long-term planning with regulated oversight. In those states, utilities can build generation when reliability or price stability is at risk, subject to review by the public utility commission. In those states, utilities and independent generators compete to deliver the lowest-cost projects under regulatory scrutiny. Consumers benefit from transparency and planning, not from being exposed to wholesale price swings. That, not the broken PJM status quo, is real competition.
To educate Americans on these issues and advocate for market reforms, the Taxpayers Protection Alliance has created a new educational website: Consumers for Affordable Energy.
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Energy expansion is critical to meet today’s growing demand. Utilities have the experience, trust, and track record to compete with IPPs and build and finance large-scale infrastructure. They should be allowed to vie for consumers’ business in generation markets alongside independent producers, not locked out by outdated regulatory barriers.
Americans have been repeatedly told, without evidence, that large projects such as data centers are to blame for rising electricity prices. The reality is that the current system outlaws competition, and rising prices are the inevitable result. Consumers for Affordable Energy will advocate reforms that restore balance, transparency, and affordability to wholesale electricity markets. Markets work if they are allowed to function.
Ross Marchand is the executive director of the Taxpayers Protection Alliance. His work has appeared in numerous publications, including the Wall Street Journal, Forbes, the Denver Post, and the Washington Examiner.