Maryland's Energy Crisis: How Policies and PJM Grid Issues Drive Rising Costs

Maryland’s Energy Crisis Takes Center Stage in Baltimore

PJM Interconnection, the largest electricity grid operator in the U.S., held its annual meeting in Baltimore this week. Maryland Democratic Gov. Wes Moore used the event to criticize rising energy costs, stating,

"I am here to say plainly that PJM can—and must—do more for ratepayers." Moore added that PJM's system "isn't working."

Electricity Prices Soar in Maryland

Residential electricity in Maryland now costs 22.4 cents per kilowatt-hour, a 24% increase over the national average and 6.4% higher than last year. Nationwide, residential electricity prices rose 7.4% from February 2025 to February 2026, according to federal data.

Root Causes of Rising Energy Costs

While data centers are often blamed for wholesale price hikes, multiple factors contribute to the crisis:

• Aging grid infrastructure requiring upgrades
• Fluctuating natural gas prices
• Supply chain constraints
• Demand outpacing supply

Jeffrey Shields, PJM’s senior manager of external communications, countered criticism by stating the operator is "working with relentless focus to accelerate the connection of new generation."

PJM’s Interconnection Reforms Show Progress

Facing a backlog of energy projects, PJM revamped its interconnection process in 2022, shifting from a first-come, first-served model to a "cluster" approach. This reform resulted in 811 new generation projects in its first cycle this year, addressing past inefficiencies.

Maryland’s Policies May Worsen the Crisis

Despite blaming PJM, Gov. Moore has supported policies that distort the market and increase costs, including:

• The Utility RELIEF Act, which promises to save residents "at least $150 annually" through $100 million in refunds or credits funded by the Strategic Energy Investment Fund (SEIF).
• The DECADE Act, designed to attract businesses with tax credits and carve-outs, despite Maryland’s 3% tech tax signed by Moore in May 2024.

Josh Smith, a senior fellow at the Pacific Legal Foundation, warned that such policies "tend to make things more expensive," discouraging suppliers from serving the market.

SEIF Funding Surges Under Moore’s Administration

The SEIF, funded by "alternative compliance payments" from utilities, saw payments grow from $77 million in FY 2022 to $365 million by FY 2025, according to the Maryland Energy Administration.

Conclusion: Who’s Really Responsible?

While PJM faces scrutiny for grid inefficiencies, Maryland’s own policies—including price caps and clean energy mandates—may be key drivers of the state’s energy crisis. The long-term impact of these reforms remains uncertain as residents grapple with rising costs.