The Citizens’ Voice first published this opinion piece.

Nearly two-thirds of Pennsylvanians agree: Energy is unaffordable. Pennsylvania’s average residential electricity price was 11 percent higher this July than a year earlier, and it has risen by 45 percent since 2018 — more than in Ohio, Virginia, or the rest of the states on the PJM grid.

But what’s causing this spike in electricity prices? Basic supply-and-demand economics explains.

Pennsylvania businesses and households are paying for an energy gap. Their electricity bills are rising because the regional grid run by PJM cannot add supply fast enough to keep pace with surging demand, led by data centers. In its most recent capacity auction, PJM fell 6,831 megawatts short of its reliability requirement for the 2028–2029 delivery year — the rough equivalent of seven gas-fired power plants.

Every household pays for that shortfall: Capacity prices have risen more than tenfold and hit the price cap Gov. Josh Shapiro negotiated with PJM. Capacity went from 6.5 percent of the wholesale cost of power (what suppliers pay for energy, capacity, and transmission before local delivery and taxes) in 2024 to nearly 16 percent in 2025, according to PJM’s market monitor.

PJM’s rules make it worse. New power plants wait years to connect, leaving the region short of dispatchable supply, and new data centers don’t face the full cost their demand adds to capacity prices.

Pennsylvanians largely agree on who should pay. Nearly 80 percent support making data centers cover their grid upgrades while letting them supply their own power.

But who pays is only half the problem. The other half is whether enough reliable power can be built, even with strong demand.

Ohio’s recent energy reform shows how Harrisburg can help close that gap.

First, Ohio set a 150-day clock on state approval of a new power plant application, with shorter timelines for projects that meet specified land-control or location requirements. If it fails to respond in time, the state automatically approves the application. Ohio’s reforms do not ignore stewardship, as developers must still obtain required environmental permits and comply with applicable pollution standards.

Second, Ohio made it easier for large customers to build or contract for behind-the-meter power generation — namely, electricity that never passes through public utility wires — on their own sites, without waiting for grid service. The state has already approved eight behind-the-meter projects that will add nearly 2,200 megawatts of capacity, with another four more pending that will combine to produce 3,080 megawatts.

Avoiding that grid connection process can save years of regulatory studies and mandatory upgrades. A 200-megawatt plant serving Meta’s data center campus went from application to operation in about 17 months, without being held up in PJM’s interconnection queue. Nationally, the median time for a 2025 project to go from interconnection request to operation exceeded five years.

Data centers that build their own power plants add supply alongside their demand, rather than competing with households and other local businesses for scarce grid capacity. When a data center supplies its own power, ratepayers don’t pay for new power lines or capacity bought to serve someone else’s uncertain demand. Additionally, fewer neighbors lose land to eminent domain for new or upgraded wires.

Shapiro’s August executive order starts with a sound principle (i.e., data centers should pay their own way), then layers purchase mandates and discretionary permits on top. Data centers that don’t sign and comply with his consent order, even those supplying their own power, lose their permit deadlines.

Pennsylvania should borrow Ohio’s playbook and begin comprehensive permitting reform to establish clear rules over political discretion. Permit deadlines should be enforceable in statute, with automatic approval when regulators miss them. Locally, a power plant or data center that meets clear standards protecting its neighbors and their property, such as limits on noise and light at the property line, should be approved by right. Townships, municipalities, and counties should still set standards, but they should respect private property rights and not impose onerous bans. State lawmakers should also strengthen the legal pathways for large customers to supply their own power or buy it from a neighboring plant.

Ohio changed its rules, and new power plants and billions of dollars in private investment followed. Pennsylvania sits atop one of the world’s largest natural gas fields and could build far more than it does. The right rules would let it.

Aswin Prabhakar is an economic research analyst at The Buckeye Institute, and Joshua Schubert is a policy analyst at the Commonwealth Foundation.