The recent Utility Dive op-ed on electricity rate increases correctly observes that the story behind rising power bills is more complicated than a single culprit like data centers. Regional differences matter. Policy choices matter. Market structures matter.

But the conclusion it gestures toward — that moving away from organized markets toward vertically integrated utility models is the solution — misdiagnoses the problem and risks reversing decades of progress in delivering reliable, affordable power through competition.

As someone who has spent a career working at the intersection of markets and regulation, including service on the Pennsylvania Public Utility Commission and the Federal Energy Regulatory Commission, I have seen firsthand what competitive wholesale electricity markets can achieve when they are allowed to function properly.

Competitive power markets — like those operated by PJM Interconnection — were not created by accident. They were designed to replace monopoly decision-making with transparent price signals, open access and innovation. Those markets have delivered.

Over the past two decades, competition has driven billions of dollars of private investment in new and more advanced generation resources, reduced the financial risk borne by ratepayers and created a system where the most efficient resources set prices.

In competitive markets, price increases are signals — often reflecting supply constraints, fuel costs or policy distortions — not the result of guaranteed profit rate returns on utility-owned assets like in the past.

The answer is not to abandon markets, but to fix the constraints that are preventing them from working efficiently.

The real issue is increasing supply, not the structure of the competitive market

The Utility Dive piece highlights rising capacity prices in PJM and attributes them in part to the mechanics of marginal pricing. But that framing overlooks the more fundamental driver: a growing imbalance between supply and demand following years of flawed wholesale market price signals. Demand is rising — driven by electrification, economic growth, and yes, data centers. At the same time, generation is retiring faster than replacement resources are being built, and interconnection queues are clogged.

In any market, electricity included, tight supply leads to higher prices. That is not a failure of competition; it is a signal that more investment is needed.

The irony is that competitive markets are uniquely well-suited to respond to that signal. They attract private capital, allocate risk efficiently and incentivize innovation in ways that regulated monopoly utility models simply do not. 

A tale of two outcomes

Consider the contrast between Pennsylvania and Virginia. Pennsylvania, a true leader in competitive energy policy, has long benefited from a diverse power generation fleet and robust price signals that encouraged investment. The result has been a persistent surplus of power — enough not only to meet in-state demand but to export electricity across the region. Every year, Pennsylvania generates 40% more electricity than it consumes.

Virginia, where I am a current ratepaying resident, operates under a vertically integrated model and has become the largest importer of electricity in the United States. That is not because Virginians consume more power per se, but because the state has not built sufficient generation to keep pace with demand — particularly from data centers.

This divergence is instructive. Competitive markets like PJM did not create scarcity in Virginia; they revealed it. And in Pennsylvania, those same markets built a surplus that regulators would have never allowed under traditional regulatory models.

The solution moving forward isn’t to abandon markets — policymakers should work to improve them. It is tempting, in the face of rising prices, to retreat to familiar models of centralized planning and monopoly utility-owned generation. But that approach shifts financial risk back onto consumers and reduces the transparency that competitive markets provide. Under such an approach, consumers will most certainly pay more and, if Virginia is instructive, not have enough power to meet demand.

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Instead, policymakers should focus on: Accelerating interconnection and permitting to bring new supply online faster; ensuring resource adequacy mechanisms reflect real system needs; removing policy barriers that distort price signals; designing tariffs that properly allocate costs to large new loads; and ending this shameless, self-serving debate about utility re-regulation.

These are solvable problems. And they are best solved within a competitive framework.

The bottom line is that electricity markets are not perfect, but they remain one of the most powerful tools we have for delivering reliable affordable power at scale.

The lesson from Pennsylvania’s surplus and Virginia’s dependence on electricity imports is not that markets have failed. It is that where competition is allowed to work — supported by sound policy and timely investment — it delivers. We should not abandon that model. We should make it work better.