Is the competitive power market model broken? Why changing the rules around generation could be an answer to rising electricity prices.

U.S. electricity markets, particularly the PJM region, face a critical affordability and reliability crisis fueled by surging load growth from AI and data center expansion. Demand is outpacing supply at an unprecedented rate, yet current capacity auctions fail to provide the long-term price signals necessary to incentivize new generation. Carim Khouzami, Executive Vice President at Exelon, argues that the current market structure is insufficient, as it relies on competitive markets that have not delivered new capacity. To address this, utilities should be permitted to own generation again, serving as a competitive benchmark to drive down costs and ensure grid stability. Implementing transmission security agreements for large-scale data center developers further protects ratepayers by shifting infrastructure costs away from the public, ensuring that only viable projects proceed while maintaining the grid's integrity.