America’s electricity debate is drifting toward a dangerous simplification: that if prices rise or investment lags, the culprit must be “the market,” and the cure must be a return to monopoly-style control. Big public utilities want back in the generation game in this new world of AI-fueled load growth, but theirs is a lumbering model that can’t move fast enough to meet the need.
Calvin Butler, CEO of the Exelon empire of utility companies, alleged recently that Independent Power Producers (IPPs) are guilty of intentionally under-investing in new projects so as to “capitalize off the market scarcity.” It’s a big allegation with little real evidence to support it. This utility’s attempt to brand IPPs as enabling “cartel behavior” collapses under the most basic scrutiny. A cartel requires coordinated output restriction or price-setting among suppliers, sustained by the ability to punish defectors and exclude entrants.
The market structure in deregulated markets like PJM, ERCOT, and others are the polar opposite. IPPs like Vistra, Calpine, NRG, and Constellation are not some monolith – they are in fact fierce competitors. They bid into energy, capacity, and ancillary service markets that explicitly pit one generator against another in real time. Prices are set through market-clearing mechanisms overseen by regulators, market monitors, and a dense web of compliance rules. PJM’s capacity market is intentionally designed as a three-year-forward procurement mechanism, whose goal is to ensure resources are available to meet forecasted demand and to create longer-term price signals for investment.
If this is a cartel, it is the ricketiest one ever devised—one in which participants are compelled to undercut one another daily in order to survive.
PJM, for all its imperfections, remains one of the clearest examples that competitive power markets can procure reliability services transparently, attract capital when rules are stable, and police bad behavior through oversight rather than political muscle. The notion that its shortcomings justify discarding a competitive framework in favor of a more centralized or monopolistic approach is misguided. In fact, history tells us the opposite.
Monopoly utility structures—where generation is rate-based and investment risks are borne by captive customers—have consistently led to overbuilding, gold-plating, and a lack of cost discipline. Consumers ultimately pay the price for those inefficiencies.
PJM’s structure is far from perfect, but it was built to inject market discipline into a sector long dominated by regulated monopolies. Its competitive model has delivered significant benefits over time: lower wholesale prices, improved operational efficiency, and a diverse mix of generation resources. These outcomes didn’t happen by accident and are the result of a system designed to reward performance and penalize inefficiency.
Critics often point to price volatility or occasional reliability concerns as evidence of systemic failure. Volatility is inconvenient, but it is not dysfunction. Price signals are how markets communicate scarcity and incentivize investment. Suppressing those signals in the name of stability risks creating far greater problems down the line, including underinvestment and reliability shortfalls.
The “cartel” argument also ignores the role of independent market monitoring within PJM. The market monitor exists specifically to detect and deter anti-competitive behavior. Bidding patterns are analyzed, anomalies are flagged, and enforcement actions can be taken when necessary. This level of oversight is far more robust than what exists in traditional monopoly utility environments, where investment decisions are often opaque and subject to political influence.
The real threat to PJM’s continued success is not market design, but special interest politics. Increasingly, state and federal policies are layering mandates, subsidies, and out-of-market interventions onto what was intended to be a neutral competitive platform. These distortions result in perverse incentives, undermine investor confidence, and create the very inefficiencies critics then cite as evidence of failure.
The path forward should not be to abandon competition, but to restore and refine it. That means predictable, stable market rules, faster interconnection, and letting competition do what it does best: reveal scarcity, reward performance, and punish inefficiency.
PJM remains one of the most sophisticated electricity markets in the world, and it has a track record of delivering value to consumers. Dismantling it in favor of a more centralized model does not solve how we meet rising power demand.
In energy, as in most sectors, competition is not the problem. It is the solution.
David Bossie is the president of Citizens United and served as a senior adviser to the Trump-Pence 2020 campaign. In 2016, Bossie served as deputy campaign manager for Donald J. Trump for President and deputy executive director for the Trump-Pence Transition Team.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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