(The Center Square) – Power grid planners continue to grapple with how to integrate new data centers onto the grid while keeping prices low and service reliable for 67 million people in PJM Interconnection’s footprint.
Steps are being taken, but experts warn that supply chain bottlenecks could prevent new generation sources from coming online in time to meet capacity needs – creating a mismatch between what clears in the market and what can actually be built on schedule.
After a months-long process, the power grid’s board announced its decision on how it move forward.
“This is not a yes/no to data centers,” said David Mills, PJM board chair and interim president and CEO. “This is ‘How can we do this while keeping the lights on and recognizing the impact on consumers at the same time?’ We look forward to implementing, along with our stakeholders, these proposals to manage the phenomenal demand growth we are experiencing.”
The board said some measures are transitional during what it called a “dynamic” period for the industry: better power load forecasting, faster construction and repurposed plants to help data centers plug in sooner.
The urgency comes amid a shortage in the grid’s power reserves in the coming years – the first shortfall of its kind, according to PJM. Officials are also considering capping prices for power producers.
Jon Gordon, policy director for Advanced Energy United, told The Center Square that power generators generally oppose price caps because they benefit from higher prices.
He also pointed to a joint statement from the White House, via the Department of Energy, and governors from PJM states – issued shortly before the board’s decision – urging PJM to consider extending the cap for another two years.
Gordon said PJM views high prices as an investment signal, but he argued that signal is blunted by long equipment wait times – such as five to seven year waist for gas turbines – meaning customers could pay more well before the system can respond with new supply. He added that PJM’s three-year-forward market timeline was built for an era when new plants could be developed faster and may now need to be realigned with today’s construction realities.
He admits PJM could not have foreseen the magnitude of data center growth but was critical of what he says is their failure to prepare for a fuller clean energy buildout.
Data center load arrived at “the worst possible time,” he said. PJM and the broader industry were lulled into complacency after a generation overbuild in the 2000s that led to years of low prices and flat demand.
As demand slowly rose, the aging fleet of natural gas plants began needing expensive maintenance, and many retired over the last five years – so supply tightened just as a wave of data center load arrived.
Gordon said PJM plans to develop formal proposals to submit to the Federal Energy Regulatory Commission, or FERC, including “expedited interconnection” paths intended to bring new power plants online faster. But he’s skeptical that speeding up paperwork will matter much when global supply chain constraints are already delaying construction.
It’s complicated designing a marketplace that ensures consumers aren’t burdened with data center costs, he said, still, he believes everyone involved is working toward that goal.
“PJM is establishing clear, transparent guardrails for integrating large new loads under defined conditions,” said Stu Bresler, PJM Chief Operating Officer. “This proposed course of action will require intense work by all of us in 2026 and involve significant changes, but it’s clear that bold action will be required to support the positive growth that is happening throughout the PJM region and the nation.”
