The nation’s largest electric grid operator has a revamped review process to speed up the addition of new generation capacity that will not only help meet an expected 30GW data center-driven increase in its service area by 2030, but also quell growing criticism over its handling of the wholesale electricity market in its large and diverse region.
Responsible for overseeing the grid that serves all or part of 13 states and Washington, DC, PJM Interconnection LLC announced April 29 ahead of an annual meeting that its reopened queue of proposed new interconnections includes applications from 811 projects totaling 220 GW.
Most of the proposed projects are for traditional sources such as coal, methane, natural gas, nuclear and hydro, with battery storage and renewables also in the mix. PJM was founded in 1927 as an energy group of three utilities serving Pennsylvania and New Jersey, with two Maryland utilities added three decades later. It became a full regional transmission operator (RTO) in 2002, responsible for planning and managing the regional energy market. According to PJM’s 2026 Long-Term Load Forecast, peak summer demand will increase from 160 GW in 2025 to 253 GW in 2046, a 58% increase driven primarily by data centers.
In its April 29 announcement, PJM noted 349 stand-alone storage projects and 157 natural gas plants in its accepted mix, with 142 solar projects, 65 wind, 45 solar hybrids with storage, 27 nuclear units, 15 sources considered “other” and 11 hydro projects. By capacity, there is 105.8 GW of gas power, 66.5 GW of storage, about 150 MW of hydro, 17.9 GW of nuclear and 500 MW of “other,” which PJM says includes biomass, coal, methane and, for the first time, nuclear fusion. Massachusett developer Commonwealth Fusion Systems recently sought grid inclusion for its planned 400 MW Fall Line fusion power plant in Chesterfield County, Virginia.
four-The annual review gives results
The announcement follows PJM’s four-year pause in accepting new interconnection applications while it cleared its existing backlog and worked with federal regulators to reform the time-consuming first-come, first-served evaluation process. For the new cycle, PJM will use what it calls a “first-in, first-out approach,” prioritizing projects that are more advanced and ready to move forward.
“Projects must demonstrate viability before entering the queue, including significant initial financial commitments and proof of site control,” according to a company statement. “These requirements are designed to reduce speculative projects, improve predictability and increase the overall pace of interconnection.”
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PJM anticipates that the process to evaluate and approve projects will take less than two years; officials say the ambitious schedule will be achieved by using tools from Google’s AI research lab, including an automated document review and interconnection intelligence platform developed by its software spin-off company Tapestry.
In a social media post, Tapestry CEO Page Crahan said the system will eliminate assessment bottlenecks that Lawrence Berkeley National Laboratory estimated by 2023 created a potential backlog of 2,600 GW. Tapestry will now use separate project databases, models and other assessment tools to encourage better collaboration between network planners and project developers.
“By automating and improving the data verification process for things like land rights, equipment and grid impacts, we aim to reduce the burden on PJM’s energy developers and planners,” Crahan said. PJM adds that AI could help add more flexibility to a feasibility assessment process more suited to large-scale conventional coal and oil generation facilities, rather than smaller-scale variable sources such as wind, solar and battery storage.
Who pays the bill?
But those same AI technologies require more data centers in more PJM service areas, jeopardizing a long-standing balance of supply and demand in the wholesale energy market that has translated into higher electricity prices.
A report by the Maryland Office of the People’s Advocate found that increasing capacity prices across PJM’s footprint will cost electric customers $14.7 billion in annual added costs, seven times more than the $2.2 billion in capacity costs in the 2024-25 delivery year.
While the Maryland Legislature recently enacted policy changes aimed at spurring renewable energy generation and providing some relief to ratepayers, Gov. Wes Moore (D) told attendees at PJM’s May 11 meeting that the grid operator lacks a clear plan to address broader problems in the wholesale energy market.
“Reliability without affordability is not reliability; it’s just a transfer payment,” he said. “Affordability without reliability … is just one way to make taxpayer pain permanent and erode trust in this system.” Another criticism leveled at PJM has been its slow pace to add less expensive sources of clean power generation to the grid, a move advocates say could help curb price increases.
In a May 11 statement, the operator responded that it has processed “thousands of megawatts of renewable projects” and that factors beyond its control — permitting and location hurdles, financing and supply chain backlogs — have delayed or sidelined many projects.
Federal Energy Regulatory Commission Chairwoman Laura Swett, a Trump administration appointee in 2025, expressed concern at the meeting that the grid operator may be too large now to operate effectively to meet data center power demand, with more than 1,000 utility members and an “unacceptable” governance structure. The states of PJM and the District of Columbia have it “Fundamentally different regulatory structures, resource portfolios and policies,” Swett said, saying confidence in his decision-making has been “completely eroded.”
In its most recent capacity auction, held in December, PJM failed to acquire enough capacity to meet its reserve margin target, prompting FERC’s notices. PJM added 2.8 GW of capacity in 2025 and 4.8 GW in 2024, a January staff presentation said. As of Jan. 8, 2 GW were under construction and an additional 3.2 GW were under construction and partly in service, PJM staff said.
FERC “Fix-It” conference scheduled for July 23
Swett said FERC will hold a conference call on July 23 to identify flaws in PJM’s governance process and solutions to address them. “It’s going to be a record-setting work session looking toward actionable change,” he said, with attendees including PJM board members and invited CEOs, investors, state regulators, consumer advocates and transmission experts from other RTOs “to offer honest, concrete proposals for reform,” Swett said. “This will not be another airing of grievances.”
PJM “appreciates” Swett’s interest in the grid operator’s stakeholder process, spokesman Jeffrey Shields said. “We look forward to participating in the next technical conference and continuing our work to strengthen the reliability of the network [and] … get the next generation online as soon as possible,” Shields said in a media response.
The PJM Power Providers Group, which represents independent power producers, also appreciates Swett’s comments, said Glen Thomas, its president. The group “does not believe PJM’s stakeholder process is fundamentally broken; however, there is certainly always room for improvement,” he told industry publication Utility Dive.
On a larger scale, PJM is exploring further changes in how it manages the wholesale electricity market in light of growing data center demand and other challenges. A report issued by the company outlines three general frameworks for developing permanent solutions. “The choices embedded in these paths involve genuine trade-offs,” the report states, “and these … uniquely affect different stakeholders.”
PJM says the framework proposals are intended to start conversations with stakeholders about the best approach to rectify a situation that the network operator’s president and CEO, David Mills, calls “unsustainable” and demands a quick and well-thought-out solution.
“This is a generational challenge that no one organization, state or industry can solve alone,” Shields said after the Maryland governor’s speech. “Coordination will be needed between policymakers, grid operators, utilities, generators and large energy users to help evolve the grid at the speed and scale that this moment demands,” he said.
The changes may not come soon enough for large utilities like Columbus, Ohio-based American Electric Power Co. During its first-quarter earnings call in early May, Chairman, President and CEO Bill Fehrman told investors that concerns about PJM’s ability to speed up a solution to the many challenges in the electricity market could force his company to end its membership in the grid.
“If something isn’t done now, I expect we could still be having these same conversations 10 years from now,” Fehrman said. “The PJM market did very well when supply exceeded demand; we’re in a very different time now.”
