It’s been nearly a year since capacity market prices in the mid-Atlantic spiked, reaching the price cap and putting the region at the center of a national debate over whether energy markets are prepared for the AI era.
Grid operator PJM is juggling a veritable storm of change this summer, driven by demand that the RTO itself acknowledges requires a much faster response than its current frameworks allow for. PJM expects peak summer electricity demand to increase by 3.6% annually over the next decade, fueled in part by the massive growth in data center interconnection requests.
In response, PJM is reworking the generation interconnection queue, undergoing a stakeholder process to get large loads online more quickly, grappling with the question of whether data centers can be relied on for load flexibility, and scrambling to organize an “emergency backstop procurement”, designed to facilitate bilateral deals between new generation and power hungry data centers.
But simmering in the background, fueled by a comment from Trump-appointed FERC chair Laura Swett, is a more foundational question: Is the region just too big to be effective?
PJM’s status quo process for grid modernization is “unacceptable and has been for some time,” Swett said at the grid operator’s annual meeting last month. If the RTO’s “huge and diverse footprint” is preventing it from operating an efficient market amid “shifting fuel mixes and rapid technological change,” she added, “perhaps it has simply grown too big to function.”
