PJM Interconnection outlines three market reforms to tackle power supply and pricing strains
Updated
Updated · Maryland Daily Record · May 6
PJM Interconnection outlines three market reforms to tackle power supply and pricing strains
10 articles · Updated · Maryland Daily Record · May 6
The operator for 13 states said shortages could emerge by 2027 after capacity prices jumped more than 1,000% in the past two auctions.
Its proposals would rely more on long-term fixed-rate power contracts, let states cap capacity payments in exchange for lower reliability, or shrink the capacity market.
PJM, serving about one in five Americans and the biggest US data-centre hub, says surging demand and political price caps are delaying investment and raising consumer bill concerns.
Are data centers pushing America's power grid and your wallet to the breaking point?
Who will pay the trillion-dollar price to power the AI boom without crippling the U.S. grid?
Can AI be re-engineered for energy efficiency before its power demand leads to widespread blackouts?
U.S. Data Center Electricity Demand to Triple by 2030: Escalating Grid Risks and Regulatory Responses
Overview
The rapid growth of large data centers, driven by AI and cloud services, is straining the U.S. power grid, exposing vulnerabilities highlighted by a major outage in Virginia in 2024 and prompting a historic NERC Level 3 alert in 2026. Grid infrastructure upgrades have not kept pace with soaring demand, leading to regional challenges and rising electricity rates. In response, states like Virginia and Texas are adopting new regulatory measures, including specialized rate classes and mandates for on-site power generation. While demand response programs offer some relief, operational limits make them only a temporary fix. Meanwhile, supply chain bottlenecks and massive investment needs complicate efforts to expand clean and reliable energy, fueling environmental concerns and community opposition that threaten future data center development.