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PJM Interconnection
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PJM Interconnection

US grid operator; 2027/28 capacity auction cleared 6,623 MW short of its reserve target.

PJM Interconnection, the largest US grid operator, opened a backstop capacity auction on 31 July at a $555/MW-day cap to close a 6,831 MW shortfall against its 2028/29 reliability requirement.

Last refreshed: 4 August 2026 · Appears in 1 active topic

Key Question

PJM's capacity auction fell short years ahead of delivery - is the grid already overcommitted?

Timeline for PJM Interconnection

#13 3 Aug

Filed a curtailment rule for 50 MW-plus loads at FERC under docket ER26-3380-000

Data Centres: Boom and Backlash: PJM wants 50 MW loads curtailable
#12 31 Jul

PJM's backstop auction opens at $555

Data Centres: Boom and Backlash
#11 21 Jul

Fell 6,623 MW short in its 2027/28 capacity auction, setting a 21 July procurement deadline

Data Centres: Boom and Backlash: PJM auction falls 6,623 MW short
#10 19 Jul

FERC sets a 20 July adequacy deadline

Data Centres: Boom and Backlash
#11 15 Jul

Mentioned in: MISO's second grid emergency in July

Data Centres: Boom and Backlash
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Background

PJM Interconnection is the largest regional transmission organisation in the United States, coordinating electricity transmission across a 14-state region plus Washington DC, including Northern Virginia, the world's largest data-centre market. Founded in 1927 as the Pennsylvania-New Jersey Interconnection and designated an RTO by FERC in 2001, it now manages roughly 182 GW of generating capacity over 88,333 miles of transmission line.

Data-centre demand has driven roughly 5% annual load growth across PJM's territory since 2024, straining a grid built for slower growth. The Department of Energy has invoked emergency Section 202(c) authority three times in 2026 to force large PJM-area data centres onto backup generation during heat emergencies, the first such curtailment of data-centre load in RTO history.

That pressure has pushed PJM into the centre of a federal reckoning over who pays for grid expansion driven by co-located computing load, with FERC's RM26-4-000 rulemaking treating PJM's tariff filings as the template other US grid operators will be measured against.

Key Issues
Capacity shortfall

PJM opens a backstop capacity auction

PJM's 2027/28 capacity auction cleared 6,623 MW short of its reliability requirement, so on 31 July it filed with FERC for a one-time backstop auction running 30 September to 21 October at a $555/MW-day price cap, well above the $325 base cap. The backstop targets a 6,831 MW gap against the 2028/29 delivery year, a shortfall Utility Dive separately estimated could cost up to $20bn through 2027.

The shortfall sits inside a wider federal process: FERC's RM26-4-000 docket required PJM and five peer grid operators to file generation-adequacy reports by 20 July, and PJM's own show-cause response on large-load tariffs is due 17 August. PJM's board separately warned 13 governors in May that reinforcement costs could land on household bills unless states set cost-allocation rules first.

Common Questions

PJM opens a backstop capacity auction

Why did PJM's 2027/28 capacity auction fall short?
PJM's 2027/28 Base Residual Auction cleared 134,479 MW at the $333.44/MW-day price cap, a record clearing price, but still finished 6,623 MW below PJM's reliability requirement. The board mandated a supplemental procurement mechanism ahead of a 21 July Deadline, with an Incremental Auction set for February 2027 to close any remaining gap.Source: PJM / RTO Insider
What is the FERC show-cause order served on PJM in June 2026?
On 18 June 2026, FERC issued Section 206 show-cause orders to PJM and five other US grid operators, requiring them to justify their large-load interconnection tariffs or propose reforms across five categories, including co-located data-centre load. Responses are due 17 August 2026.Source: FERC
How much new generating capacity has been added to the US grid to handle data-centre growth?
FERC reported a 75 GW increase in US summer generating capacity since 2025, with Texas grid operator ERCOT adding approximately 26 GW alone. Despite this, PJM still triggered emergency curtailment protocols in May 2026, showing that demand growth is outpacing even record supply additions.Source: Lowdown data-centres update 4
Why has PJM's capacity auction cost risen eightfold?
Data-centre-driven demand growth of approximately 5% annually has outrun new generation additions. PJM's most recent forward capacity auction resulted in the first-ever shortfall in the RTO's history — it could not procure 100% of required capacity — and auction clearing prices rose approximately eightfold year-on-year.Source: Lowdown data-centres update 4
Did PJM actually switch off data centres in 2026?
Yes. The US Department of Energy issued a Section 202(c) order on 18 May 2026 granting PJM authority to curtail data centres with behind-the-meter backup generation during a heat emergency. PJM recorded a peak-load forecast of 135,961 MW with more than 40 GW of plant offline for maintenance.Source: Lowdown data-centres update 4
What is PJM Interconnection and why is it important for data centres?
PJM Interconnection is the largest US regional transmission organisation, covering 14 states plus DC including Northern Virginia — the world's largest data-centre market. It manages 182 GW of generating capacity and is the grid operator directly responsible for executing the first-ever Section 202(c) data-centre curtailment order in May 2026.Source: Lowdown data-centres update 4
Why is PJM's electricity grid struggling with data-centre demand?
PJM's region includes Northern Virginia, the world's largest data-centre cluster, and faces 5% annual demand growth from hyperscalers — a reversal after 15 years of flat load from 2005 to 2020. The grid was not built for this growth rate: transformer lead times are five years and interconnection queues run to hundreds of gigawatts.Source: Wikipedia / Lowdown data-centres

Reference

What states are in the PJM grid region?
PJM covers all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Washington DC — the core of the US Eastern Interconnection between the Midwest and Atlantic coast.Source: Wikipedia
What happens if PJM's capacity shortfall is not resolved before 2027/28?
PJM's board has mandated an accelerated procurement mechanism to fill the 6,623 MW gap, with parameters on resource type, price, and cost allocation still under development, and a February 2027 Incremental Auction as backstop if the supplemental process does not close it in time.Source: PJM
How many times has the DOE ordered PJM to curtail data centres in 2026?
Three times. Energy Secretary Chris Wright signed a Section 202(c) order on 18 May 2026 and two more on 30 June, each forcing customers drawing 50 MW or more onto onsite backup generation within 15 minutes of an emergency signal, primarily targeting AI data centres during summer heatwaves.Source: DOE / New Jersey Monitor
Source Material
PJM Interconnection