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Author: Advance Energy Team    Published: 08/22/2025  Advance Energy

Navigating PJM’s landscape is increasingly complex with big stakes, as decisions made at PJM impact state policies, energy reliability, affordability, and energy goals. Interconnection bottlenecks, shifting capacity market dynamics, and ongoing regulatory debates at FERC and PJM all shape the future of state energy markets.

 

To ensure state leaders can remain ahead of these critical issues, Advanced Energy United has launched PJM Insights for State Leaders—a monthly bulletin designed to keep policymakers, regulators, and stakeholders informed on the latest developments in PJM.

Top Story

Conference: Multi-State PJM Technical Conference – Hosted by Coalition of Thirteen Governors
September 22 | Philadelphia, PA

 

The Governors of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia will convene a Multi-State Technical Conference at the National Constitution Center to explore reforms to PJM governance and strengthen the role of states in regional decision-making.

 

Topics will include:

  • State Roles in PJM Stakeholder Processes
  • A Formally Recognized and Funded Governors Group to Represent States and Jurisdictions Within the PJM Process
  • The Role of States in Resource Adequacy
  • Evolution of RTO/ISO Mission Statements, Governance Models, and Decision-making Processes
  • State Roles in Other RTOs, ISOs, and Regions

Register to Attend: Individuals interested in attending the conference can sign up here.

Key PJM Updates & Policy Developments

Prices Go Higher in the July PJM Capacity Market Auction

Capacity prices soared to $329.17/MW-day system-wide for delivery year 2026/27, hitting the price cap approved by FERC after prices rose nearly 10-fold in the July 2024 auction. The clearing price is the highest in PJM history and an increase of $59.22 (22%) from last year’s record for the PJM auction. The results follow a trend of tightening supply and demand in recent auctions, which PJM has argued could lead to a capacity shortfall in the 2029/30 delivery year. PJM Board Chair David Mills said new load (data centers) “gobbled up” all new capacity in the auction. This auction also marked the first time ever that PJM has failed to secure enough generation to meet its target capacity reserve margin of 19.1%, only securing 18.9% reserve generation in the auction.

 

The July PJM capacity auction results make clear, for the second year running, that the PJM region desperately needs new generation, storage, and demand-side resources to meet growing electricity demand. But despite strong “build” signals from high prices, critical barriers are blocking projects from moving forward.

 

As United explained in our July 22 press release on the auction results, when prices go up, it’s meant to send a signal to energy developers: ‘We need more supply.’ But at the same time, PJM’s interconnection queue has been “closed for repairs” for three years, meaning households and businesses are paying for a price signal that the market can’t even respond to. Even more concerning than high prices for consumers is the looming resource adequacy crisis that high prices reflect, and PJM’s ability to keep the lights on in the face of massive demand growth.

PJM Initiates a Fast-Track Process to Establish Rules for Adding Data Centers

PJM stakeholders will explore options for adding large loads to the grid without threatening reliability, according to a letter from the PJM board. The Critical Issue Fast Path (CIFP) initiative will seek to develop a proposal with a goal of filing for approval at FERC by the end of the year. This timeline would allow the rules to be in effect for PJM’s 2028/2029 capacity auction, which is set to be held in June 2026. The PJM board said the fast-track effort will focus on four main issues: resource adequacy; reliability criteria; interconnection rules; and coordination.

 

PJM presented an initial proposal at a workshop on Aug. 18 following the board’s proposed scope for the initiative. The initiative follows a workshop PJM held on May 9 to explore issues surrounding the development of large loads in PJM. PJM is seeking written feedback on its conceptual proposal by August 27; any feedback should be no more than 3-5 pages and should be sent to Michele Greening and Matt Connolly.

Summer Weather Highlights PJM’s Precarious Resource Adequacy Situation

On June 23, PJM experienced its highest system peak load since 2011. PJM has issued 14 energy emergency alerts since June, and if not for the significant contribution of PJM demand response (DR) resources, PJM may not have been able to keep the lights on throughout the region so far this summer. PJM only issued two such alerts in the Summer of 2024. The frequency of the PJM alerts featuring warnings that generators need to be ready to bring on emergency supplies highlight how stretched the system is this summer.

 

PJM utilizes DR as a vital tool to manage grid reliability, particularly during periods of high demand or resource scarcity. Participants in DR programs, often large energy consumers, commit to reducing their electricity usage when requested in exchange for compensation from the PJM markets.

 

PJM Alerts This Summer:

  • June 19 to 26: Hot Weather Alerts
  • June 23 and 25: Hot Weather and Maximum Generation and Load Management Alerts
  • July 15-16: Hot Weather Alerts and Maximum Generation and Load Management Alerts
  • July 23: Hot Weather Alert for its Western region
  • July 24: Hot Weather Alert
  • July 25: Hot Weather, Maximum Generation and Load Management Alerts
  • July 26-27: Hot Weather Alerts in its Mid-Atlantic and Southern regions
  • July 28-29: Hot Weather, Maximum Generation and Load Management Alerts, Demand Response Implemented
  • July 30: Hot Weather, Maximum Generation and Load Management Alerts
  • Aug 11: Hot Weather, Maximum Generation and Load Management Alerts, Demand Response Implemented

PJM Governors Cite a “Crisis in Confidence” and Seek to Influence Board Nominations

On July 16, a coalition of nine PJM Governors wrote an open letter to the PJM Board of Managers stating that PJM “faces an unprecedented crisis of confidence from market participants, consumers, and the states.” The Governors cite PJM’s failure to bring new resources online and engage in effective regional transmission planning, and argue:

 

“Now these deficiencies threaten the bedrock reliability and affordability our consumers expect and deserve. We are deeply concerned that PJM’s response has been typified by halting, inconsistent steps and rising internal conflicts within the stakeholder community that have recently culminated in the abrupt termination of two long-standing members of the Board of Managers and the imminent departure of the CEO.”

 

The Governors went on to request a meeting with the members of the PJM Nominating Committee to share their proposal for a slate of candidates to fill the two vacant positions on the PJM Board of Managers, stating:

 

“In the long-term, we further believe these two Board seats must remain dedicated to candidates who are proposed by the states collectively and then vetted by the Nominating Committee, rather than leaving important decisions regarding every member of the Board to closed-door deliberations.”

 

PJM, in its July 18 response, rebuffed the states’ request, citing PJM’s Operating Agreement that puts the Nominating Committee and Members Committee in charge of electing Board members. PJM went on to invite the Governors to participate at the July 23 PJM Members Committee meeting, which Glenn Davis, Director of the Virginia Department of Energy and a former state legislator, attended on behalf of the nine governors. Davis offered a scathing rebuke of PJM at the open meeting and went on to announce the formation of a formal group of the PJM governors to complement OPSI, assisting PJM in charting a productive path forward on key issues (discussed below).

 

Two governors, Josh Shapiro of Pennsylvania and Glenn Younkin of Virginia, subsequently wrote to PJM suggesting that former FERC Commissioner Allison Clements and outgoing FERC Chair Mark Christie be nominated to the two open board seats as a “bipartisan problem-solving slate of candidates.”

84 PJM-based organizations Pen Open Letter to PJM Board Calling for Reforms

Organizations from across the PJM region submitted an open letter to the PJM Board of Managers on July 23, stating, “We are deeply invested in the success of PJM in ensuring reliable and affordable electricity for ratepayers,” and pointing to several priorities critical to meeting unprecedented load growth while serving customers reliably and cost-effectively:

  1. Interconnection Queue Reform
  2. Regional and Interregional Transmission Planning
  3. Capacity Market Reform
  4. Large load interconnection management

Updates on Ongoing PJM Proceedings

Effective Load Carrying Capability (ELCC) Senior Task Force Update

Recap: Effective Load Carrying Capability (ELCC) values measure how much each resource can be relied upon during times of system risk, influencing PJM’s capacity auction results, pricing, and resource development incentives.

 

Update: PJM has proposed a revised Accreditation Methodology for implementation for the 2028/2029 Base Residual Auction. The proposal aims to (1) better reflect the alignment between weather, load and resource performance; (2) adjust generator winter ratings to reflect that some resources can provide incremental capability above their summer capacity; and (3) incorporate demonstrated improvements in resource performance and system operation.

PJM Establishes Sub-Annual Capacity Markets Senior Task Force (SACMSTF)

Recap: PJM has long intended to move to a sub-annual capacity market. The Pennsylvania Governor’s Office proposed an issue charge to accelerate this transition, and gave an update in July.

 

Update: PJM has announced a new Sub-Annual Capacity Market Senior Task Force (SACMSTF), which is charged with exploring potential sub-annual capacity market solutions. The SACMSTF will utilize an independent consultant to investigate the viability and desirability of proposed sub-annual capacity market solutions. The consultant will provide education and analysis on various aspects of sub-annual capacity models, including approaches used by other ISOs/RTOs, key design principles and criteria, scenario analysis, and modified cost allocation approaches. In addition to education and analysis, the consultant will provide proposed solutions to address the areas identified in the scope of work. The SACMSTF will report to the Markets & Reliability Committee (MRC). The first meeting of the SACMSTF will take place on August 26.

FERC Order No. 1920 Compliance – PJM Transmission Owner Engagement

Recap: The Transmission Expansion Advisory Committee (TEAC) provides advice and recommendations to aid in the development of the Regional Transmission Expansion Plan (RTEP), and has also been addressing PJM’s compliance with FERC Order No. 1920 (long-term regional transmission planning). On March 13, April 10, and May 9, special TEACs, PJM presented the conceptual approach to comply with Order 1920 regional requirements, and assumptions and methods for an informational Base Scenario.

 

Update: On June 27, PJM presented its “compliance tracker,” which translates the conceptual compliance into high-level language corresponding to each of Order 1920’s regional requirements. On July 18, PJM Stakeholder provided feedback on the compliance tracker.

 

Relevant material can be found below:

FERC Filings & Decisions

The Federal Energy Regulatory Commission is an important independent agency that regulates interstate transmission of electricity, natural gas, and oil. As the agency that oversees regional transmission authorities such as PJM, it is important to know what FERC is working on and how this may impact consumers in your state. Read more FERC PJM Insights below:

EO 14262 Implementation – DOE Releases Resource Adequacy Assessment in response as Precursor to FPA Section 202(c) Orders

  • As directed by Executive Order 14262, Strengthening the Reliability and Security of the United States Electric Grid, the U.S. Department of Energy (DOE) released their Resource Adequacy Report: Evaluating the Reliability and Security of the United States Electric Grid. The report warns of an impending resource adequacy crisis on the basis of high anticipated load growth, high retirements, and low resource entry. The EO that directed the report requires DOE to take steps to delay or prevent the retirement of existing resources. Advanced Energy United, American Clean Power Association, and the American Council on Renewable Energy have formally challenged in a rehearing request to the DOE, citing the flaws in DOE’s analysis, shortcomings in the process followed when developing the report, DOE’s overreach of its authority, and the limitations and long-term risks of the EO’s single-threaded solution to meeting resource adequacy needs.

ER24-2045-000 – Order On Compliance (Order 2023): PJM Orders 2023 and 2023-A

  • On July 24, 2025, FERC issued this order regarding PJM Interconnection’s compliance filing with Order Nos. 2023 and 2023-A.The order finds that PJM’s filing partially complies with the requirements and directs further compliance filings within 60 days. The Commission granted several of PJM’s requested independent entity variations, including: (1) use of PJM’s Queue Scope tool instead of an interactive heatmap for public interconnection information; (2) retention of PJM’s three-phase cluster study process (480 days total) rather than the pro forma 150-day timeline; (3) limiting commercial operation date extensions to one year instead of three years, due to PJM’s forward capacity market requirements; (4) allocation of cluster study costs on a 100% per capita basis among interconnection customers; (5) retention of existing site control requirements (100% at interconnection request); and (6) use of tiered study deposits based on MW size ($75,000 for up to 20 MW, scaling to $400,000 for over 750 MW). The Commission directed PJM to submit further compliance filings addressing: tariff revisions incorporating Queue Scope requirements and update procedures, affected system study agreements and coordination procedures, public posting of cluster information within required timeframes, acreage requirements for different generating facility technology types, and ride-through requirements for non-synchronous generating facilities. The Commission accepted PJM’s approach using forfeitable readiness deposits that increase at each phase (50% of Deposit No. 1 at Phase I, 100% at Phase II, and 100% of all deposits at Phase III), finding this accomplishes Order No. 2023’s goals of reducing late-stage withdrawals. The order reflects the Commission’s effort to balance PJM’s unique characteristics as a large RTO with substantial interconnection volume against the standardization goals of Order No. 2023’s interconnection reforms. Parties have until August 25, 2025 to request rehearing of FERC’s Order.

ER25-1128-001– Order Rejecting Tariff Revisions for Transferring Capacity Interconnection Rights (CIRs)

  • On August 8, 2025, FERC issued this order rejecting PJM Interconnection’s proposed tariff revisions for transferring Capacity Interconnection Rights (CIRs) from deactivating generation resources to replacement resources. FERC found the proposal unjust and unreasonable primarily because the unlimited one-time Commercial Operation Date extension undermines the purpose of the expediting generator replacement, the lack of a maximum time limit could result in capacity being held unused for indeterminate periods while customers bear maintenance costs without any benefit, and these provisions could enable market power abuse and obstruct open access to the transmission system. The Commission acknowledged potential benefits of generator replacement processes but determined PJM’s specific proposal lacked sufficient safeguards to ensure efficient and timely resource replacement.
  • PJM has announced that it plans to file a revised CIR transfer proposal in October.

FERC Open Meeting – July 24, 2025 & Leadership Transition

  • Chair Mark Christie led and attended his final meeting as a Commissioner at FERC on July 24, 2025. During the meeting the Commission issued five electric orders, one of note being on PJMs Order 2023 Compliance filing (see above). Commissioners thanked Chair Christie for his years of service, and Chair Christie thanked various staff for aiding in his service to rate payers over the many years. Chair Christie formally resigned on August 8.
  • On August 13, President Trump named David Rosner the new Chair of FERC, effective immediately.

Commissioner Nominations

  • There have been two nominated Commissioners, Laura Swett for former Chair Mark Christie’s seat (term expiring June 30, 2030) and David LaCerte for the remainder of former Chair Willie Phillips’ term (term expiring June 30, 2026). Both nominations have been received by the Senate and are awaiting review by the Committee on Energy and Natural Resources. We expect hearings and confirmations in late August to September. Despite Chair Christie’s departure, FERC still has a quorum with three sitting Commissioners.

Upcoming Events & Opportunities

Meeting: Organization of PJM States, Inc. (OPSI) Annual Meeting
October 6–7 | Washington, D.C.

 

OPSI’s annual meeting this October will bring together state leaders, regulators, and market participants to discuss emerging trends and challenges in the PJM region.

  • Speaker Nominations: Individuals or parties that wish to participate as panelists can contact OPSI Staff members: Greg Carmean, greg@opsi.us and Ben Sloan, ben@opsi.us
  • Register to Attend: Individuals interested in attending the October meeting can register here.

Discussion topics will include:

  • Data Center Load Growth: Is further adaptation at the wholesale level needed?
  • How can PJM Add Generation More quickly?
  • 2026/27 Base Residual Auction: What’s next?
  • Beyond Second-Generation Capacity Markets: What does the future hold?
  • Transmission Planning Under Order 1920: Is the stage set, or is there more work to do before the first cycle?
  • From the Top: How have executive orders, DOE actions, and changes in federal law impacted wholesale markets?

Featured Reports & Resources

Resource: Gridlock to Growth – A State Policy Resource on Regional Transmission
Advanced Energy United | 2025

 

While much of the transmission discussion focuses on state actions to build a reliable and affordable grid, many of the most significant decisions happen at the regional level through Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). GridlocktoGrowth.org is a new resource designed to help state lawmakers engage effectively with their RTOs and ISOs.

 

The site features:

  • Downloadable fact sheets for each transmission planning region
  • An overview of FERC and its role in transmission planning
  • Policy recommendations for state leaders seeking to address transmission challenges

Explore GridlocktoGrowth.org and share it with colleagues to help advance solutions to regional transmission barriers.

PJM in the News