PJM Grid Misses Power Supply Target Amid AI Surge

Summary

PJM Interconnection's capacity auction for the 2028 delivery year fell 6.8 gigawatts short of its reliability target. Price caps at $325 per megawatt-day are well below the $500 developers say is needed to build new power plants, highlighting a disconnect between regulators and generators. The grid, which serves 13 states including the largest data center cluster in Virginia, says risk is slightly elevated but no imminent blackout is expected. Regulators plan a meeting next week to consider rule changes.

• PJM capacity auction for 2028 delivery missed reliability target by 6.8 GW.
• Auction prices were capped at $325/MW-day, while developers say $500+ is needed to incentivize new generation.
• PJM serves 13 states from Chicago to Washington D.C., including the world's largest data center concentration.
• Grid operator says current risk is 'slightly elevated' but no blackout is imminent.
• Regulators will meet next week to discuss potential rule adjustments.
• The shortfall underscores the challenge of meeting surging electricity demand driven by AI and data centers.