PJM Fails to Require Data Centers to Bring Their Own Generation, Launches New Process to Build Gas Plants

Lawmakers and other stakeholders sought to enact new policies that would have driven down power prices, but PJM Board of Managers did not adopt them

WASHINGTON, D.C. — PJM Interconnection, the entity that manages the regional grid serving Maryland and other states, today issued their long-awaited position on the Critical Issue Fast Path (CIFP) aimed at addressing rapidly growing energy needs of new data centers. This move follows a November stakeholder vote that failed to gain consensus as to any one CIFP proposal, a December capacity auction in which PJM, for the first time, failed to meet its grid reliability reserve target, and today’s announcement from the White House and the governors of the 13 states PJM serves.

PJM’s recommendation comes as data centers look to add 30 gigawatts of energy demand to the grid in the coming years. Without any protections, this new data center load could cost the average ratepayer an additional $70 a month. On November 19th, 2025 PJM members voted on different potential solutions to the costs created by data centers. At that voting session, the comprehensive proposal that got the most votes was one that would not allow data centers to connect to the PJM grid until there is sufficient generation to provide electricity to those facilities. This Bring Your Own Generation (BYOG) approach is broadly supported by stakeholders. Advocates from across the PJM region recently sent a letter to PJM urging support for a Bring Your Own Generation requirement. 

However, in their CIFP proposal, PJM rejected BYOG proposals that would have ensured new data center load is matched with equivalent new generation. Instead PJM is creating a new expedited interconnection process that will be biased towards fossil fuels. 

“Under PJM’s proposal there are still not sufficient protections for ratepayers,” said Del. Lorig Charkoudian, vice chair of the House Economic Matters Committee. “The primary fast tracking of energy PJM is doing is biased towards fossil gas. Given that solar and batteries are the fastest, cheapest way to provide new generation, this is another example of PJM serving for-profit energy companies and not families who can’t afford their energy bill.” 

PJM’s Board of Managers officially recommended that: 

  • PJM launch a Reliability Backstop Procurement, which will allow new gas plants to skip the line and get connected to the grid before clean energy projects which have been waiting to connect for years.
  • Improve PJM’s process of projecting demand growth.
  • Allow data centers to connect to the grid more quickly if they choose to bring their own generation.
  • Data centers that do not bring their own generation will lose access to the grid first in a scenario where the grid can not meet the demand of the grid
  • Review the reliability pricing model that PJM currently uses.
  • PJM request feedback on extending the capacity auction price cap for the next two years. 

While some of these proposals have the potential to partially lower the cost spikes associated with data centers, the proposal fails to take the two most necessary actions: enacting firm requirements that data centers bring their own generation and allowing clean energy to connect to the grid faster. 

“The fastest way to reduce energy costs is to build the clean energy waiting on PJM’s approval to connect to the grid. However, instead of deploying the clean energy projects already in their queue, PJM is beginning a new process that will favor fossil fuel power plants,” said Quentin Scott, Federal Director at Chesapeake Climate Action Network. 

The proposal put forward by the PJM Board of Managers will now be reviewed by PJM stakeholders before being sent to the Federal Energy Regulatory Commission for final review. 

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Chesapeake Climate Action Network is the first grassroots organization dedicated exclusively to raising awareness about the impacts and solutions associated with global warming in the Chesapeake Bay region. Founded in 2002, CCAN has been at the center of the fight for clean energy and wise climate policy in Maryland, Virginia, Washington, DC and beyond.

PJM Auction Means Another Year of High Electricity Prices

Despite pressure from Maryland legislative leaders and advocates, PJM fails to connect clean energy to bring prices down 

 

BALTIMORE, MD – PJM, the electricity grid operator responsible for keeping the lights on in 13 Mid-Atlantic and Midwestern states plus the District of Columbia, shared the results of its most recent capacity auction yesterday: there is no good news for ratepayers. As a result of this auction, the total price of electricity has reached $16.4 billion. The prices that customers in PJM’s region will start paying in June 2026 are nearly $14 billion higher than the $2.2 billion paid in 2024. And that increase would have been even greater if not for the temporary price cap that was negotiated by Pennsylvania Governor Josh Shapiro, in conjunction with Maryland Governor Wes Moore and other governors. Without this cap, the price of the capacity auction would have been 59% higher. Future auctions will not have this protection in place, underscoring the urgent need for PJM to adopt longer-term reforms that safeguard ratepayers.  

If PJM integrates clean energy projects into its grid more quickly, that could lower capacity prices and enhance grid reliability. Compared to other grid managers, PJM has one of the longest timelines in the country for connecting new clean energy projects. 

PJM and the large energy generators and utility companies that dominate its board must be  held accountable for the price spikes they have caused. PJM makes decisions that are to blame for rising costs and increasing the risk of blackouts, e.g., not requiring data centers to provide their own power or agree to be shut off in the event of low energy supply, as many advocates and elected officials have urged. PJM has also failed to protect ratepayers from having to shoulder additional capacity costs created by new data center demand — a cost which could reach $100 billion by 2032. 

Governor Moore, multiple state agencies, and members of the Maryland General Assembly have pushed back on PJM for flaws in its rate-setting process and chronic failure to connect clean energy projects to the grid. Most recently, Gov. Moore joined a bipartisan group of Governors calling on PJM to make policy changes to mitigate skyrocketing electric supply rates. 

In a functioning capacity market, prices rise in response to low energy supply, incentivizing the development of new power sources to meet demand. However, PJM hasn’t lacked new energy projects interested in connecting to the grid. As of April 2024, PJM had 286.7 gigawatts (GW) of backlogged proposed energy projects waiting for PJM’s approval to be connected to the grid – enough to power roughly 228 million homes for a year. More than 90% of these projects are clean energy like wind, solar, and battery storage, fueling criticism that PJM is standing in the way of new clean energy and driving up profits for legacy power generators. A recent analysis found that if PJM increased the speed at which it allows new projects to connect to the grid, it would save individual households at least $500 a year. 

Instead of fixing its broken interconnection process, PJM is considering creating a fast-track that would favor large thermal generators like gas plants and allow them to bypass the line. PJM acknowledges that this expedited track may cause further delays in processing the thousands of cheaper and quicker to build wind, solar, and storage projects waiting in the queue.  

While PJM’s slow processes have limited Maryland’s ability to build new energy projects, Maryland lawmakers took action in 2025 to speed up the deployment of batteries and solar power in the state.

Increases in electric supply rates have exacerbated rate pain for Marylanders who have already been struggling with the high utility delivery charges. Subsidiaries of the Exelon Company, including BGE, PEPCO, and Delmarva Power, increased delivery rates for gas and electricity at a rate far outpacing inflation. During the 2025 legislative session, the Maryland General Assembly made several changes to utility ratemaking policies, which are expected to slow the rate of increase when implemented by the Maryland Public Service Commission.

In response to the auction results, advocates made the following statements:

“This capacity market auction is another example that PJM’s failure to connect clean energy to the grid is driving up our energy bills,” said Brittany Baker, Maryland Director of Chesapeake Climate Action Network. Ratepayers are footing the bill for PJM’s outdated policies and slow-moving practices. This massive wealth transfer is breaking the backs of Marylanders.”

“Marylanders will face another year of outrageous electricity bills because PJM has not taken the necessary steps to allow the clean energy projects in the queue to supply the clean, reliable energy we need to meet rising demand,” said Maryland PIRG Foundation Senior Advisor Emily Scarr. “PJM needs to reform its broken interconnection process and ensure that the decisions it makes align with the interests of the public, not utility and incumbent power generator interests. Marylanders, and all consumers in the PJM region, deserve a grid that is reliable, functional, and that doesn’t put its thumb on the scale for dirty power.”

“PJM is trying the same thing over and over, and they keep getting the same result: higher energy prices for all of us,” said State Delegate Lorig Charkoudian. “It’s past time for PJM to try something new and implement reforms that will lower our energy bills by allowing more clean energy to connect to the grid.” 

“These are difficult times for Maryland families, and many report they can barely make ends meet with increases in rent, food prices, and other living expenses. Adding higher electric bills will push some families into homelessness or bankruptcy,” said Laurie Welch with Third Act.

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