Plan to Expedite Mid-Atlantic Power Plant Additions Approved

The Federal Energy Regulatory Commission has approved two proposals to help boost the supply of electricity and head off potential power shortages in the Mid-Atlantic region.

PJM Interconnection, the regional electric grid operator, received approval for its Reliability Resource Initiative, a plan to move high-reliability, shovel-ready, generation projects forward more quickly to help head off growing risks of a generation shortage as the demand for power surges. PJM oversees the grid in all or part of 13 states, including Pennsylvania, and Washington, D.C.

“This one-time initiative should provide a much-needed on-ramp to the reliability of the PJM system in the short term as we continue to move existing queued projects through our transition cycles,” Chris O’Hara, PJM senior vice president said in a statement.

The commission said it its decision that the proposals were “just and reasonable and not unduly discriminatory or preferential” but renewable energy and environmental groups were critical, arguing that RRI will favor new natural-gas fired plants, which emit CO2, over clean energy projects.

PJM has issued warnings for the past several years that electric generation capacity was not growing fast enough to meet rising demand from continued electrification, data centers, and large industrial projects. It has said that a capacity shortage could occur as soon as 2026-2027. Its most recent capacity auction for 2025-26, where guaranteed amounts of power are purchased from electric providers, saw prices increase by more than 800% from the previous year.

The Center for Energy Policy will host a free webinar on March 19 on PJM’s role in meeting the challenges facing the electric grid. Registration is available here.

The RRI is a one-time process where electric generation providers from all types of resources with a minimum of 10 MW of capacity can apply to be added to the final cycle of PJM’s interconnection process, essentially jumping the line of proposed projects. The number selected is capped at 50, and projects will be scored on reliability, capacity, and operational date viability.

PJM’s existing queue of proposed projects is 94% from renewable sources a 6% from natural gas. It also noted that renewable projects have a historical rate of completion of about 5%. The retirement of coal-fired power plants that produce 24/7 energy and their replacement with intermittent renewables, coupled with increasing demand, is driving the problem. Natural gas-fired power plants, which provide the majority of Pennsylvania's power, can produce readily available power with less than half the CO2 emissions of coal.

The second initiative calls for streamlining the use of the Surplus Interconnection Service (SIS), “the unused portion of interconnection service for a facility that cannot or does not operate continuously,” a PJM release explains. An example would be using battery storage to capture excess renewable energy and release it at times of peak demand. This would allow renewable energy sources to contribute to the grid at all times.

While PJM is hopeful that the initiatives can help it bring more generation capacity online quickly, construction of power plants and large energy projects typically take years, and might not help meet the need for more power within the decade. However, PJM continues to advance other initiatives to address the tightening supply of electricity.