Federal, State Leaders Call on PJM to Accelerate Baseload Generation to Address Surging Demand

Federal energy officials and Mid-Atlantic governors on Jan. 16 urged PJM Interconnection to temporarily revise market rules to address escalating electricity prices and rising reliability risks across the region. The initiative calls for an emergency procurement auction intended to accelerate the development of more than $15 billion of new firm baseload generation, positioning the action as an immediate reliability intervention as load growth intensifies.

The effort reflects concerns that PJM’s market rules and resource policies have tightened supply conditions, including through the retirement of firm generation resources. Supporters linked the action to President Trump’s National Energy Emergency declaration issued in January 2025, arguing that prior policy contributed to price increases and growing blackout risk. The announcement cited nearly 17 gigawatts of baseload retirements during the Biden administration, warning that the region’s resource mix is increasingly unable to keep pace with system needs.

A key element of the proposal is providing long-term certainty for new generation investment. The package recommends offering 15-year revenue certainty for new power plants to reduce financing risk and accelerate construction timelines for dispatchable capacity capable of supporting peak demand and winter reliability.

The recommendations also seek to protect residential ratepayers by limiting the compensation levels that existing power plants can receive through the PJM capacity market, aiming to prevent sharp bill impacts while the market works through near-term scarcity conditions.

The initiative places special emphasis on rapidly rising demand from data centers. The direction proposes that data center customers pay a larger share of costs for any new generation procured through emergency actions, particularly where those customers have not self-procured new capacity or agreed to be curtailable during grid stress events, reducing the risk of shifting costs to households.

The leaders characterize the measures as temporary but necessary steps to stabilize grid conditions, support manufacturing-intensive economies, and reduce exposure to reliability-driven price spikes while longer-term supply additions are brought online.