Planning
PJM Planning Prepares for Burgeoning Electricity Demand
The 2025 Long-Term Load Forecast set the stage for the year’s focus on planning for an unprecedented increase in electricity demand, driven primarily by the proliferation of data centers in the PJM footprint, while maintaining an adequate power supply.
PJM RTO Summer Peak Demand Forecast
Released in January, the forecast (PDF) indicated that PJM’s summer peak usage will climb by about 70 GW, to 220 GW, over the next 15 years. For context, the record summer peak for the PJM footprint was 165 GW in 2006.
Later in the year, PJM’s evaluation of large load adjustment requests, a key variable in the annual long-term load forecasts, confirmed that electricity demand from data center growth is projected to grow up to ~30 GW between 2025 and 2030.
It is critical for PJM to get the most accurate information about data centers and other new large loads in order to avoid double-counting in its forecasts, which are used both for procuring enough resources in the capacity market and for planning transmission for the regional grid.
Part of improving forecasting methods includes implementing a new standardized process (PDF) for load serving entities to submit their requests for adjustments, with an eye toward gathering information to measure the likelihood that the new load will materialize and when.
Critical Issue Fast Path
Beginning in August, PJM and stakeholders tackled the subject of how best to integrate large loads head-on with the Board’s initiation of the Critical Issue Fast Path for Large Load Additions.
Goal: An expedited stakeholder process to develop reliability-focused solutions to ensure large load additions can continue to be integrated rapidly and reliably without causing resource inadequacy, and while recognizing jurisdictional boundaries and data center relationships with their contracted electricity companies.
After three months of meetings, participants produced 12 proposals, including one from PJM (PDF). None received a supermajority of support in an advisory vote by the Members Committee, so the Board proceeded to study all of the recommendations and crafted a plan that considered the components of all the proposals. The Board issued its decisional letter stemming from the Critical Issue Fast Path (CIFP) process in January 2026.
Interconnection Process Reform
As electricity demand continues to grow, connecting new generation to the grid remains a critical priority.
In 2025, PJM achieved major milestones in implementing its reformed interconnection process in addressing one of the region’s most complex challenges.
PJM has processed more than 170,000 MW of new generation requests since 2023, with 30,000 MW to be processed in 2026. PJM’s new Cycle process, launching in April 2026, is designed to complete studies within one to two years, depending on system impacts.
Approximately 54 GW of projects have completed PJM’s study process and have either signed or been offered Generation Interconnection Agreements, enabling them to move forward to construction. Project timelines beyond that point depend on factors outside of PJM’s jurisdiction, including permitting, supply chain and financing conditions.
PJM’s Interconnection Queue
(2020–Present)
New Tools Streamline the Process
Each project requires extensive study by PJM staff, which is why the new interconnection process includes strict milestones and readiness deposits to help filter out speculative projects and encourage the most viable submissions.
Innovative Approach: To help streamline the process further, PJM in April announced a multiyear collaboration with Google and Tapestry (PDF) to deploy AI-enhanced tools in PJM’s planning process for connecting new generation resources.
This joint effort has the goal of significantly cutting processing times for reviewing new interconnection applications, allowing large volumes of requests to be processed quickly and accurately.
Additional automation in the interconnection process, along with increased staffing over the past several years, has improved quality while significantly reducing the backlog.
New Ways To Get Resources Connected
Stakeholders and PJM also were busy throughout the year thinking of how to complement the traditional interconnection process with new ways to get megawatts onto the grid.
Among them, FERC approved two PJM proposals to help boost the supply of electricity:
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The Reliability Resource Initiative (RRI) was designed to get shovel-ready, high-reliability projects connected faster by adding them to the final transition cycle (Transition Cycle 2) of PJM’s reformed interconnection process, rather than waiting for the new cycle interconnection process to be fully implemented.
Jump-Starting Shovel-Ready Projects
These upgrades and new construction projects are expected to come online by 2030 and 2031.
- The second initiative aims to streamline the use of Surplus Interconnection Service (SIS), or the unused portion of interconnection service for a facility that cannot or does not operate continuously, every hour of every day year-round. An example of a pairing using SIS is a renewable resource combined with battery storage.
Several other stakeholder suggestions for interconnection reform – such as looking to partially utilize generation that can be in service prior to the completion of required network upgrades and consideration of alternative generation and transmission to Reliability Must-Run (RMR) arrangements – are either in place or being discussed in the stakeholder process.
For example, PJM is enhancing its interim deliverability rules to allow projects to operate as energy-only resources earlier in the queue process.
Another proposal to make it easier to transfer Capacity Interconnection Rights from a deactivation resource to replacement generation was approved by FERC in early 2026.
Some Connection Rules Simplified
FERC also approved PJM’s proposal to simplify the rules for connecting generation at the distribution level.
FERC’s order authorizes PJM to eliminate the application of the “first use” legal test the commission created in 2003, which requires certain distribution-level interconnections to be processed under federal, rather than state and local, interconnection rules.
The new reforms will take effect April 28, 2026, after which all resources in the PJM region connecting to distribution facilities will do so under state and local rules and agreements, rather than the federal rules and agreements of the PJM Tariff.
The move will enable PJM staff to reallocate time and resources to their work on transmission-level interconnections and provide greater clarity to project developers earlier in the interconnection process.
Additionally, these reforms affirm the important role of PJM’s state and local regulatory authority partners in setting the rules that govern the physical interconnection of resources to the distribution facilities that they regulate.
Transmission Improvements
In addition to connecting generation to the grid, PJM plans for transmission upgrades and expansion so electricity can reach 67 million people whenever and wherever they need it.
In February, the Board of Managers approved projects recommended to solve reliability needs identified in Window 1 of the 2024 Regional Transmission Expansion Plan.
Completed Interconnection System Impact Studies
These projects address accelerated load growth in various areas of the PJM region, changes in the mix of generation resources and the resulting shifts to regional power flows.
The collection of solutions is expected to require an investment of approximately $6 billion.
In February 2026, the Board is expected to approve another collection of projects recommended by staff to solve needs identified in the 2025 RTEP Window 1.
These projects address separate needs in the eastern, southern and western areas of the PJM footprint. Those needs are driven by accelerated load growth in multiple regions, the addition of new generation in southern Virginia, the current delays and potential removal of New Jersey offshore wind projects, and increased regional flows toward the eastern portions of PJM’s footprint.
New Long-Term Planning Process
Going beyond the traditional RTEP process, PJM in December outlined a new long-term transmission planning process in compliance with FERC’s Order 1920.
PJM’s proposed long-term planning process (PDF) will achieve the Final Rule’s goal to transition transmission planning processes toward a more proactive, long-term planning approach.
Consistent with Order 1920, PJM’s proposed long-term planning approach relies on extensive collaboration with the PJM Region’s Relevant State Entities – including during the development of the assumptions and scenarios that will be used to identify long-term transmission needs and potential transmission solutions.
FERC Order on Co-Location
The end of the year brought an order from FERC on co-location that had been in the works since February 2025.
The draft order found the PJM Tariff unjust and unreasonable because it does not contain proper provisions for services that apply to interconnection customers serving co-located load or eligible customers taking transmission service on behalf of co-located load.
It directed PJM to submit compliance filings, established a paper hearing and directed PJM to file an informational report on the status of proposals submitted under the Critical Issue Fast Path process on large load additions.
Notably, the order directed PJM to create three new transmission services for co-located load willing and able to limit their energy withdrawals under certain conditions: