PJM Proposes Faster Interconnection and Price Controls to Manage Rising Demand

PJM Interconnection has proposed two changes aimed at bringing new power online faster while limiting electricity price spikes. The proposals were filed with the Federal Energy Regulatory Commission as demand rises across the grid, driven by data centers, electrification, and broader load growth.

Together, the changes target both sides of the equation: adding new supply more quickly and reducing near-term price volatility.

Fast-Tracking Large Generation Projects

PJM is proposing a new Expedited Interconnection Track that would allow up to 10 large projects per year to move through the interconnection process on a fast-track basis. To qualify, projects must be new or uprated capacity resources providing at least 250 MW, have support from the state’s primary siting authority, and be capable of coming online within three years.

Under this structure, PJM estimates projects could move from interconnection request to a Generation Interconnection Agreement in about 10 months. That represents a significant shift from the current process, where projects often take four or more years due to a large backlog in the interconnection queue.

Targeting High-Impact Projects

The expedited track is designed to prioritize a limited number of high-impact projects without disrupting the broader queue. If approved, the program would run through the end of 2027 and focus on accelerating projects that can meaningfully contribute to near-term reliability.

Extending Capacity Price Controls

PJM is also seeking approval to extend a temporary price collar for the next two capacity auctions. The proposal would set a price cap of about $325 per MW-day and a floor of about $175 per MW-day of UCAP.

Without this adjustment, the default price cap for the next auction would rise to roughly $550 per MW-day. PJM’s last two auctions used a similar collar, which the Independent Market Monitor estimates reduced capacity costs by about $13.1 billion.

Stabilizing Costs During Reform

The price collar would apply to the 2028/29 and 2029/30 delivery years while PJM develops broader market reforms and a new reliability backstop procurement expected later this year. The goal is to limit extreme price swings while longer-term changes are being designed.

Why These Changes Matter

PJM operates the largest wholesale electricity market in the United States, serving more than 65 million people across 13 states and Washington, D.C. Demand is increasing quickly, particularly from large data center development and electrification.

The expedited interconnection track addresses the supply side by helping new generation connect faster. The price collar addresses the cost side by limiting short-term volatility in capacity markets.

PJM has asked FERC to approve the price collar by April 28 and the expedited interconnection track by May 28. If approved, these measures could help align grid expansion timelines with rising demand while keeping electricity costs more stable in the near term.