A bipartisan group of governors wants a larger seat at the table of PJM Interconnection, the regional electric grid operator that has had issues getting clean and affordable energy sources onto the grid in multiple states, including Virginia.
Nine governors, including Gov. Glenn Youngkin (R-Va.), sent a letter to PJM last week asking for the power to nominate candidates to fill two seats on the regional grid operator’s Board of Managers, and for the creation of “a formal group of the PJM governors” to provide additional input to the board.
“Due to our substantial increase in economic development, Virginia’s energy demand is increasing,” said Youngkin, in a statement. “The proposal laid out by this bipartisan group of governors is an important step in giving states a seat at the table. It’s critical to ensure PJM understands the energy challenges its member states face and allows states to collaborate and present workable solutions.“
In their letter, the nine governors cited problems including “PJM’s multi-year inability” to get more generation sources on the grid, and long-term transmission planning that “has deprived our states of thousands of jobs and billions of dollars in investment that may flow to other regions.”
“We are deeply concerned that PJM’s response has been typified by halting, inconsistent steps and rising internal conflicts within the stakeholder community that have recently culminated in the abrupt termination of two long-standing members of the Board of Managers and the imminent departure of the CEO,” the governors wrote, while saying they have a slate of candidates to suggest to fill the two vacancies.
“At a time when PJM faces difficult decisions that could substantially raise consumer bills, we strongly believe ongoing Board-level representation of these perspectives is essential to preserving PJM’s legitimacy,” the letter said.
The letter comes as PJM, the nation’s largest regional transmission operator overseeing Virginia, all or part of 12 other states and the District of Columbia, from Tennessee to Michigan, grapples with the increased electricity demand sweeping the country largely due to data center development.
According to a presentation PJM made at a Virginia Commission on Electric Utility Regulation meeting in May, the grid operator this year is projecting just under 225,000 megawatts of electricity demand in 2040, an increase from 2024 projections of just over 185,000 megawatts in 2040 and 2023 projections of just over 165,000 megawatts in 2040.
According to a presentation PJM made at a Virginia Commission on Electric Utility Regulation meeting in May, the grid operator projected just under 225,000 megawatts of electricity demand in 2025, an increase from just over 185,000 megawatts in 2024 and just over 165,000 megawatts in 2023.
Though there’s concern over the accuracy of data center development projections due to some proposals not panning out, Dominion Energy, Virginia’s largest utility, projected in its latest long term planning document that it expected about 18,000 megawatts of demand in 2024 to increase to about 33,700 megawatts of demand in 2048. Additional demand projects have since surfaced.
At the same time, PJM had about 70,281 megawatts of projects as of March stuck in what is called an interconnection queue that has been closed since 2022 because of permitting delays, largely around ensuring adequate transmission is available to deliver varying sources of supply to varying sources of demand.
Virginia, a state that imports 40 percent of its electricity, had about 37,751 megawatts as of May that were held up in the queue, with about 30,000 of those megawatts coming from solar, storage and solar and storage projects. The rest are wind, both offshore and onshore, and natural gas.
The end result of not having enough generating projects connected to the grid are surges in PJM’s capacity market, which is used to buy electricity generation, and conservation during peak strain on the grid during periods of extreme heat and cold.
Less projects on the grid mean the cost to use resources in the capacity market surges. The capacity market prices, which were released Tuesday afternoon, are partly intended to send a market signal to developers that more generation capacity is needed on the grid. But the interconnection queue delays “undermine” that signal by not letting companies and utilities build projects, in the eyes of Virginia.
“Entities can’t respond to market prices,” said Glenn Davis, Virginia Energy director, in an interview. A lack of building, he added, “prevents maximizing generating growth and keeps costs high.”
“We’re focused on working with this bipartisan group of governors to fix PJM,” Davis said, quashing any talk of Virginia actually leaving PJM. “All of us believe that we can make PJM be [an] efficient organization necessary to provide [an] affordable, reliable and clean grid for our region.”
PJM says the problem with the grid’s available resources stems from state and federal policies to retire polluting fossil fuel sources. In 2020, under Democrats’ trifecta control, Virginia passed the Virginia Clean Economy Act, which mandates retirement of carbon-emitting electricity sources by 2045 for Dominion Energy and 2050 for Appalachian Power Company, as well as the buildout of solar wind and battery projects to transition Virginia’s electric grid to a clean one to address climate change.
Dominion Energy did not respond to a request for comment on the governor’s letter. Appalachian Power, the parent company of Appalachian Power Company that services Southwest Virginia, said in a statement that it is supportive of the PJM board’s nominating committee “bringing forward qualified candidates for the open positions on the Board that have demonstrated utility and/or grid systems experience and understand the vital role that transmission owners play in maintaining reliability for customers.”
In response to the governor’s letter, David Mills, chairman of the PJM board, said the board would take up filling the two empty seats at its Wednesday meeting in Valley Forge, Pennsylvania. Mills also responded to the criticism by stating state and federal policies have “pushed a meaningful amount of generation capacity into retirement,” and “discouraged new entry” of fossil fuel use to “firm up” the existence of renewable energy in the generation queue.
In a statement, PJM said: “PJM’s Board appreciates the Governors’ engagement and has responded directly. While perspectives may differ, PJM remains focused on its core mission: delivering reliable, affordable power to 67 million people and navigating complex stakeholder priorities with transparency and integrity.”
Ric O’Connell, executive director at GridLab, a clean energy advocacy organization, said PJM’s response is “nonsensical.” He pointed to ERCOT and SPP, the regional grids in Texas and the Midwest, respectively, having larger amounts of wind and solar than PJM and no clamouring for more fossil fuels.
“All of these other grids are just running along fine,” yet PJM claims fossil fuels are needed to back up renewables, O’Connell said. “I think 80 percent of it is the status quo profits [of] the members who essentially own PJM, and then 20 percent is just inherent conservatism and lack of familiarity with this new world with its institutional inertia.”
Cassady Craighill, technical education director at GridLab, added that the PJM Reliability Resource Initiative, a plan to fast-track 51 projects through the interconnection queue, includes several from Dominion Energy and natural gas-fueled technologies that won’t come online until the next decade.
Recently, she said, PJM also had high costs of electricity, compared to the costs in Texas during heatwaves. According to Grid Strategies, prices during a recent heatwave reached $3,700 per megawatt hour in PJM’s territory, compared to $60 a megawatt hour in Texas. The Energy Information Administration projected PJM to have “the highest wholesale power prices this summer,” at $57 a megawatt hour, a $10 increase from last summer, while Texas is projected to cost $38 a megawatt hour, a $4 increase from last summer.
Gas technologies froze in Winter Storm Uri, Craighill added.
“It’s very manufactured scarcity,” Craighill said. “Those weather extremes will only get worse and PJM’s failure to meet the moment will continue to have adverse reliability and affordability impacts on customers.”
Following a stakeholder process to make reforms, PJM has submitted to FERC plans to change its interconnection queue under Order 2023, with those plans being rejected while wanting more time to process the interconnection queue, said Clara Summers, campaign manager for Consumers for a Better Grid, a ratepayer advocate that has a vote within PJM as a consumer advocate out of Illinois. FERC is expected to release a decision on PJM’s latest interconnection queue reform plan on Thursday, making for “a big week,” she said.
“For a grid operator who says that there is potentially a reliability crisis on the horizon, to then say we would like to take extra time to bring more resources online,” Summers said. “That just doesn’t compute. It doesn’t make sense.”
Correction: This article was updated to clarify PJM’s demand projections.
About This Story
Perhaps you noticed: This story, like all the news we publish, is free to read. That’s because Inside Climate News is a 501c3 nonprofit organization. We do not charge a subscription fee, lock our news behind a paywall, or clutter our website with ads. We make our news on climate and the environment freely available to you and anyone who wants it.
That’s not all. We also share our news for free with scores of other media organizations around the country. Many of them can’t afford to do environmental journalism of their own. We’ve built bureaus from coast to coast to report local stories, collaborate with local newsrooms and co-publish articles so that this vital work is shared as widely as possible.
Two of us launched ICN in 2007. Six years later we earned a Pulitzer Prize for National Reporting, and now we run the oldest and largest dedicated climate newsroom in the nation. We tell the story in all its complexity. We hold polluters accountable. We expose environmental injustice. We debunk misinformation. We scrutinize solutions and inspire action.
Donations from readers like you fund every aspect of what we do. If you don’t already, will you support our ongoing work, our reporting on the biggest crisis facing our planet, and help us reach even more readers in more places?
Please take a moment to make a tax-deductible donation. Every one of them makes a difference.
Thank you,
Charles Paullin
Virginia Correspondent
Charles Paullin is a Richmond, Virginia-based reporter focusing on energy and environment issues. He’s won several awards for his previous work covering state policy with the Virginia Mercury and local news with the Northern Virginia Daily in the Northern Shenandoah Valley. His first reporting gig was with the New Britain Herald in Connecticut, a couple years after attending the University of Hartford, where he first studied sports journalism.
