CURBING MONOPOLY UTILITY POLITICAL INFLUENCE

PJM REFORM

UTILITY REFORM FOR AFFORDABLE CLEAN ENERGY

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PJM Interconnection (PJM) is the country’s largest regional transmission organization (RTO), serving Virginia and all or parts of 12 other states and Washington, D.C. While utilities and energy companies own the region’s electrical facilities – like power lines and power plants – PJM  makes sure the region’s electric system operates reliably. PJM also runs wholesale markets, plans the high-voltage transmission network, and manages the queue for new generation projects. These roles give PJM power over what energy projects are built, how reliable electricity is, and how much electricity costs. PJM is a private organization, and its operational rules are set by its board and stakeholder members – mostly for-profit companies that operate in its footprint.¹

In Virginia, the State Corporation Commission (SCC) officially approves new energy generation projects. Yet PJM heavily influences what facilities can actually be built. Proposed projects must secure an interconnection agreement from PJM and pay for any upgrades needed to connect them to the regional transmission grid. Further, PJM controls the mechanisms that send economic market signals to generation developers. PJM’s rules have hamstrung clean energy deployment, with hundreds of gigawatts (GWs) of clean generation attempting, and failing, to receive an interconnection agreement.² Comparatively, PJM has fast-tracked new gas generation—including in Virginia.³ Engagement with PJM is critical to advancing a clean generation future and stopping the prioritization of additional fossil-fuel generation.

PJM is seeing rapidly surging load growth.⁴ The vast majority of this projected growth comes from large load additions – i.e., data centers – and threatens the clean energy transition, ratepayer affordability, and reliability (see ADDRESSING DATA CENTER ENERGY DEMAND).

These effects are already being felt. PJM conducts regular capacity auctions, where it secures promises from power suppliers to provide enough energy resources for the future. Rising demand has made it more difficult for PJM to meet its needs, resulting in record-high auction prices.⁵ These prices translate to higher electric bills for utility customers. For the first time ever, PJM missed its reliability target in December 2025 and July 2026⁶ – meaning there is an increased risk that PJM won’t be able to secure enough energy to meet the region’s needs. 

PJM faces pressure from the federal administration, states, and the data center industry to plug this reliability gap. It is working on several initiatives to incentivize bringing new generation online, which could lower market prices by easing energy supply constraints. Unfortunately, PJM’s design of these initiatives prioritizes fossil fuels over cleaner alternatives, including storage (see GETTING STORAGE ON THE GRID). Last year, PJM rolled out a program to let certain new generation and uprate projects connect to the electric system sooner – yet 67% of the capacity was awarded to gas generation, with 17 projects located in Virginia.⁷ A similar program would fast-track up to 10 projects annually while heavily favoring gas generation.⁸ Meanwhile, PJM has failed to review and develop interconnection agreements for roughly 285 GW of clean generation since 2020.⁹ These actions have neglected cleaner, cost-effective, and faster-to-construct alternatives while prioritizing fossil fuels.

This dynamic threatens Virginia’s climate goals. Under the 2020 Virginia Clean Economy Act (VCEA), Dominion and Appalachian Power Company can build new fossil fuel-fired generation only if they demonstrate it is necessary to maintain reliability.¹⁰ Dominion has plans for at least eight GW of new gas and argues that PJM’s reliability challenges help justify these plants. Such reliability arguments contributed to the SCC’s recent approval of the Chesterfield gas plant,¹¹ even though a mix of demand response, clean generation, and storage could have met these challenges.¹² 

Although PJM is responsible for incorporating state policy into its planning processes, it has historically deprioritized states’ affordability and clean energy goals. Recently, PJM has been more responsive to state-led initiatives to cap capacity auction costs and evaluate affordability and reliability interventions.

PJM recently announced a plan to consider sweeping changes to its processes over the next year, and has actively solicited states’ input.¹³  Virginia could seize on this moment to take a more active role in PJM. Several avenues exist to expand Virginia’s involvement: 

• Consumer Advocates of the PJM States (CAPS), a consumer advocate workgroup representing PJM’s member states, is a primary voice for state representation and affordability. With more resources, Virginia’s Attorney General’s Office Consumer Counsel Division could play an active role in CAPS and in advancing consumer interests at PJM.
• The Public Interest Environmental Organization User Group (PIEOUG), a voting stakeholder group of consumer advocates, environmental organizations, and public interest groups, currently lacks significant participation from Virginia stakeholders.¹⁴ 
• Virginia leaders can also increase their engagement through other routes, including letters and other communication with PJM leadership. PJM state legislators have begun uniting to advocate for policy priorities at PJM.¹⁵

Virginia has a seat at the table. In addition to engaging directly with PJM, decision-makers can also advance legislation to curb gas infrastructure buildout to serve data centers and to ensure PJM-related costs are fairly allocated to the responsible customers. 

¹ PJM Interconnection. (2026, April 16). Oversight and transparency [Fact sheet]. https://www.pjm.com/-/media/DotCom/about-pjm/newsroom/fact-sheets/oversight-and-transparency-fact-sheet.pdf

² Gordon, J. (2026, February 4). PJM stalled the Clean Energy Transition: Affordability and reliability depends on getting it back on track. Advanced Energy United. https://advancedenergyunited.org/blog/pjm-stalled-the-clean-energy-transition-affordability-and-reliability-depends-on-getting-it-back-on-track/

³ Howland, E. (2025, May 5). PJM fast-tracks 11.8 GW, mainly gas, to bolster power supplies. Utility Dive. https://www.utilitydive.com/news/pjm-resource-reliability-rri-gas-interconnection/747090/

‌⁴ PJM Interconnection. (2026, January 14). 2026 PJM load forecast report. https://www.pjm.com/-/media/DotCom/library/reports-notices/load-forecast/2026-load-report.pdf

‌⁵ Howland, E. (2025, July 23). “PJM capacity prices set another record with 22% jump. Utility Dive. https://www.utilitydive.com/news/pjm-interconnection-capacity-auction-prices/753798/

‌⁶ Monitoring Analytics, LLC. (2026, January 5). Analysis of the 2027/2028 RPM base residual auction: Part A. https://www.monitoringanalytics.com/reports/Reports/2026/IMM_Analysis_of_the_20272028_RPM_Base_Residual_Auction_Part_A_20260105.pdf

‌⁷ PJM Interconnection. (2025, May 6). Reliability Resource Initiative additional summaries [Presentation slides]. https://www.pjm.com/-/media/DotCom/committees-groups/committees/pc/2025/20250506/20250506-rri-addendum—post-meeting.pdf

‌⁸ ‌PJM Interconnection, L.L.C. Proposed Tariff Amendments for Expedited Interconnection Track. Docket No. ER26-1563-000. (February 27, 2026). https://www.pjm.com/pjmfiles/directory/etariff/FercDockets/9483/20260227-er26-1563-000.pdf

⁹ Gordon, J. (2026, February 4). PJM stalled the Clean Energy Transition: Affordability and reliability depends on getting it back on track. Advanced Energy United. https://advancedenergyunited.org/blog/pjm-stalled-the-clean-energy-transition-affordability-and-reliability-depends-on-getting-it-back-on-track/

¹⁰ Code of Virginia, Va. Code. Ann. § 56-585.5(B)(3)  https://law.lis.virginia.gov/vacode/title56/chapter23/section56-585.5/

¹¹ Application of Virginia Electric and Power Company for approval of certificates of public convenience and necessity to construct and operate the proposed Chesterfield Energy Reliability Center electric generation and related transmission facilities pursuant to §§56-580 D and 56-46.1 of the Code of Virginia and for approval of rate adjustment clause, designated rider CERC, under § 56-585.1 A 6 of the Code of Virginia. Case No. PUR-2025-00058, Final Order (November 25, 2025).  https://www.scc.virginia.gov/docketsearch/DOCS/89g501!.PDF

¹² Rhodes, J. & Laws, N. (2025). Alternative modeling scenarios and other considerations for Virginia Electric and Power Company’s 2024 Integrated Resource Plan. IdeaSmiths LLC. https://www.selc.org/wp-content/uploads/2025/03/Final-IdeaSmiths-Report-2024-DOM-IRP.pdf.

¹³ PJM Interconnection. (2026, May 6). Powering Reliability Through Market Design https://www.pjm.com/-/media/DotCom/library/reports-notices/special-reports/2026/20260506-powering-reliability-through-market-design.pdf

¹⁴ PJM Public Interest Environmental Organization User Group (2021, January 5) Charter. https://www.pjm.com/-/media/DotCom/committees-groups/user-groups/pieoug/postings/pieoug-charter.ashx 

¹⁵ National Caucus of Environmental Legislators. (Sept. 29, 2025). Lawmakers from 10 States Call on PJM to Accelerate Renewable Energy Deployment Amid Affordability and Capacity Concerns. http://ncelenviro.org/articles/state-legislators-call-on-pjm-to-accelerate-renewable-energy-deployment/.