“The reliability threat is not on the future horizon,” Federal Energy Regulatory Commission Chairman (FERC) Mark Christie said last week. “It is actually here now.”

Christie, who was overseeing his last FERC meeting before departing the commission, was responding to results from PJM’s recent capacity auction—an auction that for the first time came up short in securing enough capacity to hit its reliability target. PJM operates the nation’s largest regional grid, serving 67 million households stretching from Chicago to D.C.

Capacity prices in PJM’s auction jumped 22% this year, hitting a newly implemented price cap, after jumping 800% the year before. Politico reported that this year’s capacity price was poised to reach as much as $500 per megawatt (MW)-day if not for the $329 cap. For comparison, before last year’s surge in prices, the capacity price had not exceeded $50 per MW-day in the three previous auctions.

While soaring prices are encouraging new capacity to come online – the auction fetched an additional 2,669 megawatts of power supply – the additions represent only about half the amount of new power demand PJM expects over the period the auction covers.

And this summer has made it crystal clear PJM – and the nation’s other electricity markets – desperately need more power, and they need it immediately.

Nine Alerts and Counting

Since June, PJM has issued nine level 1 energy emergency alerts, signaling deep concern over meeting rising demand. All last summer, PJM issued one such alert.

Power supplies for much of the country are being pushed to the limit. On both the PJM and Midcontinent Independent System Operator grids (MISO) – with MISO’s territory stretching from Louisiana up through Michigan –demand this week has surged past what planners projected as peaks for this summer.  

On Tuesday, demand was projected to hit 160 GW on PJM, and would have if not for mandated demand response orders from the grid operator. In May, planners assumed the summer peak would hit 154 GW. On MISO, demand eclipsed 126 GW after planners assumed a summer peak of 123 GW. Demand is also approaching near record levels in Texas and emergency actions have also been instituted in the Southwest Power Pool which covers a 14-state territory stretching up and down the plain states.

Tight operating conditions across so much of the country have underscored the false promise of using transmission as some kind of silver bullet to address the nation’s eroding grid reliability and collapsing power supply reserve margins. While neighboring grids often export power to support one another, they can only come to the rescue if power is available to transmit. Today’s reality is that many of these grids don’t have as much as a flashlight to lend their neighbors.  

The reliability challenge is only growing. Electrification of the economy, reindustrialization and the rapid addition of enormous data centers powering AI is sending power demand soaring.

Unlike its predecessor, the Trump administration recognizes the challenge at hand and is working to not only prioritize getting new dispatchable capacity into the marketplace but also keep the essential baseload capacity already on the grid operating. It’s frightening to imagine where we would be without it.

During peak demand this week, coal plants met 65 GW of demand across the PJM and MISO grids. These are the very plants the Biden administration was determined to close. As for the renewable capacity the Biden administration trumpeted as a solution, MISO’s 30 GW of installed wind capacity produced just 1 GW of power during peak demand Tuesday afternoon.