# PJM Interconnection The largest [[Regional Transmission Organization]] in North America, operating the transmission grid and wholesale markets across all or part of thirteen states and the District of Columbia, serving roughly 65 million people. Founded in 1927 as a power pool among Pennsylvania, New Jersey and Maryland utilities — the initials are vestigial — and restructured as an independent operator in the late 1990s. PJM matters to this vault for one reason: **it is where the AI buildout collided with the grid first and hardest.** FERC's June 2026 show-cause order is reported to note PJM's own expectation that it will host as much as **70% of future data centers built in the United States**. > [!caution] Single-source figure > That 70% figure traces to one law-firm summary of the show-cause order and could not be corroborated independently in trade press, PJM load forecasts, or FERC fact sheets. It is also easily confused with two unrelated statistics in circulation — PJM's projection of up to 70 GW of large-load growth by 2038, and the frequently repeated claim that Northern Virginia carries roughly 70% of global internet traffic. Treat it as PJM's expectation reported at one remove, not as an established federal estimate, until the order text is read directly. ## The capacity market and the price shock PJM runs a Base Residual Auction that procures a commitment of capacity for a delivery year roughly three years ahead. The clearing price is paid to every cleared resource and passed through to load. See [[Capacity Market]] for the mechanism. | Delivery year | Clearing price (RTO-wide) | Results announced | |---|---|---| | 2024/2025 | $28.92/MW-day | — | | 2025/2026 | $269.92/MW-day | 2024-07-30 | | 2026/2027 | $329.17/MW-day | 2025-07-22 | | 2027/2028 | $333.44/MW-day (at cap) | 2025-12-17 | | 2028/2029 | $325/MW-day (at cap) | 2026-07-14 | An eleven-fold increase across two delivery years. PJM's Independent Market Monitor attributed **$6.3 billion of the $16.4 billion** cost of the 2028/2029 auction to data center load, and across the last four base auctions calculated data-center-driven capacity charges of **$29.4 billion out of $63.6 billion — 46% of the total.** Pennsylvania cited that figure in the recitals of its own August 2026 executive order. > [!warning] The price cap is itself a cost-allocation decision > The 2027/28 and 2028/29 auctions cleared **at** a FERC-approved price collar, not at an unconstrained market price. PJM estimated that without the collar the 2028/2029 auction would have cleared at **$554.72/MW-day** for a total near **$30 billion**, against the $16.4 billion actually charged. FERC accepted an extension of the collar in April 2026 running through the 2029/2030 delivery-year auction. > > A price cap does not make the underlying scarcity go away. It moves the consequence from a price to a quantity — which is exactly what happened next. ## The shortfall and the backstop The 2028/2029 auction procured 138,318 MW and came in **6,831 MW short** of the reliability requirement, clearing at a 14.4% installed reserve margin against a 20% target. On 2026-07-31 PJM filed a one-time **Reliability Backstop Procurement** auction at FERC in **Docket ER26-3380**: a bid window running **September 30 to October 21, 2026**, results by **December 2, 2026**, fifteen-year commitments, and a price cap of **$555/MW-day** — effectively the uncapped clearing price the collar had suppressed. NRDC estimated the exposure at up to **$20 billion**. Resources must be in service by June 1, 2032. The sequence is worth stating plainly: cap the price in the base auction, discover a physical shortfall, then hold a second auction at the price the cap suppressed. ## Interim Resource Adequacy Service and the Large Load Registry PJM's companion proposal addresses the demand side. A **Large Load** is defined as cumulative peak demand of **50 MW or more** at a single electrical site, and such loads go on a mandatory registry. From **June 1, 2027**, new large loads that have not brought their own supply become **first in line for curtailment** — cut off *before* pre-emergency demand response reaches other customers. The escape hatch is **"bring your own new capacity" (BYONC)**: a load-serving entity can designate qualifying new generation, uprates, surplus interconnection service, repowered resources, storage or qualifying demand resources equal to or greater than the load's peak, and only the uncovered portion stays curtailable. Because states, not PJM, decide which customers connect to state-regulated utilities, enforcement lands on state commissions and utilities — see [[Public Utility Commission]] and [[Large Load Tariff]]. ## Load growth against retirements PJM has reported peak load growth of roughly **30 GW through 2030 from data centers**, and its own filings state that data center and other large-load demand could grow by **up to 70 GW by 2038**. Against that, generation has been retiring. The exact retirement total since 2022 is not cleanly established in the sources reviewed here and should not be asserted without a primary figure. ## Emergency authority On 2026-05-18, one day after a PJM application, Energy Secretary [[Chris Wright]] issued Order No. 202-26-23 under Section 202(c) of the [[Federal Power Act]], authorizing PJM to direct large loads at or above 50 MW that hold their own backup generation to switch to it within 15 minutes of an emergency signal. See [[Federal Power Act]]. ## Why PJM is the case study Every mechanism in the who-pays-for-the-grid argument is visible here in one jurisdiction and one three-year window: a capacity price that rose eleven-fold, a market monitor willing to attribute the rise, a price cap that converted cost into scarcity, a shortfall that produced a second auction at double the cap, a curtailment regime that ranks customers, and an enforcement design that hands the decisive choice back to the states. Anyone who understands PJM in 2026 can read the other five RTOs. ## See Also - [[Capacity Market]] — the auction mechanism - [[Large Load Tariff]] — the state-level instrument PJM's design depends on - [[Federal Energy Regulatory Commission]] — the regulator whose approval every element requires - [[The Quest for 90 Gigawatts]] — the rolling news log