PJM Warns Electricity Demand Is Growing Faster Than New Power Supply
VALLEY FORGE, Pa. — The organization responsible for keeping electricity flowing across Ohio and 12 other states says demand for power is continuing to grow faster than new power plants are being added to the grid, creating a tighter margin for maintaining reliable service in the years ahead.
PJM Interconnection, which manages the electric grid serving more than 67 million people, announced Tuesday that it has secured enough electricity generation to meet most of the region's expected needs during the 2028-2029 planning year. However, officials say the grid still falls short of its long-term reliability target.
In simple terms, PJM says there should be more backup power available than it currently has. While that does not mean blackouts are expected, it does mean there is less extra electricity available if extreme weather, equipment failures, or unusually high demand occur.
The company said it secured about 149,000 megawatts of electricity-generating capacity, but that remains roughly 6,800 megawatts short of the reserve level engineers consider ideal for maintaining the highest level of reliability.
"This auction results show that demand for electricity continues to grow faster than electricity supply," PJM President and CEO David Mills said. "At the same time, PJM recognizes how this supply-and-demand imbalance impacts the reliability of the system and costs for consumers. We are working with government and industry leaders on multiple fronts to restore that balance by bringing on new generation as fast as possible and managing the growth of new load on the grid."
Why electricity demand is rising
PJM says one of the biggest reasons electricity demand is climbing is the rapid construction of large data centers.
Data centers are massive buildings filled with computer servers that power cloud computing, artificial intelligence, internet services, and online storage. Those facilities can consume as much electricity as a small city, and many new projects have been announced across the PJM region, including in Ohio.
PJM said those new facilities are becoming a larger part of its long-term forecasts.
What this means for customers
The announcement does not mean customers should expect rolling blackouts or immediate reliability problems.
Instead, it means the electric grid will have less cushion than planners would like if several problems happen at the same time—such as a prolonged heat wave, extremely cold weather, or multiple power plants unexpectedly going offline.
To reduce that risk, PJM plans to seek federal approval later this year to purchase additional backup electricity supplies.
Capacity prices remain high
PJM also announced the price paid to power generators through its annual capacity auction reached $325 per megawatt per day, the maximum price allowed under a temporary cap approved by federal regulators. While that price is about 2.5% lower than last year's auction, it remains historically high.
Natural gas remains the largest power source
Natural gas continues to provide nearly half of the electricity capacity committed to PJM's system.
The current mix includes:
46% natural gas
20% nuclear power
18% coal
5% demand-response programs, where customers agree to reduce electricity use during peak demand
4% hydroelectric power
2% wind
2% oil
1% solar
PJM said natural gas generation increased from last year's auction, while coal capacity continued to decline because of plant retirements and conversions to natural gas.
The grid operator says it will continue working with state governments, utilities, and federal regulators to add new power supplies and ensure electricity production keeps pace with growing demand.
