The PJM Interconnection queue is moving. Now it’s up to policymakers to remove the barriers only they can fix.
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Key Takeaways:
- PJM has processed 140 GW of projects since 2023, including 46 GW with signed agreements.
- New reforms are reducing interconnection delays and accelerating capacity buildout.
- The real bottlenecks now? Permitting, siting, and political interference.
- Competitive suppliers are investing and building—but regulatory delays threaten to thwart market momentum.
🛠️ See how competitive power suppliers are getting the job done—explore new investments and infrastructure updates in our latest blog post: Electricity Markets at Work: Power Suppliers Prepare for Data Center Growth, Invest Big in America’s Energy Future
The Real Story on Interconnection
Over the past year, politicians from both parties and longstanding critics of competitive power markets have been scapegoating the PJM Interconnection as the source of nearly every problem the power sector is facing, from rising prices to delays in expanding generation capacity. We are meant to believe that competitive wholesale power markets are either incapable of or unwilling to adapt to an era of rising energy demand.
Despite the growing volume and intensity of critics, PJM has warned stakeholders for several years about the growing imbalance between electricity supply and demand, which would spur markets to do what they do best: respond.
The facts speak for themselves, as highlighted in a recent update on interconnection reform from PJM.
PJM began to evaluate reforms to its interconnection process in 2020 and transitioned to its “first-ready, first-served” framework in 2023. These reforms have resulted in PJM processing around 140 GW of projects through the interconnection queue between July 2023 to December 2024, with 46 GW representing all resource types – predominantly renewables – securing agreements to interconnect. Notably, PJM will process approximately 63 GW by the end of 2026, which completes the transition to the new interconnection process.
While implementing the “first-ready, first-served” interconnection process, because of the urgency of the situation, PJM additionally launched its Reliability Resource Initiative to provide a fast-tracked process for shovel-ready projects to maintain resource adequacy in the near term. The initiative resulted in 51 project selections with over 9,300 MW of reliable capacity that could be brought online by 2030.
So, where is all the power?
Markets Are Responding—But Can’t Finish the Job Alone
Even with these interconnection reforms, the 46 GW of projects that have been processed through the interconnection queue and secured Interconnection Service Agreements continue to be hampered by processes outside of the authority of regional transmission organizations (RTOs). These include: actually passing reforms to federal, state, and local permitting and siting processes; accelerating the deployment of new resources and retention of existing resources; reversing policies that caused premature generation retirements or blocked certain resources; and allowing markets to operate without political interference.
Policymakers Must Tackle the Real Barriers
Instead of playing the blame game and scapegoating competitive power markets, federal and state policymakers must take action to address hurdles to generation projects under their control. PJM and other RTOs will also need to continue to evolve to meet the surge in energy demand, but the recent reforms to the interconnection process show that the market can respond when given a signal.
Policymakers will also need to follow the facts and address the challenges within their control – namely permitting processes that are keeping new generation from being built, as well as the policies that are risking premature retirement of existing reliable resources.
Ohio offers an example that proactively reduces barriers to develop resources needed to power the grid. House Bill 15 makes it easier to build generation and attract investment by removing hurdles and accelerating decisions to enable faster deployment and encourage investment. This is a step in the right direction.
The results from the latest PJM capacity market auction send another strong signal to investors to build much needed generation resources, while also demonstrating the power of price signals – more capacity was added to the system for the first time in the past four auction cycles. But the market alone can’t put steel in the ground.
For the longtime opponents of competitive power markets, it will be difficult to scapegoat an interconnection problem that is largely being resolved. Instead of looking for the next issue to blame on PJM, now is the time to focus on the challenges that remain and that are within policymakers’ power to address and fix them.
See Competitive Power at Work
In the meantime, explore our latest blog posts to see how EPSA member companies are delivering solutions: deploying private capital, advancing new projects, and strengthening the grid with real steel in the ground.
