Grid operator looks to increase supply, lower prices
By: David M Zimmer
NorthJersey.com
USA Today Network - New Jersey
..... PJM Interconnection, the electric grid operator for New Jersey and 12 other states, is seeking federal approval to make it easier for smaller generation projects to join the grid.
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On October 1, [2025] PJM officials field a proposal with the Federal Energy Regulatory Commission, or FERC, for changes scheduled to take effect in April 2026 and meant to free up staff for larger projects and give developers earlier clarity on costs and requirements.
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Approval from FERC would make it easier for smaller projects to get approval, said PJM,and that would help balance supply and demand, increase reliability and possibly bring down prices.
..... PJM, which stands for
Pennsylvania, Jersey, Maryland, coordinates how electricity is moved while managing power supply to 65 million people in 13 states and the District of Columbia. It operates the electric grid, develops market rules, coordinates the power flow and plan large-scale projects.
..... At the center of the proposal is the elimination of "first use." The rule, a legal threshold cerated by FERC in 2003, imposed federal interconnection requirements for certain distribution-level projects, even some small ones. Rather than following state or local rules, these projects currently must go through PJM's full interconnection process and obtain a Generation Interconnection Agreement under FERC oversight.
..... PJM's proposal would allow distribution-level projects instead to follow state and local procedures and secure a Wholesale Market Participation Agreement to sell into PJM's markets. PJM officials said 12% to 15% of past projects would have qualified for state or local review under this approach.
..... Another regional grid operator ISO New England, took a similar step in 2022, eliminating "first use" for its footprint. Federal regulators approved the change, citing efficiency gains and benefits to market competition.
..... PJM's proposal comes as it faces record electricity demand. IN June, [2025] the grid hit a peak of 160 gigawatts, its records show, with data center growth acting as a primary driver of recent demand gains, according to an analysis by the Regional Plan Association.
..... An October [2025] report from PJM's Independent Market Monitor found that power plant retirements are tightening supply, but it primarily blamed surging data centers demand for driving prices sharply higher. The report analyzing the 206/2027 Base Residual Auction showed that including roughly 12,000 megawatts of existing and forecast data center load in the 2026 peak forecast raised auction revenues by $7.3 billion compared with a scenario without that load.
..... To alleviate the issue, the report recommended that new data centers should bring their own generation, and PJM should reconsider the use of minimum prices in auctions.
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PJM officials said the reforms along would not clear the considerable backlog of generation projects in the region. However, they said it would help advance a larger effort to reduce bottlenecks and accelerate projects needed to stabilize costs and reliability.