PJM to ease strain from rising demand
Emergency measures to manage electric grid
By: David M. Zimmer
NorthJersey.com
USA Today Network - New Jersey
..... Regional electric grid operator PJM Interconnection approved a set of emergency measures in mid-January [2026] to manage the rapid growth of data centers and other large electricity users in an effort to shield New Jersey households and small businesses from rising electricity costs.
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In a statement PJM's board said the regional power grid is under growing strain and that changes are needed to maintain reliability while keeping costs predictable.
..... The announcement came on January 16, [2026] the same day a coalition of governors met at the White House to demand reforms aimed at protecting residents and making sure data centers pay their share of infrastructures costs.
..... Former New Jersey Governor Phil Murphy and Maryland Governor Wes Moore were part of the coalition pushing for faster approval of new power generation and shorter timelines for connecting it to the grid.
..... PJM Interconnection (Pennsylvania-New Jersey-Maryland) is the larges regional transmission organization in the country.
..... New Jersey Governor Mikie Sherrill, who took office on January 20, [2026] welcomed the effort and said rising electric bills are the top concern she hears from voters. Sherrill release a statement backing measures to limit price spikes and ensure that large energy users cover the cost of the new generator they require, while cautioning that the details and timing matter.
..... Sherrill started in the first minutes of her term on January 20, [2026] with two orders designed to rein in the cost of electricity for New Jerseyans, which increased by double-digit percentage points in June 2025.
..... Her first executive order will use "state authority to offset upcoming rate incarcerates due to the regional gird operator PJM's mismanagement and held utilities accountable for keeping rates from continuing to climb at an unsustainable rate."
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The order will use existing funds to offset the electricity bill increases coming in June, [2026] said a statement from the governor's office on January 20. [2026]
..... The order will also empower the Board of Public Utilities to pause or modify utility actions hat could further increase bills. It directs the BPU to review utility business models to ensure alignment with delivering cost reductions to ratepayers.
..... Officials from PJM, which manages the wholesale power market for 67 million people across 13 states and Washington D. C., said its strategies will focus on new customers that use 50 megawatts or more at a single site, or roughly enough to power a small city.
..... Projects that add their own generation, such as on-site solar or battery storage, will benefit from an accelerated interconnection track that allows new power to reach the grid more quickly, PJM records show. Projects that do not bring new generations can still connect user a "Connect and manage" framework. However, during period of grid stress, those facilities may be required to reduce electricity sue or switch to backup generators before emergency measures affect homes and small businesses.
..... "this is not about stopping data centers," said David Mills, PJM interim president and CEO. "It is about managing growth while keeping the system reliable and affordable.
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A January 16 [2026] statement from PJM said it is taking steps to prevent rising electricity costs in New Jersey as demand from large data centers and other industrial users continues to climb, which secures future power supply, fell 5.6% short of the reserve margin needed to maintain reliability. That shortfall, combined with rapidly growing demand has pushed wholesale electricity prices higher.
..... To avoid immediate problems, PJM plans to speed up a backstop process that allows new power to come Online if reliability targets cannot be met through normal market mechanisms. PJM said the measure are temporary and intended to keep the system stable while longer-term solutions move forward.
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The plan also includes improved forecasting of electricity demand, with increase oversight from states and third-party reviewers. PJM said it needs better visibility into where large new user plan to connect and how those projects may strain the grid. The operator will also review its energy and capacity markets in the first half of 2026 to determine whether current rules encourage developers to build new power quickly enough. Stakeholders will be asked whether capacity price caps used in recent auctions should be extended.
..... Sherrill said in a January 16 [2026] statement that the principles of the governors' coalitions good starting point, but she warned that speed and follow-through are essential.
..... She supported a proposed cap on capacity prices and said large data centers should pay for the addition generation their operations require. She also said she plans to push for festered development of in-state power and lower utility costs, part of what she has described as a "Jersey energy arsenal" to cut red tape and accelerate delivery of cheaper power.
..... "This is about protecting residents form an endless cycle of mismanagement and rising costs," Sherill said. "Details mater, and we will work with other governors to make sure reforms at PJM actually benefit ratepayers."
..... PJM said the framework will be adjusted as conditions change. Facilities operating under the Connect and Manage program would be required to reduce power sue only during rare emergencies that threaten service to homes or small businesses. Transmission owners and utilities would determine which facilities are affected, with advance notice provided.
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In tis statement, PJM's board also pointed to state-led efforts to speed up new power generations. Although PJM cannot directly build those projects, cooperation among states, utilities and the data center industry was described as criticla to preventing electiricty costs from spiking as madman continues to grow in New Jersey.