PA Environment Digest Blog: PUC Electric Power Outlook: Risks To Adequate Electricity Supplies May Emerge In PJM By 2033; Extreme Cold Constraints On Natural Gas Availability Could Risk Outages As Early As 2026

On September 12, the Public Utility Commission released its 2025 Electric Power Outlook Report, providing an overview of projected electricity demand and system reliability across the Commonwealth and the broader region.

According to the report, a North American Electric Reliability Corporation analysis "concluded that PJM [regional grid] will have enough generation capacity to meet its reserve margin requirements through 2033 provided planned generation and transmission projects will be forthcoming in a timely manner."

However, the report also quotes NERC as saying, "there is potential for resource adequacy risks to emerge in PJM in 2033 and beyond and for operational risks to manifest as early as 2026, given certain scenarios, e.g., an extreme cold snap combined with constraints on natural gas availability.”

The PUC report says "longer-term forecasts highlight the need to carefully balance new generation and transmission projects with the pace of power plant retirements.

The report notes that Pennsylvania’s electricity usage grew nearly 3% in 2024, with significant industrial demand growth projected over the next five years — driven in large part by new large-load customers such as A.I. data centers.

While these developments offer economic opportunities, they also pose challenges for forecasting, system operations, and long-term reliability planning, the PUC report says.

“Pennsylvania is at the center of a generational shift in how we produce and use electricity,” said PUC Chairman Stephen M. DeFrank. “Our annual power outlook underscores both the opportunities and the challenges of this transition — from data centers and electric vehicles to new storage and renewable resources.

“The Commission remains focused on ensuring that this transition strengthens reliability and affordability for consumers while supporting the growth and innovation shaping our energy future.”

Emerging Issues and Trends

Emerging national and regional trends identified in the report include:

-- Rapid growth of large-load facilities, such as data centers, manufacturing, and hydrogen production.

-- Increased adoption of electric vehicles, which requires planning for changing load patterns.

-- Greater reliance on battery storage systems to balance variable resources like wind and solar.

-- Potential “energy droughts” caused by extended periods of below-normal wind, solar, or hydro output.

-- Ongoing shifts in the resource mix, with more renewable generation coming online while conventional plants retire.

NERC has recommended stronger coordination among policymakers, regulators, utilities, and system operators to ensure essential reliability services are maintained and to address barriers to new transmission and resource development.

PJM has taken several steps to try and address the issues and risks noted by NERC in terms of adding generation capacity, such as the PJM Reliability Resource Initiative (RRI).

The RRI is a one-time opportunity for shovel-ready resources that can come online quickly and most effectively contribute to reliability.

The PUC continues to evaluate these issues through a technical conference and en banc hearing on large-load issues, with ongoing efforts to develop policies — including a model tariff for large-load interconnections — to help manage future challenges while protecting consumers.

Pennsylvania’s Electric Infrastructure

Here are some basic facts about Pennsylvania's electric infrastructure from the report--

-- Generating Capacity: Existing Capacity: Generating capacity in 2024 for Pennsylvania totaled 45,096 MW as compared to: 44,889 MW in 2023; 46,977 MW in 2022; 47,633 MW in 2021; 46,941 MW in 2020; and 44,705 MW in 2019.

-- Fuel Mix: Natural gas represents approximately 55% of the total installed capacity in Pennsylvania service territory while coal represents approximately 13% and nuclear, 20%. In terms of actual electrical generation in 2024 for Pennsylvania, natural gas generated 61% of the load, coal 5% and nuclear 33%.

-- Interconnection Requests: Interconnection Requests: Solar represents 49% of new interconnection requests in Pennsylvania, and storage represents 21%, while natural gas represents 2.5% of new requests.

-- Deactivations: 2 MW in Pennsylvania gave notification of deactivation in future years, as compared to: 1,937 MW in 2023, 832 MW in 2022; 920.8 MW in 2021; 78.3 MW in 2020; and 976.2 MW in 2019.

-- Regional Transmission Expansion Plan (RTEP) 2024: Pennsylvania’s 2024 RTEP project total represents approximately $1.64 billion in investment, as compared to Pennsylvania’s 2023 RTEP projects that totaled $898.47 million.

-- Load Forecast: Depending on the transmission zone, Pennsylvania’s summer peak load growth is projected to range between 0.1% and 5.9% annually over the next ten years, while the winter peak load growth is projected to range between 0.1% and 5.8% annually over the next ten years. PPL’s 10-year annual load growth is projected as 5.9% for summer and 5.8% for winter, which is the highest of all the transmission zones that serve Pennsylvania.

-- 2026/27 Capacity Market: Pennsylvania’s service territory cleared at the RTO clearing price, $329.17/MW-day, for the 2026/2027 Base Residual Auction for the entire PJM footprint. This includes the BGE zone in Maryland and the Dominion zones in Virginia and North Carolina.

-- 2025/26 Capacity Market: Pennsylvania’s service territory cleared at the RTO clearing price, $269.92/MW-day. The BGE zone in Maryland and the Dominion zones in Virginia and North Carolina cleared at $466.35/MW-day and $444.26/MW-day, respectively. The higher prices for those zones were due to insufficient resources inside those regions and constraints on the transmission system that limit the ability to import capacity.

-- Carbon Emissions Increase: Pennsylvania’s average CO2 emissions increased in 2024 compared to 2023 levels.

Winter Natural Gas Challenges

PJM noted that it performed adequately in maintaining system reliability for Winter 2024/25, which included a period of extreme cold weather and several named winter storms from Jan. 3 to Jan. 24, 2025.

In order to handle the 145,060 MW instantaneous record peak load on Jan. 22, 2025, PJM Operations reported the following key takeaways--

Successes:

-- Sufficient reserves to serve all-time winter peak load and exports.

-- Effective PJM Emergency Procedures were limited to advisories and alerts.

-- Strong generator and transmission performance.

-- Accurate load forecasting.

Challenges:

-- Gas-Electric market coordination and the need for multiple-day gas commitments during long holiday weekends.

-- Inflexible gas nominations and ratable take requirements reducing generator dispatch flexibility.

- Operational risk is not reflected in markets

-- Future resource adequacy concerns (increasing load / decreasing transfer margins).

The Report

The Commission’s Electric Power Outlook Reports are submitted annually to the Governor, General Assembly, Office of Consumer Advocate, and affected utilities, as required by state law.

The report, prepared by the PUC’s Bureau of Technical Utility Services, summarizes data submitted by Pennsylvania’s electric distribution companies (EDCs) and incorporates regional assessments from the regional transmission organization that manages the bulk electric system for Pennsylvania, PJM Interconnection, LLC (PJM), and the North American Electric Reliability Corporation (NERC).

The full 2025 report, along with similar reports issued over the past 20 years, are available on the PUC website.

Click Here for the PUC announcement.

Resource Link:

PUC Chairman: Model Tariff For Connecting A.I. Data Centers To Local Electric Grid To Be Published For Comment By End Of September [Lots More Resource Links]

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - Sept. 6 to 12 - Disposing Of 4.6 Million Gallons Of Oil & Gas Wastewater; 18,000 Gallon Drilling Spill; Failure To Restore Pipeline Right-Of-Way - Again [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - September 13 [PaEN]

-- DEP Posted 82 Pages Of Permit-Related Notices In September 13 PA Bulletin [PaEN]