Takeaways From Hearing
Some key takeaways from the hearing--
-- Risks To Grid Reliability Are Increasing Sooner, More Frequently Even In Moderate Conditions: Diane Holder, ReliabilityFirst - North American Electric Reliability Corp., said this year's Long-Term Reliability Assessment shows projected risk to grid reliability is higher and emerging sooner-- 2029 instead of in the early 2030s.
They are seeing more frequent reliance on operator actions and emergency procedures to maintain reliability-- like energy emergency alerts or EEAs issued by grid operators when operating reserves fall below established thresholds.
While the grid has made measurable improvements in coping with extreme weather, this past January during Winter Storm Fern, the system again operated with very little margin for error.
A diverse mix of generation resources-- an all of the above approach-- is essential to maintain grid reliability and to keep the system stable.
-- PJM Attracted New Generation To More Than Double Current Capacity: PJM said an application round just closed on April 27 to join the Interconnection Queue attracted 220 gigawatts of new generation capacity from 811 proposed projects in its service area. PJM now has a total of about 160 gigawatts of generation on its system.
The proposals broken down by generation technology include: natural gas-102 gigawatts; nuclear- 18 gigawatts; solar- 10 gigawatts; solar plus storage- 8 gigawatts; storage alone-- 66 gigawatts; and wind- 5 gigawatts.
-- PJM’s ‘Backstop’ Procurement Initiative Critical To Having Data Centers Pay For New Generation: PJM is currently designing a reliability backstop procurement in order to plug the gap in its reserve margin and procure additional generation to allow for the “bring your own new data center generation” and to prevent the need for curtailments.
Glen Thomas, GT Power Group and former PA PUC Chair, said the cost of new generation has increased significantly and the PJM backstop procurement process that will put these higher costs on the backs of data centers is critical to PJM's ultimate success.
-- Existing Generation Resources Should Not Be Dedicated To Data Centers: Andy Tubbs, PA Energy Association representing electric utilities said “new” generation brought by data centers should not be existing generation resources.
“If you have existing generation that's currently in the market, you don't want those generation units pulled off the PJM market and dedicated just for large customers because that just sort of exacerbates the market issue.”
Glen Thomas, GT Power Group, added “It's really critically important that we keep what we have on [the grid] too and not see retirements and not see pricing signals that drive units out of the market that we still very much need.
“So it's at the end of the day, a really careful balancing act, but yeah, we absolutely have to add new, but preserving the existing fleet needs to be a priority as well.”
[Note: The independent PJM Market Monitor has also opposed actions that would lock-in existing generation to feed data centers because it would threaten grid reliability. Read more here.]
-- PA Public Utility Commission May Act On Model Tariff For Large Loads This Week: PUC Chairman Steve DeFrank told the Committee the PUC may act to finalize its voluntary model tariff for large loads at its meeting on Thursday of this week.
Summary Of Testimony
Here is a summary of just some of the discussion at the Senate hearing.
Diane Holder, ReliabilityFirst - North American Electric Reliability Corp, told the Committee-- “I looked back and saw that the first time I testified for this Committee was in 2023.
“At that time, we were talking about Winter Storm Elliot and resource adequacy challenges long before load growth had even entered the conversation.
“I'm afraid I don't have better news today.
“In fact, many of the trends that we saw then have continued and in some cases accelerated. That is despite the very good work and efforts that are underway here in Pennsylvania.”
Click Here for written testimony.
Risk Is Higher, Emerging Sooner
“When comparing last year's Long -Term Reliability Assessment (LTRA) to this year's, we see that the magnitude of the projected risk is higher and it is emerging sooner.
“In this year's assessment, the risk begins to emerge around 2029 compared to last year's assessment where it emerged in the early 2030s.
“This is not a prediction that there will be an outage in 2029, but it may indicate that conditions are worsening.
“And more broadly, across the past several assessments, we have seen a consistent trend of increasing risk and tightening reserve margins across multiple regions, including PJM.”
“Under the more conservative scenarios, we see shortfalls beginning around 2029, and the more optimistic ones, shortfalls are not projected in the near term.
“However, those scenarios would require significant amounts of new generation to be built on aggressive timelines at a level we have not yet observed.”
Seeing Higher Risks In Real Time
“I can tell you we are seeing things in real time operations that begin to align with the projections, and they could be early indications of those approaching high risk years like 2022.
“We're seeing these operational indications emerge in a few different ways.
“First, we're seeing more frequent reliance on operator actions and emergency procedures to maintain reliability.
“Energy emergency alerts or EEAs are alerts issued by grid operators when operating reserves fall below established thresholds.
“We are seeing an increase in the number of hours the system spends under those alerts.
“This means we're spending more time operating under tight reserve margins.
“In other words, this data may suggest the system is operating closer to the edge more frequently.”
Extreme Weather - Little Room For Error
“We are also seeing some potential indications related to system performance during extreme weather.
“It is important to note that since Winter Storm Elliot, the industry has made measurable progress, particularly in generator winter performance, reinforced by new reliability standards.
“However, even with that progress this past January during Winter Storm Fern, the system again operated with very little margin for error.
“And while generator outages were lower than during Elliot, they were not zero.
“And with the projected high demand and tight reserve margins, PJM had to take additional actions, including committing resources in advance, operating more conservatively, taking steps to ensure fuel availability, and at times operating under emergency 202C authority.
“And while those actions were effective, they highlight that the underlying risk may still be evolving.
“And during events like Fern that occur under those extreme conditions, tight margins can surface quickly, but we're also seeing events during what we call shoulder months, such as spring and fall, as well as during other non-extreme conditions, where typically and historically we haven't expected significant reliability challenges.”
Sudden Load Shedding
“For example, events like the Baltimore load shed event last August [when data centers suddenly left the grid to go on their own power], as well as an event in Louisiana in May, they both occurred under conditions that were not considered extreme, yet still required operator actions to maintain reliability.
“So we're watching these types of events as they may also be a leading indicator of those high risk times.
Moderate Conditions Now Causing Problems
“If these events begin to trend, it could mean we are moving from a system where typically only extreme conditions created reliability challenges to one in which more moderate conditions can cause trouble as well.”
“At RF and NERC, of course, we focus specifically on the reliability component, and from that perspective, our role is to help inform on what attributes the system needs to ensure reliability.”
Need Diverse Resource Mix
“That includes ensuring the system can support demand around the clock in all weather conditions supported by a diverse resource mix with essential reliability services that help keep the system stable.
“Those features of a reliable resource mix are important to keep in mind.
“In terms of the resource mix, I know there are a variety of solutions being talked about, including different types of generation, plus storage such as batteries and even demand side solutions such as load flexibility and demand response.
“And it's important to understand the benefits and limitations of each one.
“So for example, some things to consider include availability. Is that resource or solution in the right place? Is it there during critical hours? Dependability, how does it perform under different weather conditions?
“What drives its response? Is it from the operator, from price signals, from weather, from customer participation?
“Third, how does it perform under extreme and challenging conditions?
“And fourth, does it provide those essential reliability services needed to maintain system stability?
“I think what those questions highlight is that no single solution meets all of the needs on its own and that resources are most effective when they're matched to the locations and conditions where they perform best.”
Real All Of The Above Approach
“That's why NERC and the regions often describe the need for an all of the above approach.
“Not that any resource works anywhere, but all of the above in terms of strategically using the right combination of resources, infrastructure, and technologies to meet system needs with solutions tailored to match those needs.
“This requires careful planning analysis and pairing technologies in some cases to maximize their effectiveness.
“In closing, I want to say that the challenges we're seeing, they're not hypothetical. They are already beginning to show up in operations.
“The assessments help us see where things are going, the events and other observations we're learning from them.
“We're seeing how these risks are actually materializing in the hope that we can mitigate them.
“And together, they do point to that need for a continued focus on reliability as the system continues to evolve.”
Stephen Bennett, Senior Manager for Regulatory & Legislative Affairs, PJM, told the Committee-- “Governor Shapiro has made it abundantly clear that he sees data center development in Pennsylvania as a high priority.
“The communications that we received from him directly and indirectly reinforced that on a regular basis.
“In fact, Governor Shapiro was one of every governor in our footprint that also joined with President Trump to make sure that PJM understood the priority of building data centers and building them quickly.
“They issued a statement of principles and PJM's response, you see before you.
“We are looking at a number of efforts in an attempt to meet the moment, to meet the speed to market imperative, to meet the commercial and job development imperative that has been clearly communicated to us from the White House and from the Governor's mansion.”
Click Here for PJM presentation slides.
Bring Your Own Generation
“PJM seeks to create a limited expedition track, interconnection track that would allow for a small number of highly accredited generation projects to be studied in a 10 month timeframe.
“And just as a comparison in our new connection queue, that timeframe is usually about 18 months. So we would go from 18 months to 10 months to study these particular projects.
“For those data centers that aren't able to bring their own generation or contracts for generation, we're looking at curtailment opportunities and ways to make sure that if we are in a position where the grid requires load shed or curtailment, that is the data centers that have not brought new generation rather than regular customers that might be the first in line to curtail their operations.”
Reliability Backstop Procurement
“We are currently designing a reliability backstop procurement in order to plug the gap in the reserve margin and procure additional generation to allow for the bring your own new [data center] generation and to prevent the need for curtailment.”
Load Forecasting Reforms
“Load forecasts are the basis of so much of the infrastructure that's built in PJM and the costs that then accrue to our customers.
“So we need to make sure both at the PJM level and in partnership with our transmission owner stakeholders as well as policymakers, that the load forecasts are as accurate as possible and as precise as possible.”
Market Price Cap/Floor Extension
“PJM's also looking to study our entire market structure. We recognize that the successes that we've had in the past are not an indication that we will continue to be successful going forward.
“So we are taking a soup to nuts A to Z review of our market structures to make sure that we have the appropriate incentives to bring on new supply.”
“Pending at FERC [Federal Energy Regulatory Commission], we have a proposal to continue the capacity market price cap and floor that's been in place since the settlement with Governor Shapiro.”
Interconnection Queue
“For a number of years, PJM was challenged by the Interconnection Queue. A large number of projects coming to us for interconnection was a mismatch with the design of the queue itself.
“We have now almost moved through the entire transition period necessary to work through the backlog that was created during the mismatch of design and reality.”
“We have about 57 gigawatts of projects that have moved through the transition cycle and have agreements and are able to move forward to construction and interconnection.”
220 Gigawatts Of New Power
“PJM closed our first post-transition, newly reformed Interconnection Queue cycle last night. You are the first to hear this information outside of PJM.
“The number of projects submitted to cycle one-- 811 projects seeking interconnection to the PJM Queue.
“The amount of energy represented by those projects, roughly 220 gigawatts, the amount of capacity, approximately 211 gigawatts.”
[PJM now has a total of 160 gigawatts of generation online in its service region.]
“Broken down by generation technology, capacity, natural gas-102 gigawatts; nuclear- 18 gigawatts; solar- 10 gigawatts; solar plus storage- 8 gigawatts; storage alone-- 66 gigawatts; and wind- 5 gigawatts.
“Now these are preliminary numbers. There may be some small modifications, but generally this is what we're seeing, the interest in investment in generation in PJM.
“State by state breakdowns will take us a few weeks, but that will be available as well.
“The phase one study of this cycle one will be done in November of 2026, and that's going to be the first inflection point where we see how much of this proposed generation will move on to the next phase.”
Steve DeFrank, Chairman PA Public Utility Commission, raised points of concern about electric generation, energy affordability issues, load forecasting and other issues he has discussed several times before the General Assembly.
“For nearly two decades, PJM Interconnection has been in the period of flat growth and low capacity prices.
“After a final round of large natural gas [power] plant development more than a decade ago, the overall market signal was to deactivate old and expensive to maintain plants.
“Paired with regulatory headwinds, the PJM region experienced a wave of retirements that have led to reduced available nameplate capacity.
“Now, with the sudden surge of demand from data centers, advanced manufacturing facilities and other large load customers, both prices and concerns about grid reliability are rising.”
Click Here for Chairman DeFrank's written testimony.
All Of The Above Solutions
“When it comes to resource accuracy concerns, I've long encouraged the use of all means to address the issue. That means adding new generation to our supply stack as well as demand side management.”
“Pennsylvania can facilitate new [electric] generation of both small and large scales.”
“The Commission recently received a grant from the federal government to study our existing transmission system and look for sites around retired plants, for example, that would be able to host new natural gas plants with minimal upgrades to the transmission system.”
Natural Gas Supply Chain Delays
He did point out a significant concern about the build out of any natural gas generation.
“There are only three major companies in the world that manufacture [electric generation] gas turbines-- GE, Siemens, and Mitsubishi.
“It is important to remember that in addition to ordinary economic growth in places like China and India and the increased electric demand that goes with it, the massive expansion and data center demand is happening worldwide.
“In some, turbine manufacturing timeframes may not match the pace of surging electric demand. As a result, the supply chain for gas turbines has become extremely tight.
“This is another major bottleneck constraining the addition of new generation to our power system.
“And lastly, even developers with sites and turbines prepared may have trouble securing natural gas.
“Pipeline capacity is another constraint in the system exacerbating the other challenges we face in bolstering the supply of new megawatts of the grid.”
Demand Side Management
“The other means to address resource adequacy concerns is demand side management.
“Maximizing the effectiveness of energy efficiency and conservation plans established by Act 129 and demand response can avoid the need for turning on or building in the first place a new peaking unit.
“With system conditions as tight as they are and prices as high as they are, we have to use every tool in the toolbox at our disposal.”
Data Centers First To Curtail Power Use
“The PUC was a vocal advocate for PJM's concept of non-capacity back load, which would have put data centers and other large load customers first in line for curtailment at times the grid was stressed.
“Essentially, any new large load customer that did not bring its own generation to the grid at the time of interconnection will be subject to curtailment prior to any other customers on the PJM grid.
“Though that proposal was not adopted, my view at the time was that it would both increase new large loads to bring their own watts to the grid and insulate traditional ratepayers or our existing rate payers from reliability issues that may be caused by large load customers.”
Load Forcasting
“The Commission recognized the importance of load forecasting initiative request for proposals last year to engage a consultant.
“Our statement of work included performing a load forecast for Pennsylvania in the remainder of the PJM region while assisting the PUC and rebuilding its own internal load forecasting capabilities.
“Making load forecasts as accurate as possible has never been more important as it is today.
“The General Assembly recognized that fact when it included electricity load forecast accountability in Act 45 of last year.”
Glen Thomas, GT Power Group and former PA PUC Chair, questioned whether extending the current price cap and floor at PJM will provide enough incentive to power generators to build new plants for data centers.
“I think the answer to that is no.”
“In terms of the generation rates, the [PJM] capacity auction prices were capped from 2026 to 2028.
“If FERC [Federal Energy Regulatory Commission] approves this new cap will be extended till 2030 [which might be today].
“So any changes in the generation portion of [a ratepayer’s] bill will be on the energy side.”
Electricity Price Dependent On Price Of Natural Gas
“And I think as you all know, that's really dependent on the wholesale price of natural gas, which is impacted by things well outside of your control, no offense.
“I mean, this is wars, this is other things, hurricanes that really move those prices. So at least from the generation side, and this is starting to bear itself out.”
“So generation should be flattening out here.
“The question is, can you build an incentive for new generation with prices that are capped? I think the answer to that is no.”
New Generation More Expensive
“The new [electric] generation is more expensive and at least there's an expectation politically that the data centers are going to be paying for that new generation.”
“And that's why this [PJM] reliability backstop [initiative] that's going to put these higher cost units on the backs of the data centers is so critical to PJM's ultimate success.”
Locking In Permit Standards
Thomas also suggested the concept of locking in environmental and other standards for new power generation for the lift of their initial investment-- 25 to 30 years.
“If you were a generator looking to develop, particularly a large base load facility, your investment horizon's probably in the 25 to 30 year timeframe. And regulatory risk that your obligations could change during the course of that 25 to 30 year commitment is significant.”
“Being able to say at the beginning of your permit, here's what you are going to be expected to comply with could be a real boost to anybody looking to invest in PA.”
Click Here for a video of the hearing and written testimony.
Sen. Gene Yaw (R-Lycoming) serves as Majority Chair of the Senate Environmental Resources & Energy Committee and can be contacted by calling 717-787-3280 or sending email to: gyaw@pasen.gov. Sen. Carolyn Comitta (D-Chester) serves as Minority Chair and can be contacted by calling 717-787-5709 or sending email to: senatorcomitta@pasenate.com.
Related Articles This Week:
-- Gov. Shapiro Announces $267 Million Investment In 31 PA Industry Projects To Reduce Air Pollution, Cut Energy Costs, Create Jobs, And Combat Greenhouse Gas Emissions In 23 Counties; Next Grant Round Opens May 15 [PaEN]
-- Concerned Citizens Of Montour County: Data Center Developer Wants To Make It Harder For Citizens To Appeal Zoning, Permits; DCED Secretary Explains More On How They Want New GRID Principles To Work [PaEN]
-- Gov. Shapiro Appoints Mark Szybist New Special Counsel For Energy Affordability [PaEN]
-- Tri-County Regional Planning Commission Publishes Model A.I. Data Center Ordinance; Links To Other Model Ordinances [PaEN]
-- DCNR: Grid-Scale Solar Energy Installations Are Not Permitted On Any DCNR Lands Or On Lands That Have Received DCNR Grant Funds [PaEN]
NewsClips:
-- Scranton Times: Dedicated Eynon Jermyn Road A.I. Data Center Power Plant Proposal Scrutinized In Archbald
-- PennLive - Charles Thompson: As A.I. Data Center Site Work Starts In Cumberland County, Neighbors Struggle With ‘The Monster Next Door:’ Blasting, Twp. Roads Failing, Failure To Communicate
-- ABC27: A.I. Data Centers Dominate Statewide Township Leaders Convention
-- Tri-County Regional Planning Commission Publishes Model A.I. Data Center Ordinance; Links To Other Model Ordinances [PaEN]
-- Wilkes-Barre Times Leader Guest Essay: Public Backlash Against A.I. Data Centers Creating A Buildability Crisis - By Peter Clark, InsideSources.com
-- City & State PA Guest Essay: Choosing Electric, Natural Gas Suppliers Works For Pennsylvanians, Don’t Let New House Bill Take It Away [House Bill 2131 (Boyd-D-Delaware)] - By John Hanger, Former PUC Commissioner
-- Financial Times: BP Warns Against Windfall Taxes As Iran War Helps Profits Hit 3-Year High
[Posted: April 28, 2026] PA Environment Digest
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