PA Environment Digest Blog: PUC Study Warns Rapid Data Center Growth Will Cause PJM Electric Grid To Fail Reliability Standard In 2027, If No Further Actions Taken

Monday, September 14, 2026

PUC Study Warns Rapid Data Center Growth Will Cause PJM Electric Grid To Fail Reliability Standard In 2027, If No Further Actions Taken

On September 14, the Public Utility Commission released an independent analysis warning rapidly growing electricity demand – driven largely by data center development – could create serious reliability risks across Pennsylvania and the broader region unless electricity supply keeps pace with that growth.

The analysis, conducted by Synapse Energy Economics, a nationally recognized energy consulting firm, examined whether sufficient electric resources will be available to reliably serve customers as demand grows and existing generation retires.

The study found that based on current load forecast from regional power grid operator PJM and assuming no additional policy actions, the regional grid fails to meet PJM's reliability planning standard from 2027 through 2030.

By 2030, the modeled reliability risk is nearly six times worse than PJM's planning standard.

“Pennsylvania is at an energy crossroads,” said PUC Chairman Steve DeFrank. “Data center development brings significant opportunities, but that growth cannot come at the expense of the families and businesses that already depend on reliable and affordable electric service. This analysis sends a clear warning: electricity demand and supply are moving out of balance, and the status quo is not sustainable. We need urgent action at PJM and a broader Pennsylvania energy strategy that makes sure our supply of electricity keeps pace with demand.”

A Dramatically Changing Reliability Picture

PJM plans the regional electric system around a longstanding reliability standard designed to limit potential electricity shortages to approximately one event every 10 years.

The Synapse analyses show how dramatically that risk could change if electricity demand grows faster than available supply.

Under the Reference scenario, which is the most likely scenario based on the current environment, reliability risk in 2030 is nearly six times PJM's planning standard.

Under a more severe scenario combining higher electricity demand with constrained development of new generation, the model projects an expectation of more than 13 potential loss-of-load events per year starting in 2030-- compared with the traditional planning standard of one event every 10 years.

Those results do not predict that customers will experience a specific number of outages. Rather, they illustrate the magnitude of the reliability risk if unprecedented increases in electricity demand significantly outpace the resources available to serve it.

[Note: The study says-- “Between 2029 and 2030, primarily driven by data center load, LOLE (Loss Of Load Events] increases by 3 times in the Reference scenario and 48 times in the High Load and Low Supply scenario.

[“The 48 times increase means that PJM customers could expect to experience less than one day with an outage in 2029 and over 13 days with outages in 2030.

[“In the Reference scenario, reliability events remain most concentrated in winter morning hours but gain prevalence in winter and summer evenings.

[“In the High Load and Low Supply scenario, the peak risk hour shifts to summer evenings, but reliability events become more frequent throughout the year as data center load (which is assumed to have a flat load shape) increases demand for electricity in every hour.]

Data centers are a major factor in that equation. In the study's severe scenario, projected new data center demand across PJM between 2029 and 2030 alone exceeds the current annual electricity demand of the entire Commonwealth of Pennsylvania.

“Time matters,” Chairman DeFrank said. “The changes highlighted in this report are not decades away. The reliability pressures emerge during the next several years, and the decisions being made now will determine how prepared we are to meet them.”

PUC Actions Focus On Reliability And Consumers

The Commission has already taken several steps to address large-load growth and protect existing customers.

In May, the PUC established a model large-load tariff designed to ensure that customers requiring 50 megawatts or more of electricity bear the costs they add to the electric system rather than shifting those costs to other ratepayers.

The Commission is also implementing Act 45 of 2025, which provides an additional layer of accountability for Pennsylvania utility load forecasts submitted to PJM – an increasingly important “double check” as data center proposals drive projections of future electricity demand.

Additionally, the PUC is supporting Gov. Josh Shapiro's recent Executive Order addressing data center development and has taken steps related to PJM's proposed Reliability Backstop Procurement (RBP), including directing Pennsylvania electric distribution companies seeking qualifying RBP offsets to submit information to the Commission for review.

Last week, the Commission also unanimously adopted a motion by Vice Chair Kimberly Barrow addressing PJM's proposed RBP and Interim Resource Adequacy Service. That action reinforced the Commission's position that during electricity shortages, existing customers must be protected ahead of newly-connecting large loads such as data centers.

Urgent Action Needed At PJM And Across Pennsylvania

The reliability challenge extends well beyond Pennsylvania. PJM's capacity auctions for both the 2027-28 and 2028-29 delivery years fell short of the regional reliability requirement, prompting new initiatives intended to secure additional resources and better manage large-load growth.

The Commission emphasized that Pennsylvania's larger energy challenge cannot be solved by one agency, one report or one policy initiative.

“The PUC will continue doing everything within our authority to protect consumers and reliability, but this issue is bigger than the Commission,” DeFrank said. “Pennsylvania's energy system is changing dramatically, and our energy policies need to evolve with it. We need policymakers, regulators, utilities, generators, consumer advocates and other stakeholders working together on a comprehensive approach that encourages economic growth, brings needed energy resources onto the grid, protects existing ratepayers and preserves reliability.”

Click Here for the full report.

Trends In PA Electric Generation

The study offered these observations in various scenarios of electric generation trends in Pennsylvania--

-- Adding Solar/Battery Storage: Resource additions through 2030 are mostly solar and battery storage at between 3 and 7 GW for each resource type.

-- Adding Natural Gas/Solar: Through 2040, Pennsylvania’s resource additions are primarily limited to gas combined-cycle units (with 5 to 12 GW of additions, depending on the scenario) and solar (with 3 to 4 GW of additions through 2040, depending on the scenario).

-- End Of Useful Life For Coal Plants: In each scenario, Pennsylvania sees 3 to 4 GW of coal retirements by 2040, largely due to coal plants reaching the end of their useful lives. This leaves between 1.0 and 1.2 GW of coal capacity in the state by 2040, depending on the scenario.

-- End Of Useful Life For Natural Gas Plants: Pennsylvania also sees 2 to 8 GW of net retirements of gas steam and gas combustion turbines, as a result of resources reaching the end of their useful lives, and more economical resources becoming available.

-- Energy Exports Shrink As In-State Demand Grows: Pennsylvania’s role as a large energy exporter is maintained in the Reference scenario and No New Data Centers scenario. However, the total quantity of electricity exported shrinks as in-state demand grows and more resources are built outside of the state. In the High Load and Low Supply scenario, Pennsylvania is projected to be a net energy importer by the late 2030s.

NewsClips:

-- Utility Dive: PA PUC Report: PJM Faces 2030 Reliability Crisis If Data Center Load Growth Continues; PJM Agrees Demand Growing Faster Than The Ability To Build New Power Sources

-- PennLive - Charles Thompson: PUC Report Warns Of More Power Outages As A.I. Data Centers Surge In Pennsylvania

-- WHYY - Sophia Schmidt: A.I. Data Center Growth Could Mean Blackouts In Coming Year, PA PUC Report Says

-- The Center Square: PUC Warns A.I. Data Center Demand Threatens Electricity Grid Reliability

Resource Links:

-- PUC Moves To Address A.I. Data Center Impacts On Emergency Load Control Procedures, Allocation Of Costs Associated With Large Loads; Technical Conference On Cost Responsibility To Be Held [PaEN]

-- PUC Launches Review Of Utility Ratemaking, Working Group To Address Affordability, Transparency And Changing Economic Conditions [PaEN]

-- PJM Interconnection Proposes Changes To Reliability Standards To Address Situations Where A.I. Data Centers Disconnect From The Grid Without Warning And Threaten Grid Stability [PaEN]