PJM Large Load Reform Heats Up with Dueling Announcements, No Near-Term Relief

Key Takeaways

• Multiple frameworks to interconnection proposed. The White House's proposed 15-year capacity auction and PJM's CIFP reform outline different paths to expedite interconnection. Navigating multiple frameworks could prolong delays for data center construction and increase capacity costs to energy users in the region with no near-term relief.
• State-backed generation gains advantage. PJM's expedited interconnection track favors generators over 250 MW that have state backing, likely benefiting developers who can secure bilateral offtake agreements and absorb network upgrade costs.
• Supply-demand gap persists. With 16 GW of data centers expected by 2030 but only 14 GW of generation capacity cleared (mostly online after 2030), high capacity payments and market tightness will likely continue.
• Curtailment risk increases. Mandatory curtailment under ‘Connect and Manage’ places data centers at the top of the curtailment stack, requiring sophisticated Bring Your Own Generation (BYONG) contracts to limit exposure.