The Federal Energy Regulatory Commission (FERC) has approved a proposal by PJM Interconnection – the nation’s largest regional grid operator – to fast-track the construction and interconnection of new power plants in its territory. The decision, made on February 11, 2025, comes in response to warnings of potential electricity capacity shortfalls in PJM’s multi-state region as early as 2026. PJM’s plan, known as the Reliability Resource Initiative, aims to accelerate the review and connection of “shovel-ready” generation projects to bring additional power online more quickly. At the same time, FERC also approved complementary rule changes to utilize existing grid capacity for new resources better.
This move is considered an extraordinary but necessary step to bolster grid reliability amid surging demand and generator retirements. PJM and its supporters argue that expedited action is needed to avoid electricity shortages and blackouts, especially given the rapid load growth from energy-intensive developments like large data centers. However, the approval was not without controversy. Renewable energy developers and one FERC commissioner raised concerns about fairness, environmental impacts, and whether the plan addresses near-term needs. This Energy Brief provides a clear overview of the approved fast-track proposal, its objectives and mechanisms, anticipated benefits, the criticisms and potential downsides, and a broader look at how this decision may affect wholesale power markets across the U.S.
Outline of the Approved Fast-Track Proposal
What was approved
FERC approved two interrelated PJM proposals intended to speed up the addition of new generation capacity. The centerpiece is PJM’s Reliability Resource Initiative (RRI), a fast-track interconnection review process for a select group of new power projects. Alongside it, FERC endorsed changes to PJM’s Surplus Interconnection Service rules, which allow better use of unused capacity on the grid. Together, these measures form PJM’s fast-track plan to quickly bring new power plants online in its 13-state footprint.
Objectives
The primary goal is to avoid projected electricity shortfalls by mid-to-late decade and ensure reliable service as demand rises. PJM has projected significant load growth—driven in large part by a boom in data centers—and warns that, without intervention, capacity could fall short as soon as 2026/2027. Compounding the challenge, many older power plants are retiring, and new resources (often renewables) face delays in the regular interconnection queue. The fast-track plan aims to rapidly add generation to bridge this gap, preventing reliability issues such as energy shortages or voltage problems on the grid. By expediting up to 50 viable projects and unlocking spare grid capacity, PJM aims to have new resources in place ahead of the crunch period.
Mechanisms
Reliability Resource Initiative (Fast-Track Queue)
Under the RRI, PJM will allow up to 50 new power projects that meet specific criteria to enter a special, accelerated interconnection process. These projects must score highly on metrics for reliability impact, viability, and availability—essentially identifying shovel-ready projects that are likely to help reliability. The chosen projects will be admitted into PJM’s current interconnection study batch (called Transition Cycle #2) out-of-turn rather than waiting for the usual queue sequence. By piggybacking on an ongoing cycle, the fast-track projects can be evaluated much sooner than if they were queued normally.
The limit of 50 projects was set to strike a balance: it’s a sizeable infusion of new capacity, but not so many that it would overwhelm the study process and cause further delays. PJM estimates this initiative could bring roughly 10 GW of generation online up to 18 months earlier than the standard timeline would allow. FERC agreed that the plan reasonably addresses the looming resource adequacy shortfall driven by load growth and generator retirements. Notably, the fast-track is technology-neutral—any type of resource (gas, renewable, storage, etc.) can qualify if it meets the criteria, according to FERC, which found the selection criteria “facially neutral” and not unduly discriminatory.
Surplus Interconnection Service (SIS) Expansion
In addition to the fast-track queue, PJM will expand the use of Surplus Interconnection Service to quickly add capacity at sites that already have grid connections. Surplus Interconnection Service allows a new generator (often an energy storage device or an additional generator) to utilize the unused portion of an existing power plant’s grid interconnection, so long as the total feed-in does not exceed the original limit. PJM’s approved changes remove several previous restrictions on this service and let developers apply for surplus capacity earlier in project development.
Notably, the surplus interconnection process runs on a separate, much faster track than the main queue—typically taking less than half the time of a complete interconnection study. The expected outcome is to unlock dormant capacity and bring it into use for reliability. Industry groups supporting the change estimate it could free up over 26 GW of additional capacity by the 2026/2027 delivery year through quicker addition of batteries and other resources at existing sites. This surplus-capacity measure enjoyed broad support, including from clean energy advocates, as it efficiently increases supply without building entirely new grid connections.
Benefits of the Plan
The fast-track power plant construction plan is designed to enhance PJM’s electricity supply, reliability, and economy. One of its primary advantages is addressing looming electricity shortages. By accelerating select projects, PJM directly increases the available power supply, ensuring that projected capacity shortfalls are mitigated before they become a crisis. Improved grid reliability is another significant benefit, as additional generating capacity reduces the risk of blackouts and emergency grid conditions, particularly during extreme weather events or peak demand periods.
The initiative also promises faster project completion, with an estimated 10 GW of capacity coming online approximately 18 months earlier than under standard interconnection timelines. By reducing delays, this approach helps stabilize electricity prices and provides greater certainty for energy planners. Economically, the plan fosters job creation and attracts investment in new power infrastructure, supporting broader economic growth. Additionally, the Surplus Interconnection Service expansion facilitates the deployment of storage and renewable projects, making existing grid infrastructure more efficient without requiring extensive upgrades.
Concerns and Potential Downsides
The proposed plan offers clear benefits but has sparked concerns on multiple fronts. Environmental advocates warn that accelerating the development of fossil-fuel power plants could result in decades of sustained carbon emissions, potentially hindering the transition to cleaner energy sources. Additionally, questions of fairness and market integrity have arisen, as prioritizing specific projects ahead of others in the interconnection queue raises the issue of favoritism and challenges the principles of market neutrality.
Regulatory and legal uncertainties further complicate the situation, with critics suggesting that the plan stretches the boundaries of FERC’s open-access rules. This could establish a precedent for future exceptions, creating ambiguity in regulatory enforcement. Moreover, introducing new power plants at an accelerated pace can disrupt existing market dynamics, influencing energy pricing and investment decisions in ways that may not be fully anticipated.
Impact on Wholesale Power Markets
The fast-track plan is poised to substantially change wholesale power markets, affecting pricing, competition, and market strategies. One of the most immediate impacts is on capacity prices. By accelerating the addition of new power generation, the initiative is expected to alleviate supply constraints, thereby reducing the pressure that drives up prices in PJM’s capacity auctions. This means that utilities and consumers could benefit from lower electricity costs, as a more robust supply would mitigate the risk of price spikes caused by shortages.
Beyond pricing, the expedited entry of new power plants introduces a shift in market competition. With an influx of new capacity, older and less efficient generating units may find competing increasingly difficult. This could lead to the retirement of aging plants that struggle to remain economically viable in a more competitive landscape. Over time, this transition may reshape PJM’s resource mix, encouraging a more modern and efficient fleet of power generation assets that better align with the evolving demands of the market.
On a broader scale, the approval of this fast-track initiative may influence regulatory approaches across other U.S. power markets. Grid operators facing similar reliability challenges might consider PJM’s strategy a potential model for expediting interconnection processes in their regions. States with rapidly growing energy demand—such as those experiencing data center booms or industrial expansion—could push for similar measures to ensure that new power generation comes online swiftly enough to meet demand. This could lead to a ripple effect where other Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) adopt comparable policies, shaping the future of interconnection procedures nationwide.
While the full effects of the fast-track initiative will take time to materialize, its influence on wholesale power markets is already evident. By injecting additional supply into the system, increasing competition among generators, and setting a precedent for regulatory innovation, PJM’s decision will likely have lasting consequences for its own market and energy markets across the country.
Conclusion
FERC’s approval of PJM’s fast-track power plant initiative underscores the urgent need to balance reliability concerns with market efficiency. The plan aims to prevent potential energy shortages and stabilize electricity prices by expediting interconnections and maximizing existing infrastructure. However, the initiative also raises questions about environmental impact, fairness in market competition, and long-term regulatory implications. The success of this approach will depend on how effectively the selected projects come online and integrate into PJM’s system. Moving forward, this decision could serve as a model for other regions facing similar challenges, shaping future policies on grid reliability and infrastructure development across the nation.