PJM Board Approves $11.8 Billion Transmission Expansion: What Commercial Buyers Must Know
PJM Interconnection's board has approved an $11.8 billion transmission expansion plan, the largest single investment package in the RTO's history. The projects target southern Virginia, western PJM, and offshore wind interconnection corridors — all areas facing acute reliability pressure from 5,400+ MW of new peak load, driven overwhelmingly by data center buildouts. Simultaneously, PJM is extending its capacity price collar through 2030, which Pennsylvania Governor Shapiro estimates will save 67 million PJM customers an additional $27 billion. For commercial energy buyers, this is a mixed signal: transmission costs will rise over the next decade, but capacity costs will be capped for longer.
Why $11.8 Billion, and Why Now?
PJM's transmission planning process has been under enormous pressure. The footprint — spanning 13 states from Virginia to Illinois — is experiencing an unprecedented convergence of forces that make massive grid investment unavoidable:
- Data center load explosion: Peak load is projected to expand by 5,400+ MW for the 2026/2027 delivery year alone. Northern Virginia (Dominion territory) hosts the largest concentration of data centers in the world, and expansion continues at pace. PJM is now proposing behind-the-meter generation rule reforms to allow data centers to co-locate generating resources.
- Generator retirements outpacing additions: Over 6,000 MW of coal and gas capacity has retired in recent years, while new dispatchable generation takes 5-7 years to interconnect and build. The intermittent renewables replacing them require transmission upgrades to deliver power during peak periods.
- Southern Virginia constraints: The Dominion zone has become the most congested region in PJM, with transmission bottlenecks forcing capacity prices to hit the administrative cap of $466.35/MW-day in the 2026/2027 auction.
- Offshore wind integration: Several transmission projects in the package are specifically designed to interconnect offshore wind farms planned along the Mid-Atlantic coast, requiring significant undersea cable landing points and onshore grid reinforcement.
Capacity Price Collar Extension: The $27 Billion Question
Alongside the transmission investment, PJM's Members Committee consulted on extending the capacity price collar for two additional years, covering the 2028/29 and 2029/30 Base Residual Auctions. This collar, initially settled for the 2025 and 2026 auctions, caps the maximum clearing price in the capacity market.
The National Energy Dominance Council and PJM-member state governors jointly pushed for this extension. Pennsylvania Governor Josh Shapiro's office projects the extension will save PJM's 67 million customers an additional $27 billion through 2030. For commercial buyers, this means capacity charges — which surged 833% in the 2026/2027 BRA to $269.92/MW-day — will have a ceiling for at least four more delivery years.
⚡ Expert Insight — KilowattLogic Research
"The price collar extension is a pragmatic move, but it doesn't solve the fundamental supply-demand imbalance. What it does is buy time — roughly 4 more years — for the $11.8B in transmission and the Reliability Backstop Procurement to actually deliver new capacity. For commercial buyers with contract renewal windows in 2027-2029, the collar means your capacity component won't spike further, making this an attractive period to lock in longer-term supply agreements."
Reliability Backstop Procurement: A New Tool
In February 2026, PJM launched stakeholder workshops for a "Reliability Backstop Procurement" — a one-time procurement process to secure new generating capacity outside the existing capacity market. This is a significant departure from PJM's traditional market-based approach and signals the severity of the supply gap.
The backstop is designed to fast-track new dispatchable generation in areas where the capacity market alone isn't attracting sufficient investment. Think of it as PJM saying: "The auction prices aren't getting new plants built fast enough, so we need a separate procurement mechanism to fill the gap."
What This Means for Commercial Energy Buyers
Procurement Strategy Implications
The $11.8B investment will flow through Network Integration Transmission Service (NITS) rates. Budget for a 15-25% increase in the transmission component of your bill over the next 5-8 years, depending on your utility's allocation share.
The price collar extension creates a ceiling. If you're negotiating supply contracts with capacity pass-through structures, this ceiling reduces your worst-case exposure for four delivery years.
With the collar in place, suppliers can price capacity components with more certainty. This is an attractive window to negotiate fixed-price contracts that include capacity, before the collar potentially expires.
If your facilities are in the Dominion, BGE, or PEPCO zones, you face the highest congestion costs and capacity prices. The transmission upgrades specifically target these areas, but relief is 3-5 years away. Consider demand response or behind-the-meter generation as near-term hedges.
PJM Transmission Plan vs. Data Center Growth Trajectory
| Metric | 2024 | 2026 | 2028E | 2030E |
|---|---|---|---|---|
| PJM Peak Load (GW) | 148.2 | 153.6 | 162.0 | 172.0 |
| Capacity Price ($/MW-day) | $28.92 | $269.92 | Collar-Capped | Collar-Capped |
| Data Center Load (GW est.) | ~8 | ~13 | ~20 | ~28 |
| Tx Investment Deployed ($B) | — | $1.2 | $5.5 | $11.8 |
Sources: PJM Load Forecast, BRA Results, FERC Filings. 2028-2030 values are estimates based on published forecasts.
Bottom Line
PJM is making the right structural investments, but relief is years away. The $11.8 billion transmission package and Reliability Backstop Procurement signal that the grid operator recognizes the magnitude of the challenge. For commercial buyers today, the actionable takeaway is: use the capacity price collar window (through 2030) to secure fixed-rate supply contracts, while budgeting for gradually increasing transmission charges as the infrastructure buildout accelerates.
Sources: PJM Board Resolution (Feb 2026), PJM Members Committee Price Collar Extension Filing, PA Governor's Office Press Release, RTO Insider, Utility Dive, PJM 2026/2027 BRA Results. Data verified against PJM primary filings. Forecasts tagged as estimates where indicated.