A new analysis commissioned by GridLab and executed by Aurora Energy Research indicates that the failure to interconnect projects in PJM’s interconnection queue is directly imposing billions of dollars in unnecessary costs on ratepayers and tightening the region’s reliability margin.
Aurora’s counterfactual modeling suggests that if a modest share of queued land-based renewables and batteries had reached operation in time, consumers could have saved approximately $3.5 billion. The report illustrates the slow processing time that projects in PJM’s interconnection queue have faced since the late 2010s—one of the factors impeding the amount of renewables and batteries built in the RTO to date.
The PJM 2026/2027 Base Residual Auction (BRA) climbed $16.1 billion, up ~10% from a year ago. The 2024 auction’s total cost had jumped to $14.7 billion from $2.2 billion from the year before. While capacity costs make up a relatively small part of electric bills, it is a cost borne by customers. Aurora’s analysis proves that the primary solution is a faster interconnection process.
- The counterfactual analysis estimates that had just a fraction (10%) of the land-based renewable and battery storage projects in the existing interconnection queue been built in time for the 2026/27 delivery year, the auction clearing price would have dropped to an estimated $254/MW-day, reducing total capacity costs to $12.6 billion — $3.5 billion less than actual outcomes.
- The auction’s high capacity prices are signs that supply and demand conditions in PJM are tight. As demand increases, the margin for reliability continues to shrink, making timely connection of new resources increasingly critical to avoid high prices and threats to reliable service.
- PJM currently has roughly 130 GW of capacity-eligible projects in its interconnection queue that entered before 2024, an amount equal to 73% of the capacity offered in the 2026/27 BRA. Major constraints in interconnection, permitting, and construction are preventing timely delivery.
Recommendations to accelerate deployment and protect consumers
For the first time in decades, electricity demand is increasing across the PJM region, driven primarily by data center additions and electrification. The region has not added new supply fast enough to meet this new demand, leading to:
To reduce costs and bolster reliability, PJM and policymakers should prioritize reforms that increase the speed and success rate of bringing resources from the queue to commercial operation. While PJM has made recent progress with cluster studies, the utility of the $3.5 billion in missed savings proves that deeper fixes are required, including:
- Deploying software solutions to provide for faster study timelines.
- Pursuing interconnection pathways that can connect new resources without harming the standard queue ; examples include parallel study paths for large load-serving capacity.
- Move away from attempting full deliverability study for every request; explore integrated planning models similar to consolidated planning approaches underway in other regions. For example, SPP is pursuing a Consolidated Planning Process that integrates its interconnection study and transmission planning processes.
- Improve predictability so projects with signed interconnection agreements reach commercial operation more reliably and quickly; states should also accelerate permitting and siting processes
PJM is responsible for managing the interconnection process. Independent analyses have placed PJM among the slower RTOs to process interconnection requests, creating uncertainty that cascades into permitting delays, supply chain hold-ups, and financing difficulties. With electricity demand rising for the first time in decades and new capacity not arriving fast enough, customers face both sharply higher bills and growing reliability risk.