PJM recently released Phase II System Impact Study results for Transition Cluster 2 (TC2), a review of the backlog of projects wanting to connect with the country’s biggest grid operator, and PJM is celebrating it as a milestone. The grid interconnection queue is moving! The new “first-ready, first-served” process is working! Let me offer a different read: This is not a success story. It’s a damage report.
Let’s look at what actually happened.
TC2 started with 533 projects and 55 GW of capacity. Developers filed those applications in 2020 and 2021. PJM finalized the Phase II results in June 2026. Five to six years later. By that point, 255 projects had withdrawn and 25 GW had walked away. That is not a queue clearing — that is half the queue dying in the waiting room.
To put 25 GW in context: that is more generation capacity than the peak demand of many European nations. Gone. Not because the projects were bad, but because the timeline was brutal.
The $0 cost projects are the most damning part.
Hidden in the newly released Individual SIS Reports is a detail that should stop everyone in their tracks: over a GW of projects were assigned exactly $0 in network upgrade costs. Zero. PJM’s own engineering studies confirmed the grid had sufficient headroom to absorb these projects without a single transmission upgrade — on day one.
These developers didn’t need a massive infrastructure overhaul. They were ready. And they still had to wait six years to be told they could have plugged in six years ago. How many of those projects are still standing? How many withdrew before ever seeing that result?
While a lucky 21% of solar projects drew zero network upgrade costs, the story for the remaining project is shocking. In absolute terms, solar carried a staggering $3.17 billion cost burden, representing 61% of the entire cycle’s upgrade costs. PJM might claim this proves solar uniquely stresses the grid. That is flatly incorrect. This isn’t evidence of technological complexity; it is an artifact of a structural cost-allocation methodology that is systematically biased.
PJM says it filtered out speculators. The data tells a different story.
The argument goes that tougher readiness requirements weeded out projects that were never serious. Maybe some. But that explanation doesn’t hold up against the economic reality of a five-year wait.
A project started in 2021 doesn’t survive to 2026. Equipment and labor costs look completely different after a post-pandemic supply chain crisis and a 20-year high in interest rates. And developers have been paying land lease payments the entire time, with no visibility on a commercial operation date. This isn’t a story about speculators being flushed out. It’s a story about viable projects running out of money and patience.
The timing couldn’t be worse — for reliability and your electricity bill.
PJM has spent the past several years sounding the alarm on reliability. Tight reserve margins. Coal retirements accelerating. Load growth surging, driven in large part by AI data centers piling into Northern Virginia. PJM is genuinely worried about keeping the lights on.
But reliability isn’t the only casualty of a slow queue. Ratepayers pay for it too.
GridLab commissioned Aurora Energy Research to model exactly this question. The answer is stark: if just 10% of the land-based renewable and battery storage projects sitting in PJM’s interconnection queue had been built in time for the 2026/27 delivery year, the capacity auction clearing price would have dropped to $254/MW-day and reduced total capacity costs by $3.5 billion. Ten percent is not a moonshot. That’s a modest slice of a queue that already had the projects lined up , some of which had zero upgrade costs!
Instead, capacity prices in PJM’s latest auction hit the $333.44/MW-day price cap — a record high for the third auction in a row. The capacity market is not an abstraction. It shows up on household and business electricity bills across thirteen states. When supply is artificially constrained by a six-year study cycle, everyone pays more.
So here is where we are: PJM is simultaneously warning about a reliability crisis, presiding over the disappearance of 25 GW of potential solutions, and setting record-high capacity prices in part because the supply that should have shown up never got through the door. The same organization raising the alarm created the conditions for the shortage.
PJM can celebrate TC2 clearing if it wants. But the real headline is what got lost along the way and how big the price tag will be for 67 million customers in the mid-Atlantic.