PJM orders emergency steps as heat wave pushes demand to 166 GW

PJM Interconnection ordered generators to maximum output Thursday as a heat dome pushed electricity demand toward a record 166,304 megawatts.

"Everything is sort of stretched to the limit," Ramanan Krishnamoorti, vice president of energy and innovation at the University of Houston, said.

Operating reserves fell 80% to about 5 gigawatts from 22 gigawatts, near the minimum 3.2 GW threshold, PJM data show. Market clearing prices briefly surged to nearly $28,000 per megawatt hour from about $100 before the heat wave, according to PJM operations data.

The U.S. Department of Energy issued an emergency alert effective through Friday, authorizing PJM to curtail power to data centers with backup generators and other nonessential facilities. The heat dome is forecast to last through the July 4 holiday weekend, with heat indices reaching 110 degrees Fahrenheit in New York City and 113 in Washington.

PJM supplies power to about 65 million customers across all or parts of 13 states and Washington, D.C., including the world's largest concentration of data centers in northern Virginia. The grid operator had been straining even before the heat wave as surging energy consumption from data centers and electric vehicles pushed the system to its limits.

The emergency declaration directs PJM to conserve energy by reducing voltage if needed and preparing demand-response resources to cut consumption. The measures are designed to prevent rolling blackouts in a region spanning from the Mid-Atlantic to the Midwest and parts of the South.

The grid stress signals that the pace of data center buildout is outpacing the addition of new generation capacity. Investors will watch whether the emergency triggers accelerated regulatory approvals for new power plants and transmission lines in PJM's territory.

This article is for informational purposes only and does not constitute investment advice.