A coalition of state lawmakers is pressing PJM to allow more clean energy projects to move forward, as many are at risk of missing out on expiring federal subsidies. The group warned that delays in the existing grid interconnection process are jeopardizing resources desperately needed to help plug a looming capacity shortage and stem rising electricity prices for consumers.

In a Sept 29. letter to PJM, over 100 lawmakers with the National Caucus of Environmental Legislators (NCEL) argued that PJM has several options to speed up its grid interconnection process and maximize the number of facilities that get deployed. These reforms are needed, they said, because bottlenecks in the current system put many of the nearly 60 GW of clean energy and BESS projects in PJM’s queue at risk of missing deadlines to qualify for crucial federal subsidies.

“Our region faces a capacity and affordability crisis as demand continues to rise and new generation is slow to come online,” said Maryland Delegate Lorig Charkoudian (D) in the letter. “It is essential that PJM removes barriers that encumber wind and solar energy – currently the fastest and cheapest energy sources to deploy – and do so in a timeline that enables more projects to qualify for federal tax incentives before they expire.”

Under President Donald Trump's "One Big Beautiful Bill" Act, developers must begin construction by July 4, 2026, to qualify for federal tax credits. Projects that miss that deadline can qualify for the credits by placing the facilities into service by the end of 2027.

The pressure on PJM comes as it faces a potential capacity shortage as soon as next year, driven by a historic rise in power demand from the rapid expansion of energy-intensive data centers. The squeeze is already impacting PPA values. Pexapark’s PJM composite value for a 10-year solar PPA, for example, has gained more than 9% over the past 6 months.

The system operator has already undertaken several extraordinary out-of-market measures to mitigate the supply crunch, from expediting shovel-ready generator projects to raising capacity prices to historic levels to incentivize new investments.

According to NCEL, over 20 GW of renewable and BESS projects are poised to sign interconnection agreements by November 2025, with another 39 GW in advanced stages of development.

NCEL called on PJM to quickly implement a raft of changes to its interconnection queue process, as called for under FERC Order 2023. This includes imposing penalties on transmission developers that miss deadlines for completing interconnection studies. The group also urged PJM to move forward on its proposal to provide provisional interconnection service so development projects can proceed with construction sooner.

The group also asked PJM to advance its efforts to enable the efficient transfer of capacity interconnection rights, or CIRs, from retiring fossil generators to renewable and BESS facilities. This measure alone could help pave the way for the addition of as much as 3.7 GW of clean energy capacity by 2027, they said.  

Still other measures NCEL requested include beefing up PJM staff to process grid interconnection requests faster, coordinating more closely with states to identify solutions for speeding up the review process, and advocating for renewables more forcefully with the White House and federal agencies.  

For its part, PJM has defended its progress, pointing to interconnection reforms that it says have slashed its project backlog to about 46 GW from about 200 GW. It noted that other constraints, from permitting delays to supply chain bottlenecks, are also to blame for the slow addition of projects.