Part 2
By Peter Cary, Contributing Writer
Driven by the data center and AI explosion, the Mid-Atlantic region is going to see, in just 10 years, an increase in energy demand so huge that it would take the equivalent of 60 nuclear power plants to supply it.
But you don’t have to wait 10 years for a crisis. On June 23, 24 and 25, as temperatures closed in on 100 degrees, the region’s power demand hit 162 gigawatts. With the grid producing only 165 gigawatts, there was no room for error. So, the Mid-Atlantic grid operator halted all maintenance, called for maximum generation and told select customers to cut back their power.
The grid operator also got the U.S. Department of Energy to let it tap into an aging fuel-oil plant whose use had been limited because it polluted the air. And it told neighboring regions that it would have no extra energy to sell because it was maxed out.
The grid squeaked by, but PJM Interconnection, which runs the 13-state system that includes Virginia and Washington, D.C., alerted customers that the strain may get worse before summer was over.
And it did. A failure in a substation forced two Maryland generation plants offline on Aug. 11, blacking out 4,000 customers for 30 minutes. One of the plants was the one the Energy Department had just ordered to stay on. The failure cut PJM’s power capacity by only about 1%, but before it got things fixed, a million customers were told to turn off nonessential appliances and brace for the worst.
The grid is facing a perfect storm: an unprecedented surge in data center power demand, old power plants retiring, and new generation taking way too long to build. All this as summer heat continues to rise and nasty winter storms become more frequent.
In an email to a Fauquier County activist in March, PJM’s senior manager for policy, Susan McGill, warned about “projections indicating that PJM may have more load than generation, which would require extreme measures such as outages or reliance on external areas.”
June came close.
PJM forecasts that the load on its system will increase by 32 gigawatts in just five years and by 62 gigawatts by 2035. A gigawatt is a huge amount of energy – one gigawatt would power 800,000 homes or a small city. Yet in the PJM zone, which stretches from eastern Maryland to Chicago, data centers are asking their utilities to give them one-third, one-half or even a full gigawatt of power each. One data center proposed for Remington, aptly named “Gigaland,” was originally slated for up to 1.2 gigawatts.
Some skeptics, especially clean-energy advocates, think PJM is exaggerating the coming demand to pave the way for more infrastructure development, which helps utilities’ bottom lines. But others, including independent analysts with no stake in the game, think the forecasts are real.
The Independent Market Monitor, a third-party watchdog that reports to the PJM board, put it succinctly in a July report to federal regulators: “The current supply of capacity in PJM is not adequate to meet the demand from large data center loads, and will not be adequate in the foreseeable future.”
PJM is scrambling. In May it launched 51 new projects, of which half are in the Dominion Zone, which covers about two-thirds of Virginia. Three are natural gas plants that would provide 2.6 gigawatts of power, three are nuclear plant upgrades for 1.5 gigawatts more. Still, all the new projects would add only about a third of what PJM says it will need by 2030.
Texas, in a similar situation, passed a law in June that allows new data centers to connect to its grid with the proviso that utilities can shut off their power when the grid is overloaded.
Last month PJM came up with a similar idea. It proposed that, in effect, it could take the power demand of new data centers off its books if the centers would agree to let PJM cut off their power when the grid is stressed. That would help electricity prices, which are driven upward by a shortage of generation and zooming demand, PJM said. But data centers didn’t want their power cut off, and utilities said they were not legally allowed to do so.
Dominion Energy, which says it serves 450 data centers, is in a bind, too. The utility has a 15-year plan that relies on new solar and wind generation, gas turbines and small nuclear reactors. But even if those could all be built in time–a remote possibility–that still won’t be enough to serve all its customers.
Dominion, which already imports a quarter of its electricity, says 60% of its new generation will have to come from neighboring utilities. Yet some of those neighbors—who are also part of PJM’s grid—are facing the same challenges and might not be able to meet the power demand either.
Predictions consistently wrong
Virginia has been the epicenter of the data center industry for years. While the count is fuzzy – the Piedmont Environmental Council maps 470 buildings and others count about 190 campuses—the state’s data centers pull more power than those of any country outside the U.S.
In July, nine governors, including Virginia’s Glenn Youngkin, wrote to PJM asking for more influence over its operations, citing PJM’s “multi-year inability” to add to generation.
Their letter raises the question: Should the state, its power companies and the grid operator have seen this overload coming and done more to avoid the consequences?
“They certainly could have done a better job anticipating,” said Jon Gordon, policy director of a clean-energy group trying to bring solar power and wind to the rescue. His 40 years in the power business includes management jobs at a utility and an electricity wholesaler.
Dominion and PJM have repeatedly guessed wrong on how fast the demand for electric power would grow. Every year since 2019, they have under-forecast looming loads.
In 2021, Dominion projected less than 2 gigawatts of demand growth over 15 years.
In 2022, it predicted 8 gigawatts of growth over 15 years.
Then ChatGPT, one of the fastest growing consumer apps in history, was released in November 2022 and the energy-intensive artificial intelligence boom took off.
In 2023, the prediction shot to 20 gigawatts of growth over 15 years.
Next, a shocker came: In just the last half of 2024, Dominion contracted to supply data centers with 19 gigawatts of power, doubling what it had contracted for in July.
Dominion CEO Robert Blue said part of the surge was probably because Dominion had announced a three-year slowdown in data center connections because the utility simply could not build transmission lines fast enough. Applicants rushed to get into the queue.
“But what’s undeniable,” Blue said, ”is that data center growth in Virginia is not slowing down. In fact, it’s accelerating.”
The challenges are enormous.
Building power plants and transmission lines takes years and tremendous amounts of money — the spike in energy demand is coming too fast.
Burning more coal and adding gas-powered generators spark fierce debates over climate change. President Trump has eliminated subsidies for solar, wants to cancel all wind projects, and is trying to expedite nuclear buildout. Nuclear power raises fears about safety and waste disposal. And any way of serving the demand brings new power lines, arguments over sacrificed farmland and often expensive and drawn-out lawsuits.
Chris Miller, president of the nonprofit Piedmont Environmental Council, said it is “reckless” for Dominion to be signing contracts to supply data centers when it doesn’t have the power, calling it a “crisis by contract.” Dominion says state law requires it to sign up all qualified power applicants.
Dominion spokesman Aaron Ruby said when data centers are recruited to come to Virginia, his company plays a role in economic development. Still, he said, “we are only going to connect new customers at a pace that we can reliably serve and in a way that does not negatively impact the service for our existing customers.”
PJM and Dominion have been saying a significant amount of the new load comes from the “electrification” of everything from homes to cars. But data from PJM and Dominion shows electrification as having a minimal effect, at least in the near term.
And PJM seems to have backed off that claim. In a July report, PJM noted how the 2025 summer load exceeded those of 2023 and 2024: “This is a result of both extreme hot weather and the growing demand from data centers.”
Mark Gribbin, who headed a joint legislative committee’s examination of data center effects, told the State Corporation Commission in December: “Almost all of that demand that you see is being driven by data centers, not other things like population growth or electric vehicles.”
And the demand is spreading outside Northern Virginia. While Dominion’s service zone still sees the most data center demand, PJM says 10 of its 21 service zones are experiencing data center load growth. American Electric Power, whose zone stretches from northern Indiana through Ohio to southwestern Virginia, saw its 2040 load projection leap by 15 gigawatts just this year.
Meanwhile, older power plants are closing, exacerbating the problem. Recent legislation in Virginia and nearby states called for retirement of coal, gas and oil plants to transition to green energy, while other fossil facilities closed for economic reasons. Since 2016, PJM has added nearly 38 gigawatts of generation but retired 41 gigawatts, according to its independent monitor. By 2030, 40 gigawatts more could retire, the grid operator says, though the Trump administration is urging old fossil fuel plants to stay online.
The surging power demand and closing of old plants has thrown PJM and its utilities into a crisis. Federal regulators once called for a 17.8% reserve to cover peaking loads and emergencies. But PJM’s reserves to cover peak loads are dwindling.
Clean-energy delays
The retiring plants could have been supplanted with new clean-energy projects, but PJM’s system to bring those new plants online got swamped.
The problems started when the Virginia Clean Economy Act of 2020 mandated that the state be 100 percent carbon-free by 2050. That brought a rush of solar and battery projects to PJM’s door asking to be connected. PJM’s old approval process, however, was designed to approve just a few large projects a year. Hundreds of clean-energy applicants got stuck in an approval queue slowed by bureaucracy and understaffing.
In February, PJM got federal approval to start 51 “shovel-ready” gas turbine and other generation projects. It also sped up the solar and wind train so that 46 gigawatts of those proposed projects are ready to build. But PJM notes that such projects often encounter supply chain shortages, not to mention President Trump’s war on wind and resistance to solar farms.
“PJM is doing everything it can within its given authority to expedite additional supply,” said PJM spokesman Jeffrey Shields.
Zachary Edelen, who analyzes the eastern U.S. power grid at Aurora Energy Research in Austin, Texas, said PJM’s plans for upgrades to existing plants held the most hope. Building new turbines will hit supply-chain delays of up to five years for materials, he said, and high investment costs are making them unattractive.
On a scale of 1 to 10, Edelen said, PJM’s chances of building 62 gigawatts of new generation by 2035 is “probably a five or lower, just on my intuition.”
Gordon is even more skeptical: “I can't imagine how that could happen.”
Jack Graham, who studies PJM at Aurora, said that if PJM can’t build that much generation, there will be “a forced slowdown” on power data centers could get.
Companies vs. customers
The slowdown is already happening. In 2022, Dominion discovered that the number of data centers it had pledged to serve in Loudoun County had surged beyond the capacity of its transmission lines.
Dominion rationed power as PJM scrambled to build $5.1 billion worth of new lines. New data centers could get only a portion of what they asked for, and a full-power connection could take four years. That was later extended to up to seven years.
Gribbin, who headed the Virginia legislative investigation, told the SCC that “while utilities have an obligation to serve new data center customers, they don’t have to serve them tomorrow.” He said utilities are ruled by two state laws – one requiring them to serve power, but another making sure they don’t collapse the system.
“It seems like the latter has the most priority of the priorities,” he said.
Legislators should pass a law reminding utilities that they don’t have to serve customers right away, Gribbin said.
No legislator presented such a bill.
A Project by the Fauquier Times and Prince William Times
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