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“There’s no clear plan by PJM to address both affordability and reliability,” Maryland Governor Wes Moore, seen by some as a 2028 Democratic presidential candidate, said at the start of PJM’s annual meeting in May. “Even if we didn’t foresee the scale, data centers are not new, and we knew a while ago that we would see a lot more.”

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“PJM failed to get ahead of it,” he added.

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A PJM representative said the organization provides significant value to the states it serves and will work with them to address the supply crunch. “We understand states’ concerns about tightening electricity supply and rising demand, which pose challenges for both reliability and affordability,” said spokesman Jeffrey Shields. “PJM has raised these concerns for several years and remains committed to working with our states and members to address these shared challenges.”

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Part of the issue is PJM’s complex and unusual structure.

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It oversees electricity transmission as well as the markets and auctions that set prices. It’s technically a private corporation, but it functions as a membership organization. Its more than 500 voting members — including utilities and power plant operators — can set policy through votes on internal committees, but it also has a staff and governing board that make their own decisions. Member companies often have wildly divergent interests, with some pushing to expand renewable power while others cling to coal.

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Its chief executive officer, David Mills, has been in the role for just a month. In a letter to stakeholders, he outlined a “credibility gap” within the market, between the need for high prices to entice power-plant construction and protecting consumers from unaffordable bills. Capping prices for citizens means less power generation coming online, he said.

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“My job is to make sure that PJM is no longer in everybody’s crosshairs as the punching bag for getting all this stuff done,” Mills said at the annual meeting. “This is going to take a village.”

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Mills’s letter accompanied a policy paper outlining three possible paths forward. They ranged from more long-term contracts to the possible rationing of electricity for different consumers — a prospect unlikely to go over well with the public. Hotter weather and more severe storms fueled by global warming are already raising the risks of blackouts.

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“You’re sort of in an unwinnable situation: the tools that you have are unusable, and you’re going to have a situation where there’s going to be some pain to solve this problem,” said Dylan Seff, head of utilities and sustainable power at energy company Vitol SA.

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Of course, PJM isn’t the only US grid operator grappling with the rapid rise in power demand, which had been stagnant for much of the past two decades. Managers of the Texas grid, for example, pressed forward this week with plans to review data center interconnection requests in batches rather than on a “first-come, first-studied” basis. 

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A core challenge for PJM will be reforming the so-called capacity market, a mechanism that aims to ensure the grid has sufficient power for the dozens of hours each year when demand is highest and the risk of blackouts grows. The data center boom has added about $23 billion to the costs of providing that insurance for the three years ending in mid-2028, according to a recent report from PJM’s independent market monitor. 

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What PJM looks like a year from now will depend on the choices the organization — and its regulators — make in the next two months, according to the White House official speaking on condition of anonymity due to the sensitivity of the issue. There’s even a risk the grid operator could dissolve without federal intervention should AEP leave and other utilities follow. Swett, in her remarks to PJM’s annual meeting, made clear dramatic changes may be needed.

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“We are at a moment of profound consequence,” Swett said. “I personally have great appetite for aggression when the country’s future hangs in the balance.”

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—With assistance from Naureen S Malik.

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