PJM Backs $6.7B Grid Upgrade Amid Rising Energy Needs
The PJM Interconnection board has approved a $6.7 billion transmission expansion plan, citing growing electricity demand and shifting regional power flows. However, the plan faces potential hurdles due to long lead times for critical transformers and other grid components.
The plan includes a $4.6 billion multistate 765-kV transmission backbone to be built by American Electric Power (AEP), Dominion Energy, and FirstEnergy. Key components include a 260-mile 765-kV line from West Virginia to Maryland and a 155-mile line in Virginia. AEP's Transource unit will invest $1.1 billion, with additional projects planned in Indiana, Ohio, and Virginia.
Beyond regional grid reinforcement, the plan also allocates $1.5 billion to transmission upgrades needed for Talen Energy to retire its Brandon Shores coal plant. This cost has doubled from initial estimates due to rising transformer prices, supply-chain constraints, and engineering complexities. The work will be carried out by Baltimore Gas and Electric, PECO Energy, and Potomac Edison.
According to PJM, increasing demand from data centers, electric vehicles, and building electrification is accelerating the need for new transmission. However, a report by the International Energy Agency (IEA) warns that transformer procurement times have doubled since 2021, reaching up to four years for large units. The IEA also notes that permitting delays further exacerbate the issue.
As PJM moves forward with its expansion, the industry's ability to source high-voltage transformers and grid equipment will be a key factor in meeting future energy demands.
