Amid Rapid Data Center Growth, State Legislators Urge PJM to Protect Ratepayers and Ensure Fair Competition

Washington, D.C. (February 9, 2026) — A bipartisan group of 72 state legislators from nine states and the District of Columbia has submitted a letter to the PJM Interconnection Board urging reforms to protect ratepayers, maintain grid reliability, and ensure fair competition for renewables and battery storage as data centers accelerate energy demand across the region.

The PJM region — America’s largest electricity market, spanning 13 states and the District of Columbia — is facing mounting energy reliability and affordability concerns as demand surges from new large loads like data centers. In response, PJM recently outlined a multi‑part plan to manage the rapid growth of large electricity users, including the addition of a Reliability Backstop Auction. This Backstop Auction is designed to cover a capacity shortfall from the most recent Base Residual Auction — PJM’s standard process for procuring energy capacity — primarily driven by increased demand from data centers.

The letter submitted to PJM today shares feedback and concerns with the PJM Board regarding the proposed plan. The legislators want to ensure the final plan favors ratepayers, reliability, and competition for all energy sources. Specifically, they are calling on PJM to take several key steps, which include:

• Maintaining a price cap in the Base Residual Auctions to prevent billions in additional costs for consumers.
• Protecting consumers from the risk of increased costs and scarcity by ensuring that the existing generation in the Base Residual Auction cannot switch to the Reliability Backstop Auction.
• Prioritizing full interconnection‑queue reform rather than creating an Expedited Interconnection Track, which could inadvertently channel generation resources towards only serving data centers, and away from everyday customer-driven demand. 
• Removing arbitrary rules from the Reliability Backstop Auction and Expedited Interconnection Track that effectively exclude storage and renewable energy.  
• Continuing to progress transparent and consistent load‑forecasting reforms to improve planning and avoid overspending.
• Conducting a holistic review of PJM’s market structure to prioritize customer interests and long‑term reliability over generator profits.

“State legislators are on the front lines of responding to the impacts of rapid data center growth, and it is important that PJM takes a balanced, transparent approach that protects the communities we represent,” said Maryland State Delegate Lorig Charkoudian. “We’re asking PJM to ensure that all resources — including renewables and storage — can compete fairly, and that ratepayers aren’t forced to shoulder the costs of data center expansion.”

The legislators emphasize that states are already advancing policies to manage the impacts of large load growth — from separate tariffs and load flexibility programs to transparency requirements and air and water quality protections. They close by reaffirming their commitment to working with PJM to ensure that market reforms protect ratepayers and promote energy development.

The letter was spearheaded by Maryland State Delegate Lorig Charkoudian, and the full letter is available here: https://www.ncelenviro.org/app/uploads/2026/02/Response-to-PJMs-CIFP-Large-Load-Addition-Decisional-Letter.pdf

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About NCEL: Created by and for state legislators, the National Caucus of Environmental Legislators is a 501(c)(3) nonprofit that organizes over 1,300 environmentally-committed state legislators from all 50 states and both parties. NCEL provides venues and opportunities for lawmakers to share ideas and collaborate on environmental issues.