Permitting Delays Could Drive Up PJM Power Costs by $100 Billion

WASHINGTON, May 13, 2026 – Delays in permitting and generator interconnection approvals are driving up electricity costs and slowing the buildout of new power generation needed for rising AI-driven demand, according to a study presented Tuesday.

The analysis modeled multiple buildout scenarios for the PJM electricity market over a 20-year period using a high-load-growth demand forecast tied to artificial intelligence, data centers, electrification, and advanced manufacturing.

Researchers estimated the most constrained scenario increased system costs by roughly $100 billion after accounting for energy, ancillary services, demand response, and unserved energy costs.

The PJM market has already faced pressure from the White House and governors to boost power supplies and limit electricity price increases tied to data center demand.

Timing emerged as a central issue throughout the report, with electricity demand projected to accelerate sharply through the late 2020s and early 2030s.

The study found delays in bringing new firm generation online created reliability gaps and forced grid operators to rely longer on older, less-efficient power plants.

Researchers compared an unconstrained buildout scenario against futures limited by interconnection queue delays and broader permitting constraints.

“If we don’t do that, we will have a less reliable, less affordable, less competitive and paradoxically higher-emissions future,” said Will Polen, senior director at the United States Energy Association.

The constrained scenarios also shifted the market toward less-efficient single-cycle natural gas generation because electricity demand grew faster than new firm generation could be deployed, according to the analysis.

Polen said the most constrained scenario projected periods of unserved energy beginning around 2036.

The report also found permitting delays increased carbon emissions despite faster early deployment of renewable energy.

“We will do what we need to do to keep the lights on,” said Rob Homer, head of solutions, government affairs and public policy at Energy Exemplar.

Homer said grid operators would likely rely longer on older fossil fuel plants if new firm generation capacity cannot be deployed quickly enough to meet rising demand.

The model focused primarily on generation infrastructure and did not fully incorporate transmission constraints, though researchers said future analyses could expand into transmission and nationwide scenarios.