PJM power grid activates federal emergency protocols as heat wave pushes demand to near all-time record.
PJM Interconnection, the largest power grid operator in the United States, activated emergency electricity-reduction programs on Friday as it battled generator outages, overloaded transmission lines, and surging air-conditioning demand during a prolonged heat wave across the eastern half of the country. The grid, which serves 67 million people across 13 states and Washington, D.C., came within striking distance of its all-time demand record.
Peak instantaneous load on Thursday reached approximately 163 gigawatts, just below the 165,563-MW record set nearly 20 years ago in 2006. Wholesale spot electricity prices in the Mid-Atlantic and Northern Virginia—home to the world's largest concentration of data centers—surged beyond $2,500 per megawatt-hour, compared with roughly $40/MWh under normal conditions.
The U.S. Department of Energy issued two emergency orders under Section 202(c) of the Federal Power Act, authorizing PJM to push power plants past normal pollution limits and, as a last resort, force large data centers onto backup generators during peak hours. It marked the third time in 2026 that federal emergency authority has been invoked for PJM's territory.
Energy Secretary Chris Wright signed two emergency orders effective from 11:59 p.m. EDT on June 30 through 11:59 p.m. EDT on July 3. The first authorized PJM to direct transmission owners to curtail data centers and other large customers with at least 50 megawatts of peak load, requiring them to switch to backup generators within 15 minutes of an emergency signal. Hospitals, 911 call centers, water treatment plants, air traffic control towers, and defense facilities were exempted. The second order directed PJM to dispatch specified generating units and granted temporary relief from environmental permit restrictions on sulfur dioxide, nitrogen oxide, and other emissions—allowing power plants to run at maximum output beyond normal limits.
PJM also recalled generating units from maintenance, issued Maximum Generation and Load Management Alerts, and placed a Low Voltage Alert into effect. The grid operator notified neighboring regional grids that electricity exports would be curtailed. Hot weather alerts remained in effect through Saturday region-wide and through Sunday for the Mid-Atlantic and Dominion zones.
The electricity price spike was concentrated in Northern Virginia's Dominion transmission zone, where temperatures approached 100°F and data center density is the highest in the world. Day-ahead power topped $2,000/MWh in parts of the system on Thursday, and the PJM Western Hub benchmark settled at $1,222.75/MWh—nearly triple comparable peaks from last summer. Operating reserves dropped to 5,091 MW from 10,996 MW as the grid strained to meet demand. Despite the crisis conditions, PJM avoided rolling blackouts, and the emergency alerts did not require action from residential customers.
Among publicly traded utilities and power generators operating in PJM's territory, Dominion Energy rose 2.9% to $69.75 and Exelon gained 3.5% to $47.88 in Thursday trading, while independent power producers Vistra and NRG Energy fell 1.4% and 2.9%, respectively.
The emergency underscored how rapidly growing data center demand—driven by the buildout of artificial intelligence infrastructure—is straining the nation's power grid. PJM's own projections show peak demand will grow by 32 gigawatts between 2024 and 2030, with all but 2 gigawatts of that increase attributed to data centers. The independent market monitor tied 63% of PJM's capacity cost increases to data center demand. Capacity auction prices have surged more than 11-fold to a record $333.44 per megawatt-day from $28.92 just three auctions prior, representing approximately $9.3 billion in additional ratepayer costs.
During last week's peak, natural gas supplied 44% of PJM's generation mix, nuclear 20%, coal 19%, and solar 6%.
The July crisis was not an isolated event. The DOE has issued 34 Section 202(c) emergency orders across U.S. grid operators in 2026 alone—spanning PJM, ERCOT in Texas, ISO-New England, NYISO, MISO, and utilities in the Southeast and Puerto Rico. PJM has received the most orders of any single grid operator, including interventions during a January cold snap and a May heat and maintenance squeeze.
Other grid operators faced simultaneous pressure during the July heat wave. New York's grid operator requested customer conservation during peak hours, while the Midcontinent Independent System Operator monitored similar demand pressures across 15 Midwest and Southern states. Heat indices reached 110°F in New York City, 112°F in Philadelphia, and 113°F in Washington, D.C.
PJM's hot weather alerts for the Mid-Atlantic and Dominion zones extend through Sunday, and the broader heat wave affecting 160 million Americans across 30 states shows little sign of abating through the holiday weekend. The repeated resort to federal emergency powers has intensified debate in Washington over data center siting, grid reliability standards, and whether the pace of AI-driven electricity demand growth is compatible with current infrastructure and generation capacity. PJM's capacity auction results and the escalating frequency of 202(c) orders are expected to feature prominently in upcoming FERC proceedings on grid reliability and resource adequacy.