PJM, operator of the nation’s largest wholesale power market, announced in April plans to procure nearly 15 GW of generating capacity to support the region’s rapidly expanding network of data centers. The initiative is intended to address a growing supply shortfall that has already pushed PPA prices to record highs, though some observers question whether the program can meet its target. PPA Fair Values were largely unchanged following the announcement.
The initiative, dubbed the Reliability Backstop Procurement (RBP), is the latest extraordinary measure by PJM to fast-track new capacity and address a supply shortfall that could reach up to 60 GW over the next decade. If successful, the program could incentivize new generation and help cap energy prices, and by extension, the power forwards that underpin PPA valuations.
So far, however, market reaction has been muted. Ten-year solar PPA valuations in PJM’s benchmark Western hub remain above 90 USD/MWh, close to the 95 USD/MWh record set in the fall of 2025.
Moreover, some stakeholders have voiced skepticism about PJM’s ability to procure sufficient new capacity.
“Less than 5 GW of gas and battery storage in PJM’s interconnection queue have reported plans to commission before the [RBP’s 1 June 2031] deadline,” analysts at CBRE said in an 15 April research note. “Some of these projects may also face delays due to well-documented equipment shortages.”
During the first phase, running from September 2026 through March 2027, data centers and utilities will negotiate contracts directly with new generators. PJM will then lead a central procurement in March 2027 to cover any remaining shortfalls. Resources committed in this second stage will be required to offer into capacity auctions at 0 USD/MW. Eligible projects must have the necessary grid upgrades in place and be able to come online by 1 June 2031.
CBRE, however, said it expects the bulk of the available capacity to be procured in the first phase, leaving little, if any, for the second phase and therefore limiting any downward pressure from additional supply in the annual auction. Continued supply limitations are also expected to sustain upward pressure on prices.
The RBP builds on earlier initiatives, including the Reliability Resource Initiative, which targets 8 GW of new capacity, and more recently the Expedited Interconnection Track, designed to bring up to 20 projects online over two years.
PJM acknowledged that the RBP is just one small step in addressing the market’s massive power demand.
“PJM is viewing the Reliability Backstop Procurement as a one-time, transitional procurement of capacity designed to begin to address the unprecedented load growth in the region,” PJM said. “It is not a long-term solution to resource adequacy challenges.”
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