The Federal Energy Regulatory Commission accepted much of PJM Interconnection's proposal but suspended the plan for five months to review issues around payment structure.

  • PJM proposed a one-time procurement to cover a 6,831-megawatt capacity shortfall identified after its 2028/2029 capacity auction.
  • PJM can submit a revised proposal addressing the concerns.
  • The operator coordinates the wholesale electricity grid serving about 67 million people across 13 states and Washington, D.C.

Shares of Constellation Energy (CEG), NRG Energy (NRG) and Talen Energy (TLN) fell on Wednesday after federal regulators delayed a crucial plan to secure more power for the largest U.S. electricity grid amid surging AI data center demand.

At the time of writing, CEG shares were down 4.2% to their lowest level in over two months, NRG shares fell to their lowest level in over 17 months, while TLN edged 0.5% lower.

On Tuesday, the Federal Energy Regulatory Commission (FERC) accepted much of the proposal from the Pennsylvania-New Jersey-Maryland Interconnection (PJM) Interconnection, the largest U.S. power-grid operator, but suspended the plan for five months, until Feb. 28, 2027, while it reviews unresolved issues.

TD Cowen analyst John Miller said the decision further delays the procurement and creates “renewed (and acute) uncertainty” for companies involved.

What Is PJM’s Plan?

PJM coordinates the wholesale electricity grid serving about 67 million people across 13 states and Washington, D.C. Its region also contains a large concentration of U.S. data centers, which are driving rapid electricity-demand growth.

PJM proposed a one-time procurement to cover a 6,831-megawatt capacity shortfall identified after its 2028/2029 capacity auction. The plan could offer contracts lasting up to 15 years to encourage new generation to enter the market.

While the FERC agreed that PJM urgently needs additional generation, it questioned how the costs would be divided among customers. FERC also raised concerns around collateral and rules governing projects that leave the program.

PJM can submit a revised proposal addressing the concerns.

Why CEG, NRG And TLN Are In Focus

Constellation, NRG and Talen all own substantial power-generation assets exposed to the PJM market, making changes to capacity prices and new-generation procurement important to their earnings opportunities.

Constellation and Talen were involved in discussions about how PJM could design the backstop plan, with both companies participating in groups proposing alternative approaches.

Retail Sees Buying Opportunity In CEG

Retail sentiment surrounding CEG, NRG, and TLN on Stocktwits was all trending in the ‘neutral’ zone.

One user said it’s time to build a position on CEG because “electricity will be in high demand for years to come.”

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CEG shares have declined 31% so far this year, NRG has slumped more than 42%, while TLN has shed around 21%.

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