Key Takeaways:
It has been a challenging year for PJM Interconnection as it works to manage record-high electricity use driven by data centers, manufacturers expanding operations, and other commercial users.
The regional transmission organization that operates the electric grid across 13 U.S. states and the District of Columbia is responsible for balancing supply and demand for more than 65 million people.
Data centers are expected to drive nearly all of PJM’s forecasted growth in demand over the next five years, according to the Wall Street Observer. Without enough grid capacity, PJM has warned it could see power shortages as soon as 2027.
This increased demand is already impacting power costs, with annual capacity charges increasing by more than 1,000%, and threatening future power reliability.
Across Pennsylvania, Ohio, West Virginia, Illinois, and Indiana, facilities now face increasingly disruptive short-duration power events, including voltage sags, swells, and momentary interruptions. PJM’s capacity and energy price volatility also put organizations at greater financial risk. For critical sectors, protecting operations means addressing both the physical reliability of the grid and the economics of running energy-intensive or interruption-sensitive loads.
Here’s a closer look at the impacts on key sectors and how organizations can protect their operations with a microgrid solution.
Northern Virginia and adjacent PJM zones face dense data center growth, while new campuses in Ohio, Pennsylvania, and Maryland add to concentrated demand that affects PJM peaks and capacity obligations. Data center operators need mission-critical uptime and tools to manage their grid impact.
To address these urgent needs, PJM is finalizing a new plan specifically for data centers, though the details haven’t been finalized. In Texas, ERCOT is addressing similar grid reliability issues with Senate Bill 6, which gives them the authority to disconnect or curtail data centers or large power users when the grid is under extreme stress.
Virtual Utility® is specifically designed to address the challenges of both data centers and grid operators by delivering UPS-grade, on-site power. With natural gas power generation and fast-discharge battery energy storage system, it’s capable of operating with the grid or independent of it, enabling data centers to guarantee reliability while also participating in demand response incentives.
Short-duration voltage events and unplanned shutdowns can cost manufacturers hundreds of thousands (or more) per incident in scrap, equipment damage, long restarts, and safety exposures. Many plants also contend with aging distribution infrastructure while corporate decarbonization targets push for lower-emitting operations.
Some manufacturers have tried to address these issues with distributed energy resource management, using a combination of utility power along with wind, solar power and microgrids.
Now, with the Federal Energy Regulatory Commission easing restrictions on connecting these resources for PJM customers, they will have more flexibility to diversify their energy supply.
Virtual Utility is a turnkey microgrid solution that improves power quality by eliminating voltage sags and surges and lowers emissions without requiring an interconnection agreement.
The PJM region experienced several severe weather events with widespread impact this past year, from dozens of tornadoes across the Mid-Atlantic in May to a prolonged heatwave in June that led to the RTO issuing multiple emergency and load management alerts.
As the year ended, a bomb cyclone blasted parts of Michigan, Pennsylvania, Washington, D.C. and other areas with lake effect snow, frigid temperatures, and wind gusts up to 65 mph.
While no major outages were reported, these events have the potential to compromise grid reliability with disastrous consequences for residents, including those in multi-family housing units. When long-term outages occur, residents can be displaced and insurance premiums rise.
On-site power solutions can help owners of multi-family facilities ensure reliability for tenants while also reducing costs through peak shaving and other utility rate incentives.
Hospitals, research campuses, and labs in PJM states must meet strict requirements and have life-safety loads that cannot tolerate any disruption. Diesel-only backup often is not scalable for full campuses or feasible long-term, due to permitting and fuel logistics issues.
Microgrid solutions provide reliable, uninterrupted backup coverage across campuses. Virtual Utility is powered by the R3Di® System, a natural gas-fueled power generation and battery storage system for extended events, helping healthcare facilities protect patients and meet compliance obligations.
Major logistics hubs in New Jersey, Pennsylvania, and Ohio depend on cold chains, automation, and 24/7 operations that are sensitive to both outages and power quality. PJM price volatility and capacity charges can significantly impact operating costs, making budgeting difficult.
The R3Di® System can operate as prime power for distribution centers, ride through grid events, and be sized to support EV truck or yard charging while reducing exposure to peak-driven capacity charges.
City utilities, water systems, transit services, and universities juggle tight budgets, high reliability expectations, and climate commitments, often without in-house engineering resources capable of designing complex onsite systems.
With a turnkey microgrid solution, they can manage their energy needs while participating in PJM markets, shifting risk from public operators to an integrated partner.
e2Companies’ Virtual Utility offers the benefits of having your own local utility coordinated with PJM so you can achieve greater energy choice while supporting the grid, rather than fighting it.
It’s powered by the R3Di® System, which combines natural gas-fueled generation with fast-discharge batteries in a turnkey unit, starting at 1 megawatt. This enables it to deliver conditioned, uninterruptible power and sustained support for longer events.
The system instantly picks up your facility’s full load if an outage occurs and eliminates power dips and surges and that damages equipment. It integrates easily with solar, wind or other on-site assets.
We use an experienced network operations team and AI-powered energy monitoring software to help your business determine when to use the R3Di System as an alternative to the grid, based on grid performance, market pricing, weather conditions, and your facility’s goals.
With these elements in place, facilities can reduce peak load charges and PJM UCAP charges by as much as 99%, saving hundreds of thousands of dollars annually.
Preparing your facility to cope with PJM’s reliability challenges means more than having backup generators on standby.
Operators need to understand how critical loads behave during disturbances, how PJM peak and capacity charges flow through budgets, and where infrastructure or operational gaps could expose them to unnecessary downtime.
This checklist helps you evaluate your facility’s true exposure and identify where Virtual Utility® could reduce your risks, costs, and timeline constraints.
Across PJM, the grid is changing faster than many organizations can adapt.
Voltage sags, momentary outages, and severe weather events are occurring more frequently against a backdrop of rising demand and a rapidly changing mix of power generation.
For critical facilities, the convergence of pressures turns energy reliability into a daily concern.
This challenge also comes with an opportunity. Modern on-site systems can stabilize operations, lower risk, and provide new revenue opportunities from PJM markets. Virtual Utility is an innovative solution that lets facilities operate with the assurance of conditioned, uninterrupted power while improving cost control and supporting decarbonization goals.
Schedule a discovery call to see what this could look like for your facility.
We’ll help you assess reliability risks, model site-specific microgrid solutions, and build a roadmap that strengthens your operations.