Why are federal officials considering breaking up PJM Interconnection LLC?

Federal officials are considering breaking up PJM Interconnection LLC because soaring power bills and surging electricity demand—driven largely by AI data centers—are straining the grid across its 13-state region, pushing wholesale power prices up 76% year-over-year and capacity costs up nearly 400%, while regulators, states, and utilities criticize PJM for slow approval of new power plants and warn that its inability to ensure future supply and affordability threatens U.S. AI leadership and national security.

What specific actions have been proposed or taken in response to PJM's challenges?

The Federal Energy Regulatory Commission (FERC) has scheduled a July 23 meeting to discuss reforms including changes to PJM’s governance; FERC Chairman Laura Swett warned PJM may need to be split into smaller entities if reform fails; American Electric Power Co. has threatened to leave PJM and merge its transmission assets into another grid; Pennsylvania has threatened to withdraw; and former President Donald Trump, joined by several governors, proposed a one-time electricity auction where tech companies would bid on 15-year capacity contracts to fund new power plants—prompting PJM to announce changes in how data centers and suppliers contract and to accelerate supply procurement.

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Jun 4, 2026

Federal regulators are considering breaking up PJM Interconnection amid soaring electricity prices driven by AI data center demand. Wholesale power prices surged 76% in Q1, triggering political backlash and calls for urgent governance reforms.

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