Grid Emergency Measures Shift Toward Permanent Operations

Photo by: Joe Sohm/Visions of America/Universal Images Group via Getty Images)

Universal Images Group via Getty Images

On July 2, PJM, the grid operator that supplies electricity to 65 million people across 13 states, recorded an all‑time peak demand of 168,158 megawatts during one of the hottest days ever observed. To maintain reliability, PJM invoked rarely used Section 202(c) emergency authority under the Federal Power Act, which allows it to shift data centers onto backup generators and permits power plants to exceed standard emissions limits.

What was once an exceptional tool is now being called upon with increasing frequency. Since January, PJM has requested the emergency order three times, and nationally it has been used 43 times in the last 14 months—more than double the total usage over the previous nearly five decades. As demand continues to outstrip supply, these emergency actions are moving from a temporary fix to a routine aspect of grid operations, raising the question of what a true backup plan might look like.

From Exceptional Measure to Standard Practice

The emergency order normally instructs utilities to keep aging power plants online beyond their planned retirement dates. On January 22 2026, Secretary Chris Wright broadened the order’s scope, granting authority to direct large customers—such as data centers—to switch to their own backup generators during crises. Many of these generators are diesel units intended for rare emergencies rather than regular grid balancing.

Reasons Behind the Rising Use of Emergency Authority

The bulk of the added strain on Virginia’s grid stems from data‑center growth. Favorable zoning and tax policies have turned the state into a national hub for data‑center infrastructure, with Northern Virginia alone hosting more capacity than the next five largest U.S. markets combined.

Dominion Energy, which serves the majority of Virginia, provides power to roughly 450 data centers. It faces a 70‑gigawatt interconnection queue—a figure that far exceeds its historic system peak of 24.7 gigawatts. About 25 gigawatts of the requested new load have scheduled connection dates extending through 2031, while the remaining 45 gigawatts are still under review.

Beyond Demand: Supply Constraints and Aging Infrastructure

The grid is experiencing demand growth at a pace that existing supply cannot match. Much of the current generation fleet is aging and past its design life, while new generation projects require years for permitting and construction.

Extreme heat not only spikes demand but also accelerates wear on older equipment, leading to forced generation outages. During the July 4 weekend, forced outages ranged from 18,100 to 19,400 megawatts, well above the typical 12,800‑megawatt average.

High temperatures commonly trigger these unexpected failures: transformers overheat, cooling water becomes too warm to function efficiently, and aging units under continuous load suffer mechanical breakdowns. The Eddystone units in Pennsylvania illustrate this issue—its two 380‑megawatt natural‑gas/oil units, installed between 1967 and 1970, have been repeatedly ordered by the DOE to remain online past their retirement dates. These units are emblematic of a broader fleet constructed more than fifty years ago.

Setbacks in Renewable Expansion

Building new generation capacity takes years of planning, permitting, and construction. In March 2026, the federal government paid TotalEnergies $928 million to cancel two offshore wind leases, including a project that would have contributed 1,342 megawatts to PJM by 2031. Although this cancellation does not affect near‑term supplies, it was poised to shape future capacity prices.

Financial Impact

PJM’s capacity price—the amount utilities pay to secure future generation—rose from just under $29 per megawatt‑day in the 2024/2025 auction to nearly $270 in 2025/2026. According to PJM’s independent market monitor, Monitoring Analytics, data‑center demand accounted for 63 % of that increase. The subsequent auction pushed the price above $329 per megawatt‑day for 2026/2027, marking the market’s price cap for a second straight year.

Environmental and Public Health Consequences

Operating aging power plants and backup generators meant for rare emergencies carries a second cost: degraded air quality. Northern Virginia hosts more than 9,000 backup generators capable of supporting data centers. Historically, permitting for these units was lenient given their infrequent use. However, Virginia’s environmental regulator is now tightening emissions standards for any generator permit submitted on or after July 1 2026. Because most of these generators run on diesel, they emit pollutants that affect nearby communities living close to data‑center campuses.

The Emerging Normal Operating Mode

Emergency orders designed for rare events are becoming a permanent tool as electricity demand continues to exceed supply. Data‑center consumption keeps rising, and grid pressure follows suit. While operators ask what a genuine backup plan might be, the reality is that the current emergency measures are already the de‑facto plan. Much of the generation keeping the lights on today is operating years beyond its intended service life. Until the grid can better manage load, data centers voluntarily curtail usage, or new supply comes online, reliance on emergency power will remain the standard approach rather than a contingency.

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