Grid Transformation
Grid Transformation encompasses changes to generation and load profiles that introduce complexity to the Bulk Power System (BPS). Policy changes have accelerated the retirement of conventional generation and supported growth in variable resources such as wind, solar, and battery storage.
Within the ReliabilityFirst (RF) footprint, coal retirements have resulted in an increased reliance on natural gas resources that may be susceptible to fuel supply disruptions during extreme cold weather events. At the same time, rapidly expanding load associated with data centers has created further uncertainty in resource adequacy, planning, and operations. The combination of rising demand driven by computational loads, reliance on natural gas resources, inverter-based resource variability, limited battery storage capability, and transmission constraints has increased the risk of resource shortfalls and operational stress during peak demand and extreme weather conditions. For the 2025-26 RRA, grid transformation received a high risk score.
Federal and state policies
Policies at the federal and state-level are reshaping the generation fleet. RF is tracking and analyzing these policies to better understand their potential impact on the BPS. RF serves as a technical resource to state commissions and policymakers on the emergent reliability risks associated with grid transformation.
State clean and renewable energy goals
There are multiple states within the RF footprint (such as Delaware, Illinois, Maryland, Michigan, New Jersey, Virginia, and Wisconsin) that have enacted clean energy initiatives to reduce greenhouse gas emissions by 2050 or earlier. These policies have shifted the resource mix away from conventional generation resources and toward inverter-based resources (i.e., wind, solar, and battery).
State computational load initiatives
Large loads associated with data centers have emerged as a highly publicized, prominent issue within RF’s territory. Several states, including Ohio, Indiana, and Virginia have recently taken legislative or regulatory action to address risks associated with the rapid growth of computational load to the BPS.
Federal energy policies
Offshore wind
In January 2025, the Trump Administration issued a memorandum announcing the temporary withdrawal of all areas on the outer continental shelf from offshore wind leasing. This action has largely halted permitting, loans, and lease approvals for wind projects on federal waters. In July 2025, the Bureau of Ocean Energy Management (BOEM) rescinded all Wind Energy Area designations on the U.S. Outer Continental Shelf, removing federal designation from over 3.5 million acres identified for potential offshore wind development. While these actions are being litigated, projects in various development stages face uncertainty.
One Big Beautiful Bill Act
The One Big Beautiful Bill Act was signed into law on July 4, 2025. This legislation spans multiple policy areas, including significant changes to subsidies like energy-related tax incentives that were originally established under the Inflation Reduction Act (IRA).
Subsidies for new advanced nuclear technologies, such as small modular reactors, remain intact but begin phasing out after 2032. Battery storage and geothermal technologies retain subsidies for projects that commence construction by the end of 2033.
Reliability 202(c) Orders
The April 2025 Executive Order titled “Strengthening the Reliability and Security of the United States Electric Grid” established a methodology for analyzing reserve margins to determine which generation resources should be prevented from retiring or changing fuel types due to potential grid reliability concerns. The order also authorized the use of emergency actions under Section 202(c) of the Federal Power Act to expedite the approval of orders allowing electric generation resources to operate at maximum capacity during times of anticipated grid failure.
The order’s provisions were regularly exercised in 2025, with multiple Section 202(c) emergency orders issued to keep roughly 4.2 GW of generation online within the RF footprint. In 2026, the 202(c) emergency orders have also been used for large computational loads within the PJM footprint ordering backup generation resources to operate as a last resort before declaring an Energy Emergency Alert 3 (EEA 3).
Within the RF footprint, resources operating under Section 202(c) emergency orders have performed largely in line with their historical availability and forced outage rates, except for one unit impacted by a major turbine blade failure.
Overall, plant performance in these cases has been satisfactory to address perceived resource adequacy needs.
Resource & demand trends
RF’s 2026 Resource Adequacy Report provides analysis and information related to resource growth and retirements, demand forecasts, and resource adequacy within the RF footprint. Some of the key findings are highlighted below.
Resource retirements
RF assessed year-over-year net capacity changes in PJM and MISO accounting for confirmed generator retirements and the portion of queued capacity expected to materialize. For 2026-2035, PJM projects a net reduction of approximately 4 GW of coal, natural gas, and petroleum capacity, with up to 41 GW of potential unconfirmed retirements. Over the same period, MISO anticipates a significantly larger net reduction of about 23 GW, driven primarily by coal retirements totaling roughly 17 GW.
Resource growth
PJM’s temporary fast-track interconnection process, Reliability Resource Initiative (RRI), includes approximately 12 GW of planned resources, with natural gas as the dominant fuel type. As shown in Figure 6, according to NERC’s 2025 LTRA, PJM has 74 GW of potential renewable and storage resources in its interconnection queue, primarily comprised of solar, wind, hybrid, and battery resources. While recent analysis indicates that only about 10% of projects in interconnection queues will successfully come online in the next three years, the natural gas resources in the fast-track process and renewable resources in the interconnection queue could significantly alter the overall resource mix.
Figure 6. PJM Existing, Planned, and Queued Renewable Capacity (2025-2035)
Figure 6. PJM Existing, Planned, and Queued Renewable Capacity (2025-2035)
MISO’s temporary fast-track interconnection process, Expedited Resource Addition Study (ERAS), which includes nearly 70 projects with approximately 30 GW of proposed resources, is dominated by natural gas projects. As shown in Figure 7, according to NERC‘s 2025 LTRA, MISO has 31 GW of potential renewable and storage resources in its interconnection queue. Most of the growth is expected to occur in wind and solar capacity additions. Even with these expected changes in the resource mix, natural gas remains the prevalent fuel source in MISO.
In both PJM and MISO, the development of hybrid and battery resources has the potential to mitigate resource variability risks associated with the rapid expansion of solar and wind. In the RF footprint, projected solar growth remains strong, while battery development continues to lag compared to other regions.
Figure 7. MISO Existing, Planned, and Queued Renewable Capacity (2025-2035)
Figure 7. MISO Existing, Planned, and Queued Renewable Capacity (2025-2035)
Resource availability
Although PJM and MISO report large amounts of nameplate capacity for solar, wind, and battery resources, the capacity available during critical system conditions can differ widely. PJM applies an Effective Load Carrying Capability (ELCC) methodology that reflects expected generator performance during stressed system conditions. MISO relies on accredited capacity values and seasonal adjustments that typically yield lower availability relative to nameplate capacity.
PJM and MISO both project substantial solar and wind nameplate capacity over the next decade, though the installed capacity values are significantly reduced for wind and solar technologies (see Figure 8). This variability increases operational complexity, driving the need for improved weather and resource forecasting, enhanced operator awareness, and the availability of dispatchable resources. Coupling these additions with battery storage technologies, which respond to rapid system disturbances by bridging resource gaps, can further enhance overall BPS reliability.
Figure 8. PJM, MISO Solar and Wind Installed vs. Nameplate Capacity (2025-2035)
Figure 8. PJM, MISO Solar and Wind Installed vs. Nameplate Capacity (2025-2035)
Changes in demand
Over the next decade, PJM projects a 42% increase in summer peak demand (rising from 156 GW to 222 GW), while MISO forecasts a more moderate 15% increase (rising from 125 GW to 144 GW). Bloomberg NEF expects U.S. data center electricity consumption to nearly triple during this time. Much of the growth will be concentrated in PJM areas of Virginia, Illinois, Ohio, and Pennsylvania, with a smaller but notable increase in MISO’s territory. Demand forecasts for both PJM and MISO reflect computational load growth as a key driver of system demand.
The rapid acceleration in total system demand across the RF footprint is a notable shift from the historically modest growth forecasts of previous years. RF is closely monitoring near- and long-term load forecasts to identify potential risks where demand could outpace available resources. As mentioned throughout this report, this increase is driven largely by the expansion of data centers, which introduces greater uncertainty in resource adequacy assessments, system planning, and operational decision-making across both PJM and MISO.
Resource adequacy performance
Each assessment area within RF (i.e., PJM and MISO) has a targeted reserve margin level, which identifies the number of megawatts needed to meet a loss of load expectation (LOLE) of one day in 10 years. Deterministic analysis performed in RF’s 2026 Resource Adequacy Report concluded that PJM and MISO have an increased risk of not meeting targeted reserve margin levels over the next five years depending on the status of unconfirmed retirements, demand forecast accuracy, and the timely interconnection of queued generation.
In 2025, FERC approved PJM’s Reliability Resource Initiative (RRI) to accelerate shovel ready generation projects of approximately 12 GW of proposed resources. MISO proposed a similar Expedited Resource Addition Study (ERAS) process to provide more energy availability of approximately 30 GW of proposed resources. RF will continue to monitor federal and state policy developments, as well as PJM and MISO changes, to assess their impact on BPS reliability.
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