The power grid serving over 65 million people across the Midwest and East Coast (PJM) is entering a period of tighter operating margins.

While summer demand is expected to peak at 155.1 gigawatts — a 1.7% increase from last year — extreme conditions could push demand to 166 gigawatts or beyond. In this environment, reserve capacity may fall short just when it’s needed most.

The deeper issue: generation retirements are outpacing new additions. Over the past year, 8.5 GW of capacity was retired, while only 6.0 GW came online. This growing imbalance is shrinking system flexibility and increasing the risk of supply shortages, price volatility, and emergency grid actions like demand curtailments.

From Oversupply to Uncertainty: PJM, once an oversupplied market, is shifting into a structurally tighter environment. Aging infrastructure, slow permitting, and rising electrification are compounding the challenge — making long-term reliability a growing concern for large energy users.

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