Federal electricity regulators on Tuesday approved a proposal from the nation’s largest electric grid operator that could effectively give new natural gas power plants priority in connecting to the grid over renewable energy sources like solar and wind.
The decision, by the Federal Energy Regulatory Commission, comes as the United States faces the prospect of the largest increase in electricity demand in recent decades. Technology companies are building hundreds of energy-hungry data centers across the country to power artificial intelligence models and other services.
The ruling represents a win for companies involved in extracting natural gas and burning it to generate power — a group that strongly supported President Trump during last year’s election. Environmental groups and renewable energy developers criticized the decision by the five-person commission, which has a Republican chairman but a Democratic majority.
The commission said it was approving the plan because it “reasonably addresses” a potential shortfall in the supply of power as demand for electricity increases.
“The proposal neither mandates nor prohibits the development of any particular generating facility, and it neither authorizes nor requires the adoption of a specific mix of generation resources,” the commission said in approving the proposal from PJM Interconnection, which runs the country’s largest electric grid, serving 65 million people in 13 states including Illinois, Pennsylvania and Virginia.
Many electric utilities and grid operators have been arguing that the country needs more natural gas power plants, saying they can provide electricity more reliably throughout the day than wind and solar farms that are more dependent on weather conditions.
The plan approved by the energy commission will allow PJM to give 50 new power plants a priority in securing a connection to its grid based on the plants’ size and ability to provide electricity around the clock.
“Basically, it’s opening a window to allow projects — the high-reliability projects that can be built quickly — come online and help us address the short-term reliability issue,” said Jeffrey P. Shields, a spokesman for PJM.
In practice, analysts said, the proposal will give natural gas plants a leg up over wind and solar projects.
The plants that receive priority are “most likely going to be natural gas projects,” said Patrick Finn, a senior analyst at Wood Mackenzie, an energy consulting firm. “On a national level, we really haven’t had to deal with demand growth and its impacts on the grid in decades.”
Renewable energy developers and environmental groups said the 50 new power plants “would jump the queue” and prolong the yearslong wait that new wind turbines and solar farms typically encounter when they try to join PJM and other regional electric grids.
“PJM is not supposed to put its finger on the scale,” said Megan Wachspress, an environmental lawyer at the Sierra Club.
Some developers said PJM’s proposal could lead to cost increase and derail their projects. That is because plants given priority will take up grid capacity that renewable developers had hoped to use. New suppliers of electricity to the grid are often required to pay for upgrades if their addition might strain the network.
“PJM could torpedo existing projects while setting up new projects to fail,” said Evan Vaughan, the executive director at the Mid-Atlantic Renewable Energy Coalition, whose members include developers of wind, solar and battery projects.
As the political wind shifts in Washington and electricity demand soars, utilities and grid operators around the country are delaying their transition to clean energy and increasingly leaning on fossil fuels.
Georgia Power, which serves nearly three million customers in the South, said in January that it would delay the retirement of some coal and gas power plants into the late 2030s. Talen Energy is also keeping coal and oil power plants online until 2029, four years longer than its previous plan. At least two grid operators, Southwest Power Pool and the Midcontinent Independent System Operator, are considering similar proposals to PJM’s.
Timothy Fox, a managing director at the consulting firm ClearView Energy Partners, said the daunting task of transitioning away from fossil fuels in the power sector had become more difficult with the recent surge in power demand. Renewables gained traction as their prices fell lower than those of fossil fuels, he said, but regulators and utilities are now more concerned about grid reliability.
“It’s a lot easier to green up the grid when you’re not growing,” Mr. Fox said. “The U.S. is facing a significant power demand — the question is just how much.”
