PJM Blocks Fast-Track Waiver for $2B Gas Plant as Interconnection Bottleneck Widens
The grid operator's opposition to Advanced Power's turbine-swap request tests whether the Reliability Resource Initiative can deliver promised capacity.
PJM Interconnection told federal regulators on Monday (2026-06-29) that it opposes a waiver request from Advanced Power Services that would allow the company to keep its roughly $2-billion, gas-fired Chestnut Run project inside the grid operator's fast-track interconnection review. The opposition, filed with the Federal Energy Regulatory Commission, sets up a regulatory dispute over one of the largest gas-fired projects in the PJM queue at a moment when the mid-Atlantic and Midwest grid faces rising load from data centres and industrial customers.5
The Reliability Resource Initiative was designed for shovel-ready projects. It initially drew 51 proposals totalling about 11.8 GW — developers who committed, in theory, to meeting tighter milestones in exchange for priority review. Advanced Power, owned by ArcLight Capital Partners, is now asking to substitute a GE Vernova HA.02 turbine for the originally specified model. The swap would cut maximum output by about 550 MW but, the company argues, allow it to meet something close to its original commercial online date.5
PJM's objection is procedural rather than about the project's merits as a supply source. The grid operator argues the modification falls short of FERC's standards for granting a waiver. Advanced Power pushed back in a June 23 (2026-06-23) FERC filing, saying PJM had failed to demonstrate that conclusion and was ignoring the practical implications of a turbine availability constraint that was outside the developer's control.5
The dispute reflects a broader tension in US power markets. Only 13% of the capacity that submitted interconnection requests between 2000 and 2019 had reached commercial operations by the end of 2024; 77% had been withdrawn, according to data cited in analysis from Utility Dive. The RRI was PJM's attempt to ring-fence a subset of genuinely advanced projects. Whether the waiver dispute disqualifies Chestnut Run from the process — or whether FERC overrides PJM — will shape how seriously developers treat the fast-track designation going forward.2
Grid operators have made measurable progress on interconnection queues in the past two years, an industry group called AEU reported in a review released Tuesday (2026-06-23). But the same report found no evidence yet that actual interconnection timelines are improving. A procedural win for PJM in the Chestnut Run case could reinforce the queue discipline the grid operator has tried to impose; a FERC override could undercut it.4
The scale of what needs to clear that queue is growing. Data centres now account for roughly half of the incremental demand growth in the United States, the International Energy Agency has estimated, with AI-focused consumption rising 50% in 2025 alone. Grid Strategies projected the US data centre market would require 65 GW to 90 GW of additional capacity by 2029. Gas-fired peakers and combined-cycle plants are the technology best positioned to fill capacity gaps on the grid-operator timelines that matter — fast enough to run ahead of any major nuclear or transmission build.2,3
PJM's Western Hub real-time spot price stood at $42.83 per megawatt-hour on Tuesday (2026-06-30). NYMEX Henry Hub front-month fell 0.91% to $3.25/MMBtu on the session, keeping gas-fired generation economics relatively stable. In MISO — the grid immediately to PJM's west — the demand signal was pointing in the opposite direction, with bullish near-term load pressure that has not yet filtered through to PJM's market signals.5
A coal parallel is worth noting. EIA data published in May showed the dark spread — the margin between coal fuel costs and wholesale power prices — remained positive in MISO through the first four months of 2026, meaning coal dispatch was still economic even as gas prices sat below $3.50/MMBtu in that window. Gas-fired additions into PJM would directly compete against that coal stack in the adjacent market, pressing dispatch margins if gas supply expands faster than load.1
FERC's response to Advanced Power's June 23 filing will be the proximate signal. If regulators grant the waiver over PJM's objection, it risks weakening the disciplinary architecture of the RRI at the moment when the fast-track process is most needed. If they deny it and Chestnut Run loses its place in the queue, roughly 1.45 GW of gas-fired capacity could shift to the standard interconnection process — adding months or years to its timeline and removing it from near-term PJM capacity auctions.5