FERC Rejects Waiver for $2B Gas Plant in PJM's Fast-Track Queue
The ruling blocks Advanced Power Services from modifying its Chestnut Run project within PJM's accelerated interconnection process, complicating one of the region's larger proposed dispatchable additions.
The Federal Energy Regulatory Commission on Thursday (2026-07-02) rejected a waiver request from Advanced Power Services that would have allowed the company's roughly $2 billion gas-fired project to remain in PJM Interconnection's fast-track Reliability Resource Initiative review process under modified terms. The Boston-based independent power producer, backed by ArcLight Capital Partners, had sought regulatory flexibility to adjust the project's output parameters within the accelerated queue. FERC declined.3
The ruling came roughly a week after PJM itself told federal regulators it opposed granting the waiver. The grid operator's position left Advanced Power Services with little room: without relief from the commission, the project must either comply with interconnection rules as originally configured or forfeit its fast-track slot.2
PJM's Reliability Resource Initiative was designed to give priority review to generation projects capable of demonstrating near-term reliability value — a fast lane for capacity the grid operator considers essential to meeting regional demand. The flip side is stricter adherence requirements once a project enters the queue. PJM argued that allowing a developer to revise key project specifications mid-process would undermine the integrity of that framework, and FERC agreed.2,3
At roughly $2 billion, the Chestnut Run project represents a meaningful addition to PJM's dispatchable fleet at a time when the thirteen-state grid is under sustained pressure to secure firm capacity. Data center load growth across the mid-Atlantic corridor has sharpened projections for peak demand, and regulators have been fielding an expanding backlog of interconnection requests. A project of this scale losing its fast-track position is not a small development.3
The underlying economics for new gas-fired generation in PJM are also under scrutiny. NYMEX Henry Hub front-month gas was at $3.24 per million British thermal units on Monday (2026-07-06), with PJM Western Hub spot power at $42.83 per megawatt-hour. Those reference points, combined with interconnection cost uncertainty, present real obstacles to project financing for units that may not reach commercial operation for several years.1
Spark spreads — the margin between electricity prices and the gas cost of generation — are the key metric developers use to assess viability. EIA data for MISO, the neighboring central grid, showed spark spreads averaging $9 per megawatt-hour in the first four months of 2026, up 15% year-on-year. Yet that improvement was compressed by a 63% rise in natural gas prices from 2024 to 2025, which largely offset gains in power prices across the region.1
Coal's economics told a different story. Dark spreads in MISO averaged $28 per megawatt-hour in the first four months of 2026, up 39% year-on-year, as coal prices rose just 3% from 2024 to 2025 while electricity prices increased 44%, according to EIA data. That relative insulation from fuel cost inflation has pushed some central-grid operators to extend coal plant life, narrowing the market gap that new gas projects had been counting on.1
Advanced Power Services can appeal FERC's ruling, withdraw the project from the RRI queue, or seek re-entry through a standard interconnection pathway — each option carrying significant time and cost penalties. An RRI slot vacated by the company would likely be reallocated to other projects queued behind it.
The ruling reinforces a harder line from PJM on queue discipline at a moment when technology firms and data center developers have been pushing FERC aggressively for faster grid access. Thursday's (2026-07-02) decision signals that fast-track status in PJM's interconnection process carries real obligations — and that commission relief from those obligations will not come easily once a project has committed to the process.3,2