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NERC winter outlook puts coal back in the frame as data center load tests PJM and MISO
Coal's dispatch economics in MISO have improved sharply while data center growth strains transmission capacity ahead of winter.
ERCOT's grid managers voted on Tuesday (2026-06-02) on rules that would require data centers to register their load and submit to emergency tripping procedures, a measure the state's grid operator says is needed to prevent cascading outages if large facilities disconnect suddenly. The vote came the same day NERC released its winter reliability assessment, which projects a 20.2 GW increase, or 2.5%, in bulk power system capacity compared with last winter's forecast.6,5
The capacity gain looks thin against the demand side of the ledger. The IEA's global energy assessment puts data centers at roughly half of U.S. incremental power demand growth, and NERC's own projections show net internal demand rising faster than supply additions across major assessment areas. Grid engineers, utility executives, and regulators told Quartz the permitting pipeline and transmission queue cannot match the pace of data center buildout.3
The mismatch is most acute where load is growing fastest. The U.S. needs roughly 5,000 miles of new high-voltage transmission, and regional grid operators have already asked FERC for an extension on a deadline to upgrade existing lines, curbing the ability of new generation to reach load centers.4,3
Into this backdrop, coal's economics in MISO have shifted in a way that will matter for winter commitment decisions. EIA data covering the first four months of 2026 show the dark spread — the margin between wholesale power prices and coal fuel costs in the Midcontinent Independent System Operator — jumped 111% in 2025 versus 2024, moving from $11/MWh to $23/MWh.1 Electricity prices across MISO rose 44% over that period, while coal prices increased only 3%.1
Gas fared worse on the spread arithmetic. Natural gas prices climbed 63% from 2024 to 2025, which largely offset rising wholesale power prices and left the spark spread up just 18%, gaining only $2/MWh to reach $14/MWh.1 NYMEX Henry Hub front-month was trading at $2.90/MMBtu as of Wednesday (2026-07-15), and if prices hold near that level into heating season, coal's dispatch advantage in MISO could widen further. [LIVE_PRICES]
MISO Indiana Hub spot power was at $85.00/MWh and PJM Western Hub at $72.38/MWh on Wednesday (2026-07-15), both reflecting a market where coal units are dispatching at prices that support their economics. [LIVE_PRICES] NERC's winter assessment does not explicitly call for coal to backfill potential shortfalls, but the spread data point in that direction.6
In ERCOT, the picture differs. EIA's Annual Energy Outlook 2026 projects solar generation in the Texas grid will reach 78 billion kilowatthours in 2026 against 60 billion for coal, making solar the larger source by output.2 But ERCOT's solar advantage fades during winter peak hours, and it is in MISO and parts of PJM where the coal-versus-gas dispatch calculus is most consequential for reliability planning.
Transmission constraints compound the capacity picture. The backlog of generation waiting for grid interconnection is most acute in regions where data center developers are signing service agreements, and the FERC deadline extension means new supply cannot be counted on to clear queue and reach the bus bar by winter.4 Nameplate capacity ratings in NERC's 20.2 GW figure mean less if the underlying projects face queue delays or cannot deliver power to load centers with constrained lines.6
Gas turbine availability adds another layer of uncertainty. A Burns & McDonnell analysis found that for every 4-degree-F drop in inlet temperature, gas turbine output rises by roughly 1%, while ambient temperatures above 90F can cut output by around 10% on unmitigated units.7 Inlet air cooling retrofits can recover approximately 10% of that lost capacity, but they are not universal, and NERC's winter assessment does not assume full deployment across the fleet.7
For PJM and MISO planners, the question entering winter commitment windows is whether coal units with improved economics can be scheduled into capacity positions and whether gas-fired peakers will clear their interconnection requirements in time. The data center tripping rules under consideration in Texas could become a model other operators adopt, but the procedural timeline for replication across PJM and MISO remains open.5,4