Power Firms Jump on Data-Center Timeline From Biggest US Grid

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(Bloomberg) — Shares of power-plant owners climbed after the largest US electric grid accelerated plans to pair data centers with energy producers.

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Constellation Energy Corp. and Vistra Corp. jumped about 6% Wednesday while NRG Energy Inc. gained 4.6% after grid operator PJM Interconnection LLC changed how data centers and suppliers contract together while moving up the date for the procurement of supply.

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PJM has faced heavy criticism for being too slow to connect large data centers with power generation ahead of an expected surge in demand in the coming years. That’s raised concern over whether the grid can deliver reliable electricity during periods when the system is stretched.

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In response, PJM has brought forward plans to connect data centers with power by a year to this September, according to a Tuesday letter to stakeholders. That will help avert the “near-term reliability risk,” wrote Paula Conboy, chair of the board of managers. PJM serves 67 million people from New Jersey to Illinois, including in Northern Virginia, where there’s the biggest concentration of data centers in the US.

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The accelerated timeline is an “acknowledgment that PJM is structurally short capacity to meet hyperscaler-driven demand,” wrote Evercore ISI analysts Nicholas Amicucci and Sharon Wang in a note to clients. They view the letter as “materially constructive” for independent power producers.

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Pressure on PJM came to a head this month when American Electric Power Co., one of the largest utilities in the US, threatened to quit the grid in frustration over the speed at which data centers were being connected. The head of the Federal Energy Regulatory Commission, Laura Swett, then said that PJM may have grown too big to function, putting America’s position in the AI race against China at risk.

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The PJM changes are now expected to help power producers secure additional data-center contracts.

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“By pulling forward procurement, PJM reduces the risk of prolonged uncertainty extending into 2027, which had been a key overhang on both investment decisions and commercial dealmaking,” Sophie Karp, a KeyBanc Capital Markets analyst, wrote in a note to clients. “This increased clarity, combined with forthcoming regulatory decisions, could help restart activity in data center-related power agreements that have been delayed since late last year.”

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Power producer stocks logged large gains in 2025 on AI-demand optimism, but the stocks have since pulled back as investors wait to see if the firms can fully capitalize on the demand and secure additional contracts. Some recent guidance misses from the companies have also contributed to the concerns.

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Utilities have also been in focus on affordability concerns as customers’ energy costs are surging. Power prices on the largest electric grid in the US jumped 76% in the first quarter compared to a year earlier due to rampant demand from data centers, according to a report last week. PJM called on states to start working on cost-allocation frameworks.

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“The Board’s strong emphasis on state-level cost allocation frameworks highlights what is arguably the most critical near-term constraint on data center expansion: affordability and cost recovery,” Karp wrote.

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