Pennsylvania Advocate Opposes $1.7B NextEra, Exelon Project

Edgen Stock·Jan 22 2026, 23:20

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Key Takeaways

A Pennsylvania consumer watchdog is opposing a major $1.7 billion transmission line proposed by NextEra Energy and Exelon, part of PJM Interconnection's larger grid expansion. The opposition, filed on January 21, 2026, cites volatile data center demand forecasts and the risk of burdening ratepayers with unnecessary costs after regional wholesale power prices already climbed 49% in 2025.

Regulatory Opposition: The Pennsylvania Office of Consumer Advocate formally requested PJM's board reject the $1.7 billion 'Project 237,' labeling it a potential "poster child" for expensive overbuilding.
Data Center Speculation: The project's justification is linked to future data center power needs, but the advocate notes $21.5 billion in recent capacity costs were for projected facilities that were not yet online.
Soaring Power Costs: The dispute comes as average wholesale power costs in the PJM region increased 49% in 2025 to $82.67/MWh, driven primarily by a 260% increase in capacity costs linked to demand forecasts.

Advocate Challenges $1.7B Line Over Ratepayer Burdens

Pennsylvania’s Office of Consumer Advocate (OCA) on January 21, 2026, formally urged the PJM Interconnection’s board to reject a $1.7 billion transmission line proposed by NextEra Energy and Exelon. The advocate warns the 221-mile, 765-kV project across central Pennsylvania risks becoming a "poster child" for expensive grid overbuilding based on uncertain demand projections. The proposal, known as Project 237, is a key component of PJM's broader $11.6 billion Regional Transmission Expansion Plan. The OCA argues that less costly alternatives, such as in-state generation or upgrades using existing right-of-ways, could solve the issue while imposing lower costs on Pennsylvania ratepayers.

Data Center Demand Drives 49% Spike in PJM Power Costs

The push for new transmission lines stems from surging power demand from data centers and artificial intelligence operations. This trend has already driven up costs significantly in the PJM region, which covers 13 Mid-Atlantic and Midwest states. According to PJM's market monitor, the average cost of wholesale power climbed 49% in 2025 to $82.67 per megawatt-hour from $55.52/MWh a year earlier. The primary driver of this increase was a 260% surge in capacity costs, which rose from $3.61/MWh in 2024 to $13.09/MWh in 2025. Data centers accounted for $23.1 billion in costs during PJM's last three capacity auctions, with $21.5 billion of that total attributed to projected facilities not yet in operation, highlighting the speculative nature of the demand forecasts.

Regulatory Scrutiny Clouds Project's Future

The OCA's opposition creates significant regulatory uncertainty for NextEra and Exelon. The advocate highlights that PJM recently revised its near-term load growth projections downward, questioning the immediate need for such a massive capital expenditure. If the full $11.6 billion plan is approved, residential ratepayers across the PJM territory could face approximately $9 billion in costs. This conflict mirrors past disputes, such as Maryland's 2024 challenge over cost allocation for a $5.1 billion PJM expansion also driven by data center development. The outcome could set a precedent for how state-level watchdogs handle large-scale infrastructure projects justified by tech-sector growth.