PJM Declares Low-Level Emergency as 60 GW Offline During Midwest Heatwave

PJM's Western hub spot prices reached $1,021 per megawatt-hour Tuesday afternoon while day-ahead prices for Wednesday averaged $295.83, the highest since mid-July. The operator cited overlapping scheduled outages and lower wind output as the immediate drivers. The US Department of Energy issued an emergency order directing specific units to run through mid-month to preserve reliability.

PJM's winter 2025-26 reserve margin forecast already showed a decline to 7,500 megawatts from 8,700 the prior year. January 2026's Winter Storm Fern produced 18-19 GW of unplanned outages, exceeding seasonal expectations, with equipment failures and natural-gas scheduling constraints as primary causes. The pattern indicates maintenance windows are compressing while demand growth outpaces new firm capacity.

MISO reported parallel stress from warm temperatures and generation outages. Both operators face the same structural tension: regulatory and market incentives favor retiring or delaying dispatchable resources faster than replacements clear interconnection queues, leaving narrower operating margins during weather deviations.

The DOE order expires mid-month; PJM's next capacity auction results and any extension of emergency authority will reveal whether the reserve shortfall has become structural.