PJM Interconnection has approved $5.9 billion in new transmission projects to improve reliability across its network and support the connection of large loads, including data centers, to the grid.
The new investment, combined with changes to the scope and cost of existing projects, has resulted in the revision of the latest Regional Transmission Expansion Plan cost estimate to $6.7bn.
The plan comprises a 765kV, multistate transmission backbone being developed by American Electric Power (AEP), Dominion Energy Virginia, and FirstEnergy. First announced in October of last year, the projects include the construction of several new 765kV, 500kV, and 345kV transmission lines across Virginia, Ohio, and West Virginia.
In total, PJM estimates that the projects will cost roughly $4.6bn. AEP has estimated that its share of the projects will cost around $1.1bn, including $600 million worth of projects in Indiana, Ohio, and Virginia.
“The proposals resolve critical west-east regional transfer reinforcement needs by introducing 765 kV transmission lines connecting the AEP system in the western portion of the PJM footprint with the rest of the network in the central and southern parts of PJM, primarily Virginia,” the grid operator said.
The increased costs are linked to higher costs related to long-lead equipment, changes resulting from detailed design and engineering plans, constructability reviews, additional contracting resources, and the significant volume and complexity of work.
In addition, the grid operator cited the huge increase in forecasted load growth, which is mainly due to the data center sector. “The forecasted demand growth is driven in part by data center load additions and the electrification of vehicles and building heating systems,” PJM reported.
Most of the major utilities in the PJM interconnection footprint—which includes 13 mid-Atlantic and Midwestern states and the District of Columbia—have announced record load growth projections due to the data center sector.
In its Q4 results last month, AEP said it expects to bring 4.7GW of new data center capacity online in 2025, a 25 percent increase from last year.
Dominion Energy, Virginia’s largest utility, said in its Q4 statement that as of December 2024, it had approximately 40GW in various stages of contracting. This compares to 21GW in July 2024, an 88 percent increase.
