Energy Zones for PJM States: A Holistic Approach to Transmission Planning that Supports Resource Adequacy and State Energy Policy

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Illustrated map of urban neighborhoods featuring blue and yellow lightning bolt location markers, highlighting designated energy zones across a connected electrical grid.

Authored by: Abby Watson, The Groundwire Group and Sue Glatz, Glatz Energy Consulting, LLC on behalf of ACORE’s Macro Grid Initiative. With thanks and acknowledgement for the expert contributions of Joe DeLosa, Brattle Group.

Executive Summary

As the PJM region experiences unprecedented growth in new electricity demand, policymakers are under pressure to find new ways to facilitate economic development while protecting ratepayers and the reliability of the grid. The speed at which new generation can be brought online, and the transmission lines developed to connect them, is a key part of that equation. A 2024 study of projects in the PJM interconnection queue identified siting and permitting challenges and long timelines for completion of transmission upgrades among the top reasons an energy project fails to move forward in a timely manner. Both factors can impact the timing of final investment decisions needed to make key equipment purchases, further compounding delays in a highly-constrained supply chain environment. A significant share of developers cite interconnection delays and unexpectedly-high costs as key issues influencing their decision to withdraw, suspend, or pause project developments.1 The slow pace of connecting new generation has resulted in persistently increasing capacity costs and growing resource adequacy concerns.2

Energy Zones (EZs) are a tool that state policymakers and grid planners can use to meet future needs in a more coordinated and cost-effective fashion. Energy Zones are geographic areas identified through a state-driven public process that become eligible for preferred development benefits and inclusion in transmission planning processes. This paper explores how state-designated EZs can reduce barriers to development of new supply that aligns with state energy and economic development policy, support resource adequacy, drive more effective transmission planning, and align with community interests. A state-driven EZ process, especially when coordinated across multiple adjacent states, can leverage portfolio diversification benefits and align investments to the benefit of the entire system. Once designated, EZs can be used as inputs into PJM planning processes — through Order 1920 Long Term Regional Transmission Planning (LTRTP) or Regional Transmission Expansion Planning (RTEP) cycles — or serve as the basis for a State Agreement Approach with a subscription based model for developing transmission to meet specific locational needs.

State designation of EZs could include the following considerations:

  • Transmission headroom on the existing system,
  • Opportunities to efficiently expand transmission capacity, such as use of existing rights-of-way, or transportation corridors,
  • Geographic advantages for large loads and new generation, i.e., availability of previously disturbed land, areas with strong resource potential, availability of fiber, water and other utilities,
  • Requirements for state-identified policy-driven resources that could serve large loads,
  • Community engagement and input, including potential benefits frameworks, and
  • Alignment across relevant state agencies, such as economic development, siting authorities, and energy offices.
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