Jeanine Johnson is a former member of the board of the PJM Interconnection and a co-founder of Immutaverse, a cybersecurity platform.
The power industry is entering a period of extraordinary growth. Data centers are expanding. Electrification is accelerating. Utilities across the country are revising load forecasts upward faster than many planners expected just a few years ago.
The dominant response has been straightforward: build more infrastructure, generation, transmission and storage. Those investments are essential. But as the industry prepares for a future of growing demand, it may be overlooking one of the fastest-growing resources already connected to the grid: flexibility.
The mismatch is one of speed. A large data center can add gigawatts of new demand within a couple years, while permitting timelines, supply-chain constraints, and capital requirements mean new infrastructure often takes far longer to deploy.
“Flexibility” is the ability to adjust when and how electricity is consumed, stored or delivered. It spans traditional demand response, virtual power plants, behind-the-meter batteries, flexible industrial loads and smart buildings. It is based on actions that are individually modest, collectively significant and deployable in months, not decades, with corresponding gains for affordability and resilience. That speed is what can bridge the mismatch.
Electric vehicles (EVs) illustrate both the promise and the discipline required. For years, EVs have been viewed as additional load — and they are. But they are also mobile batteries: vehicle-to-home, vehicle-to-building, and ultimately vehicle-to-grid (V2G) technologies could let millions of distributed batteries support reliability during peak periods rather than simply adding to them.
Although full V2G (cars routinely discharging back to the grid itself) remains in early development, with standards, interoperability and business models still maturing, utilities are increasingly planning around EVs becoming grid resources as well as transportation assets. And it is the trajectory, not the current state, that planners build for.
The clearest evidence that flexibility is becoming a resource class in its own right is how it is reshaping interconnection. The conventional model offers a binary choice: firm, fully guaranteed service after years of study and network upgrades, or a queue that in many regions now stretches years deep.
Faced with gigawatt-scale demand arriving faster than transmission can be built, grid operators are increasingly exploring a third option: flexible (or non-firm) interconnection, in which a customer takes part of its load as interruptible capacity in exchange for connecting faster.
This is no longer theoretical. The Federal Energy Regulatory Commission’s December order directing PJM to establish non-firm transmission service options for co-located load was a significant marker, with parallel moves from the Southwest Power Pool’s conditional large-load service to interconnection rule changes at ERCOT and pilot programs at individual utilities. Google has reported contracting flexible capacity at gigawatt scale across multiple utility territories in exchange for tolerating limited curtailment.
But skeptics have a point worth honoring. PJM’s market monitor has warned that flexibility commitments without binding curtailment authority can amount to a “regulatory fiction,” but the direction is clear. Interconnection itself is becoming a negotiable resource rather than a fixed gate.
So the binding constraint is no longer primarily technological. It is institutional. The challenge is integrating flexibility into institutions designed around centralized generation and one-way power flows. The record suggests those institutions move at a pace the technology no longer tolerates.
What would integration actually require? Three things, and all of them are squarely on the table at FERC’s July 23 technical conference on PJM governance.
First, decision velocity. Clock the process.
Consider the industry’s own natural experiment: FERC issued Order 2222 in 2020 to open wholesale markets to aggregated distributed resources, and PJM’s stakeholder process took more than five years to bring DER aggregation participation to market.
Six years from federal order to market entry is not a technology problem; it is a governance problem. Flexible interconnection, virtual power plant participation models, and large-load rules cannot wait their turn in processes with no deadlines.
FERC’s pending show-cause proceedings (issued last month) give it the vehicle to require decision shot clocks for reliability- and affordability-critical rule changes, and to require RTOs to report governance metrics like time-to-decision, proposals initiated versus adopted, as routinely as they report congestion.
Second, incentive geometry. Look at who votes on the rules.
In PJM, the operator’s authority to file changes to its foundational operating agreement is conditioned on approval by a members committee of market participants, under sector-weighted voting. Whatever the historical merits of that bargain, its practical effect today is that the incumbent resources that flexibility may displace exercise significant influence over the rules governing its admission.
No malice is required; the structure votes its interests. FERC’s Order 719 responsiveness principles (inclusiveness, fairness and responsiveness to customers) supply the standard. The conference should examine whether the current division of filing rights meets it.
There is also a working model for the remedy. Australia legislated a “national electricity objective” that makes the long-term interests of consumers with respect to price, reliability, safety and security the standard every market institution must serve. Its recently completed National Electricity Market wholesale market settings review grounded its recommendations in achieving that objective, winning in-principle agreement from the energy ministers of nearly every NEM jurisdiction last December.
That expertise is not foreign to PJM: Its own board chair served on the review’s expert panel. Nor is the appetite: an “affordability redline” of the operating agreement is already circulating in PJM’s own stakeholder process. A comparable least-cost-reliability objective — reliability at the lowest reasonable consumer cost — belongs in PJM’s governing documents. There, it would give flexibility what it currently lacks: a decision standard that counts consumer cost as a reason to say yes.
Third, a durable seat for the states.
The thirteen states and the District of Columbia within PJM’s footprint bear the political accountability for reliability and electricity affordability but hold no formal role in the institution’s governance today.
In the near term, coordinated state participation in the FERC proceedings, which is beginning through gubernatorial collaboration, can shape reform. A more durable governance option could be one the mid-Atlantic invented: governance by interstate compact.
The nation’s first compact authority, the Port Authority of New York and New Jersey, was chartered in 1921. For more than a century, it has managed the airports, seaports, bridges, tunnels and rail system serving one of the nation’s most economically significant regions, financing billions of dollars in long-lived infrastructure primarily through the revenues generated by the facilities it operates.
Similarly, the Washington Metropolitan Area Transit Authority has coordinated critical transit infrastructure across Maryland, Virginia, D.C. and the federal government for more than six decades. Likewise, the Susquehanna River Basin Commission has governed shared water resources across three PJM states since 1970, with the federal government as a full voting member — proof that compact governance and federal oversight can coexist.
A regional grid authority chartered by compact with a statutory least-cost-reliability mission, qualified independent directors, and enforcement mechanisms for states and consumer representatives would do for electricity governance what those institutions did for commerce, transit and water, while leaving FERC’s jurisdiction over wholesale markets, tariffs and reliability fully intact.
The industry will still need enormous investment in generation, transmission and distribution. Nothing about flexibility changes that. But the most valuable near-term resources may not be the power plants yet to be built.
They are the millions of devices, batteries, buildings, and vehicles already connected to the grid, waiting on institutions capable of saying yes at the speed the moment demands. At FERC’s July 23 technical conference on PJM governance, the question before FERC is broader than one RTO’s stakeholder process. It is whether the institutions that govern the grid can adapt as fast as the grid itself. The technology is there. The clock is ticking.
