Todd Snitchler is president and CEO of the Electric Power Supply Association, which represents competitive power suppliers that own and operate more than 225,000 MW of capacity throughout the United States.
Recent commentary on the state of competitive power markets in PJM Interconnection raises questions worth taking seriously. But the conclusions it points to — reregulation and a return to utility-owned generation — would take the region in exactly the wrong direction at exactly the wrong time.
Let's be clear about what is actually happening in PJM right now. Over 55 GW of new generation has cleared the interconnection queue and is ready to build. Another 220 GW entered the latest review cycle. And when PJM asked developers whether they were willing to contract directly with large loads, over 130 GW came forward. This is not a market in collapse, rather one ready to deliver.
Moving the Goalposts on Bilateral Contracting
Market skeptics have long argued that PJM should be backstopped by robust bilateral contracting rather than dependent on centralized capacity constructs. But when bilateral contracting between independent power producers and large load customers like data centers actually begins to materialize, those same voices are now using it as evidence that the market is failing.
You cannot spend years calling for more bilateral contracting and then, when it starts to happen, use it as evidence that reregulation is the answer. That is moving the goalposts, and customers deserve better.
This is not a theoretical concern. The consequences of the utility-owned generation model are playing out in real time. Virginia has pursued the integrated resource planning approach that critics of competitive markets implicitly defend, and the results speak for themselves.
The Commonwealth remains dependent on neighboring states for power and has struggled to keep pace with its own load growth, largely driven by data centers. If utility-owned generation and IRP were the answer, Virginia would not be looking to Pennsylvania to keep the lights on. Wish-casting about the virtues of the old regulated model does not change that reality.
The argument that bilateral contracts between IPPs and large loads simply shift risk onto customers and make them no different from rate-based investment misses a critical distinction.
A long-term contract between a developer and a data center is a negotiated deal between sophisticated parties who understand and can absorb the risk. Letting regulated utilities build generation and recover costs through captive retail rates is something else entirely. If load forecasts are wrong or technology shifts, it is residential and small business customers with no choice and no negotiating power who are left holding the bill for stranded assets. Bilateral contracts between IPPs and large commercial customers do not create that exposure.
Let’s be clear about what is actually being proposed. The push for bilateral contracts is focused on data centers and large commercial customers, both of which have the financial resources to be genuine partners in financing new generation. This is not a mechanism that pulls in residential customers or upends the role of distribution utilities. Treating it as such conflates a targeted, practical solution with something far broader than what is on the table.
The real policy conversation should focus on how to strengthen competitive markets, not abandon them. That means clearing transmission bottlenecks, streamlining the interconnection process, and ensuring market rules support the investment needed to meet surging demand. It means getting data centers to the table to sign the long-term contracts that will unlock capital ready to deploy. It means winning the AI infrastructure race without bankrupting the customers who depend on affordable, reliable power.
The generation is there. The developers are ready. The market is not broken. It is at an inflection point. The answer is to accelerate it forward, not retreat to a model that history has already tested and found wanting.
