PJM Interconnection, the largest U.S. grid operator, hit a peak load of about 161 gigawatts (GW) on June 23, 2025, nearly 5% above its 154 GW peak demand forecast for the summer – PJM’s highest system peak load since 2011.
Further heightening concerns, the July PJM capacity market auction marked the first time PJM failed to secure enough generation to meet its target capacity reserve margin of 19.1%, only securing 18.9% reserve generation in the auction.
Not only is the supply shortfall driving up costs for consumers, but as recently stated by outgoing Federal Energy Regulatory Commission Chairman Mark Christie: “The reliability threat is not on the future horizon, it is actually here now.” Christie went on to say that resource adequacy is the “central issue” facing the U.S., and that blackouts during the extreme heat could have been deadly.
Advanced Energy United has often emphasized the importance of quickly bringing new advanced energy resources online by speeding up PJM’s interconnection process. Other solutions, such as improving load forecasting and transitioning to a seasonal capacity market, are also critical. But the experience this summer highlighted another solution that’s already available and can be deployed quickly: Demand Response (DR).
PJM has issued nine energy emergency alerts since June. If not for DR resources, PJM may not have been able to keep the lights on this summer. The frequency of the PJM alerts featuring warnings that generators need to be ready to bring on emergency supplies highlight how stretched the system is. PJM utilizes DR as a vital tool to manage grid reliability, particularly during periods of high demand or resource scarcity. PJM calls on participating DR customers to reduce their energy use during these times of high system demand. Participants in DR programs, often large energy consumers, commit to reducing their electricity usage when requested in exchange for compensation from the PJM markets. The amount of DR resources called by grid operators and the frequency of dispatch increased precipitously this summer due to a combination of increased demand and extreme heat. Commercial and industrial demand response customers who hadn’t been called on in summers past were dispatched this year, sometimes on multiple days.
On June 23rd, PJM dispatched nearly 4,000 MW of DR to meet peak system demand. As FERC Commissioner Judy Chang observed, in speaking to the role of DR in PJM, “I see load flexibility as a key tool for grid operators to meet the challenges that we face.”
As the gap between supply and demand grows, DR and virtual power plants (VPPs) are the only additional supply resources that can come on quickly enough to meaningfully address resource adequacy shortfalls and reduce prices in the near term. Especially with load growth accelerating, DR must play a bigger role as technology unlocks more flexibility. All types of large energy users are increasingly leveraging customer-sited assets to deliver grid reliability year-round through DR.
As DR is increasingly automated and optimized, it provides greater rewards for customers and value for grid operators. Technology is expanding DR’s value beyond emergency capacity needs, encompassing multiple complex programs seeking a full spectrum of capacity market services, providing benefits to consumers in the form of reliable electricity and lower prices.
To fully take advantage of DR’s potential, states should continue to implement policies that drive utility action, develop incentive-based programs, and foster a competitive market for energy resources. States can also engage at PJM to ensure DR resources are encouraged and maximized in wholesale markets as the go to resource for managing peak demand.
The lesson from this summer is simple: DR met an emergency at scale and kept the system online. As reserve margins tighten, DR must be central to PJM’s strategy for delivering affordable, reliable power in every season.