FERC’s annual Summer Assessment shows rising demand and shrinking reserve margins as new supply has been slow to come online. 

That situation has been well known for over a year, but this summer forecasters expect higher-than-normal temperatures, and it could be exacerbated by extreme weather, according to the assessment. 

“The increase in demand doubled from 2024 to what you’re projecting for this summer, and that is largely data center growth,” FERC Chair Mark Christie said May 15 at the commission’s open meeting, where the assessment was unveiled. “So, on the demand side, you’ve got increases. They’re pretty amazing, but we continue to lose dispatchable generation, predominantly coal and gas, and it’s being replaced with inverter-based resources, which don’t have the same characteristics.” 

The summer assessment is based partly on some of the same information that NERC used in its own reliability assessment released the same week, which identified ERCOT, ISO-NE, MISO and SPP as facing elevated risks of outages under extreme conditions. (See related story, NERC Warns Summer Shortfalls Possible in Multiple Regions.) 

Christie noted that PJM said it could have to resort to emergency conditions this summer if the region faces extreme heat that could lead to a new peak demand record there. He asked NERC why it did not also place it at an elevated level of risk. (See “Summer Outlook Finds Possible Reserve Shortage,” PJM OC Briefs: May 8, 2025.) 

“We agree that the risk under extreme conditions in PJM is present,” NERC Manager of Reliability Assessments Mark Olson said at the open meeting. “The criteria that we apply to elevated risk looks at the once-per-decade type of scenarios and low-risk scenarios. And what we noted is that PJM is preparing to call on demand response, which is part of our assessment as well.” 

It would take a combination of extreme weather and major resource outages to lead to shortages in PJM this summer, he added. 

Relying on DR seemed risky to Christie, who said at a press conference after the meeting that when PJM was hit by Winter Storm Elliott over Christmas in December 2022, just one-fourth of DR called on actually showed up. The resource can be critical when the fleet is running full and demand is high, but Christie argued it was not a replacement for generation. 

“You don’t plan a resource mix to say, ‘Well, let’s just plan on having an emergency and use emergency measures because of the reliability aspect to it,’” he added. 

Regardless of whether PJM needs to dip into DR to maintain reliability this summer, Christie noted the region faces long-term resource adequacy issues. Those have led to higher prices and significant criticism from many of its states’ political leaders. 

The RTO is seeing a changeover in its leadership, with CEO Manu Asthana set to leave at the end of the year and stakeholders recently voting out two board members, including the chair. (See related story, PJM Stakeholders Reaffirm Board Election Results.) 

“A lot of that criticism is misplaced,” Christie said. “A lot of the problems in the PJM zone are the result of state policies, and PJM is being blamed unfairly.” 

FERC cannot overrule stakeholders’ board elections, though Christie said PJM could have better governance that gives a more prominent role to states. He noted that FERC will cover PJM’s capacity market at a technical conference on resource adequacy in early June, but he also said the RTO’s leaders were doing “their best.” 

While PJM was a major topic of discussion at the open meeting, the assessment covers the entire country, and it said that broad swaths of the West as well as Texas and Oklahoma face elevated fire risk this year. 

“Long-range forecasts for above-average temperatures and below-average precipitation in much of the Western and Central United States may result in higher wildfire risks in the affected regions over the course of the summer,” it says. 

The elevated risk of fires could lead to public safety power shutoffs as utilities seek to avoid the massive liabilities associated with starting one. And if fires do start, they can lead to damaged transmission equipment and other outages. 

Drought conditions extend over 37% of the U.S., well beyond the areas at risk for fire, and that is expected to grow this summer when temperatures rise. Drought risks curtailing power plant operations, as they can be short of water for cooling, leading to derates or, more rarely, forced outages, the assessment says. 

The assessment came a week before the National Oceanic and Atmospheric Administration’s official hurricane outlook, but one from Colorado State University forecasts an active season with 17 named storms and nine hurricanes, four of which are expected to be major. That amounts to 25% more activity than a normal season, according to the assessment. 

“What struck me is the hotter temperatures, the limited water resources, the elevated risks of wildfire, hurricanes and other extreme weather events — they all show up in this report,” Commissioner Judy Chang said during the open meeting. “And these trends are only getting worse. … We keep using the word[s] ‘uncertainty’ and ‘increased uncertainty’ in these reports; I would say there’s actually an increase of certainty that this is actually the pattern that we’re seeing more and more.”