EXPLAINER-How prepared are U.S. grid operators for extreme heat this summer?

By Kavya Balaraman

Aug 1 (Reuters) - Grid operators across the U.S. are revamping their forecasting methods, introducing reforms to power markets and streamlining interconnection processes to quickly connect more energy to the grid, as a potent combination of extreme weather and data center growth elevate power demand this summer.

High temperatures and the expansion of power-hungry data centers are set to push 2025 summer power consumption to higher levels than the past four summers, federal regulators said earlier this year. Heat waves have already strained the power grid in parts of the country in recent weeks.

“Extreme weather events are becoming more common, and we are adjusting our planning for that,” said Dan Lockwood, PJM Interconnection spokesperson.

Here’s how grid operators are positioned to meet demand this summer, and longer-term measures they are taking to shore up the system.

PJM

Heading into the summer, PJM had forecast power consumption to peak at just over 154,000 MW. The company, which is the largest grid operator in the U.S. and serves one in five Americans, said it is prepared to meet that demand, but warned that it could touch an all-time high of 166,000 MW in an extreme scenario. In that case, it would call on customers to reduce their power use in exchange for compensation.

PJM has been streamlining its interconnection process to bring new power onto the grid. It has also fast-tracked projects that do not require extensive grid upgrades to connect to the system to get them online quicker.

CAISO

California Independent System Operator estimated it has a power surplus of 1,451 MW this summer, measured against the industry-standard, one in 10 year emergency event. That marks a reversal from three years ago, when it estimated a shortfall of 1,700 MW.

CAISO has also been moving to quickly add new power to its grid, with around 25 GW added over the last five years, said Dede Subakti, vice president of system operations. Much of this has been battery storage, which helps balance supply and demand, bringing CAISO’s total pool of battery storage to 11 GW.

“With all this additional capacity, we’re sitting pretty good with 2025 summer,” Subakti said.

However, the grid could still see shortfalls if a prolonged heat-wave affects the entire West, or if potential wildfires damage power transmission lines, CAISO said.

ISO-NEW ENGLAND

ISO New England anticipates electricity demand will touch 24,803 MW this summer under normal weather conditions - and potentially 25,886 MW in case of extended heat waves - but expects to have adequate power to meet that.

ISO-NE is one of the grid operators that is evaluating changes to its capacity auction to bolster grid reliability. This includes transitioning to a “prompt” auction, held shortly before the power is needed, compared with the current practice of holding them three years in advance.

In addition, it is looking to move to two seasonal commitment periods per year for the auction, to tackle the distinct risks that summer and winter demand pose to the grid. It intends to file an initial proposal for this new market structure with federal regulators before year end.

MISO

Midcontinent Independent System Operator predicted that peak demand in its footprint could reach nearly 123 GW this summer, with roughly 138 GW of available power generation to meet that. Like other grid operators, however, it warned that extreme weather events still present a risk to the grid.

MISO, which has been operating near its minimum reserve margin requirement since 2022, has also been making changes to its wholesale markets as grid risks grow, including assessing the reliability of its infrastructure on a seasonal basis. It implemented a “reliability-based demand curve” in its latest auction, under which the price of electricity resources increases as the grid approaches its minimum requirements.

MISO has added around 31 GW of nameplate power to its grid from 2020 through mid-2025, with another 10.9 GW estimated for this year. Meanwhile, nearly 11 GW of power resources have or are set to retire between 2020 through early 2026.