PJM and ERCOT navigate a capacity rollercoaster

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Feb 12, 2026

Paul Siegel, CEO of LS Power, a developer and operator of generation, storage, and transmission assets. He digs into PJM’s sudden flip from surplus to shortage and why capacity prices surged. He discusses the DOE’s push to make hyperscalers pay and interim fixes like batteries and uprates. He also unpacks why ERCOT felt cyclical despite big load growth and how price signals unlocked flexible demand.

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INSIGHT

PJM's Rapid Flip To Shortage

PJM flipped from long stasis to acute shortage as hyperscaler data center demand arrived almost overnight.
Planning for new large gas plants takes years, so price signals now reflect a real capacity gap.

INSIGHT

Demand Response Is Fast But Underrealized

Demand response can ramp fastest to fill near-term capacity gaps but hasn't scaled yet despite much higher prices.
Structural factors like ELCC adjustments and awareness limit how much gross capacity price translates to delivered value.

ADVICE

Allocate Integration Costs To Large Loads

Make large data center customers bear marginal integration costs to protect ordinary consumers from steep build-cost increases.
Use targeted bilateral procurement so hyperscalers procure capacity and grid upgrades proactively.

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Last year, the PJM capacity crunch became a focal point for an entire industry struggling to navigate the explosive growth of hyperscaler data centers. Yet even in the first two months of 2026, capacity prices have continued to skyrocket, and the economics of energy generation have only become more tenuous.

In this episode, Shayle Kann talks to Paul Segal, the CEO of LS Power. A major player in the space, LS Power owns a diverse portfolio of generation, storage, and transmission assets across the U.S.

Shayle and Paul dive into the volatility currently defining the two most talked-about power markets in the country: PJM and ERCOT. They cover topics like:

How PJM flipped nearly overnight from a state of "stasis" to a capacity shortage

The federal government's emergency order to make large data centers "pay their way"

Why 10 gigawatts of expected load failed to show up during the recent Texas winter storm

Why Paul sees ERCOT as a “cyclical” market that is currently difficult for new gas generation, despite massive load growth

Paul’s strategy for ensuring sufficient “bridge” generation before new large-scale projects come online

Resources

Catalyst: PJM and the capacity crunch
Latitude Media: PJM’s $178 billion fork in the road
Catalyst: The potential for flexible data centers

Credits: Hosted by Shayle Kann. Produced and edited by Max Savage Levenson. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.

Catalyst is brought to you by Uplight. Uplight activates energy customers and their connected devices to generate, shift, and save energy—improving grid resilience and energy affordability while accelerating decarbonization. Learn how Uplight is helping utilities unlock flexible load at scale at uplight.com.

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Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com.