ERCOT made a choice years ago that most of the country is now reconsidering. Texas runs an energy-only market with no capacity payments, connects generation through connect-and-manage, sorts out delivery in dispatch, and pushes interconnection risk onto developers. That design is a big part of why Texas has added generation faster than any other U.S. grid.

PJM, the operator for much of the eastern U.S., is now weighing whether to move in that direction. A white paper from the operator describes a shift from managing surplus to managing scarcity as data center demand outruns new supply. The paper lays out three pathways: long-term bilateral contracts, differential reliability standards for new loads, or an ERCOT-style tilt toward an energy and ancillary services market with a smaller role for capacity. The scale is large in both regions. ERCOT is now considering roughly 445 gigawatts of large-load interconnection requests against an 85-gigawatt system, while in PJM, one Dominion territory alone projects 70 gigawatts of new demand against a 24-gigawatt peak.

On this episode of the Energy Capital Podcast, Joshua Rhodes talks with Josephus Allmond, Virginia’s chief energy officer, about what separates the two grids and what PJM can take from the Texas model. Allmond points to ERCOT’s interconnection speed as the clearest lesson, given PJM’s projected 700 days from queue to agreement before construction even starts.

He also points to the state line, where borrowed fixes hit a wall. Virginia’s State Corporation Commission requires large customers to pay a generation charge for 14 years, even when a data center builds its own power. A load that sources its own generation, Allmond says, ends up “paying their own way and then turning around and paying Dominion.” The conversation works through:

* ERCOT versus PJM structure, energy-only and connect-and-manage against PJM’s capacity market and consensus-driven stakeholder process, and why one moves faster.

* PJM’s three pathways, and how the energy-market tilt is the one Allmond reads as closest to ERCOT.

* The large-load tools, controllable load resources, and behind-the-meter generation in Texas, and the Virginia charge that makes the same moves uneconomic.

* Interconnection speed, ERCOT’s developer-risk model against PJM’s roughly 700-day queue.

What PJM borrows from ERCOT, and what it refuses to give up, will shape how fast the East Coast grid can serve the load now lining up.

Timestamps

* 00:00 - Introduction and Guest Background

* 01:52 - Virginia’s Chief Energy Officer Role

* 04:15 - Data Center Alley and Virginia’s Hub Status

* 06:29 - ERCOT vs. PJM: Governance and Transmission

* 10:53 - PJM’s Shift from Surplus to Scarcity

* 19:29 - PJM’s Three Reform Paths

* 24:19 - Virginia’s Minimum Demand Charge Problem

* 29:36 - The Data Center Tax Exemption Fight

* 31:50 - Path C and the ERCOT Parallel

* 35:17 - What Has to Give: Allmond’s Closing Answer

Resources

People & Organizations

* Joshua Rhodes (LinkedIn)

* Webber Energy Group (Website - LinkedIn)

* IdeaSmiths (Website - LinkedIn)

* Micalah Spenrath (LinkedIn)

* Matt Boms (LinkedIn)

* Texas Advanced Energy Business Alliance (Website)

* Energy Capital (Website - LinkedIn - YouTube)

* Texas Energy & Power (Substack)

* Josephus Allmond (LinkedIn)

* Office of the Virginia Chief Energy Officer (Website)

* Southern Environmental Law Center (Website)

* PJM (Website)

* Monitoring Analytics — PJM Independent Market Monitor (Website)

* ERCOT (Website)

* FERC (Website)

* Dominion Energy (Website)

* Virginia State Corporation Commission (Website)

* Virginia Department of Energy (Website)

Books & Articles Discussed

* Powering Reliability Through Market Design — PJM White Paper (PDF)

* How Will Data Centers Pay for Power? — Travis Kavulla, American Affairs (Website)

Company & Industry News

* PJM floats options for capacity market overhaul (Utility Dive)

* Spanberger creates new cabinet position, appoints Allmond chief energy officer (Virginia Mercury)

Related Podcasts by Energy Capital

* How Texas Plans to Serve Infinite Demand, with Eric Goff (Texas Energy & Power)

* NRG’s Gigawatt VPP in Texas, with Travis Kavulla (Texas Energy & Power)

* Who Pays for Texas Grid Growth? — Roundtable Discussion (Texas Energy & Power)

* Who Pays for the New Grid, with Pablo Vegas (Texas Energy & Power)

Transcript

Joshua Rhodes: Hey everyone and welcome to another episode of the Energy Capital Podcast. I’m really excited to have Josephus Almonds on today to get us out of our comfort zone a little bit here in Texas and ERCOT and talk a little bit about PJM, kind of some of the things that are happening in other grids. PJM is one of the other grids that is experiencing large amounts of load growth, particularly from things like data centers. Texas is no stranger to that. And so it might be useful to figure out kind of how other regions are doing it, approaching it, and maybe we can

Cross-collaborate on some of those. So Josephus got his JD from Duke, where he did a couple of stints at BakerBots and Kirkland and Ellis. And then he was an attorney with the Southern Environmental Law Center, where I should say that we worked together on Dominion’s IRP a couple years ago, intervening in that. But recently was named CEO, should say Chief Energy Officer, although this may be one of the few podcasts where Chief Energy Officer might get you more kudos than Chief Executive Officer for sub.

But Josephus was recently named Chief Energy Officer from Governor Spanberger. Josephus Alman. Welcome to the Energy Capital Podcast.

Josephus Allmond: Yeah. Thank you so much for having me, Josh. It’s good to see you.

Joshua Rhodes: Yeah, it’s good to see you too. So first I gotta ask, how’s dad life treating ya?

Josephus Allmond: It’s great. We actually just had his first birthday party this past Saturday. So awesome. We went all out with a clues theme, had paw prints all over the house, a bunch of decorations. We had my in laws were in town from California and some of her aunts from Texas. So full house, lots of friends and family over and a blue smash cake that Josephus really loved.

Joshua Rhodes: Nice. That’s awesome. You know, Aiden’s only just about a month ahead there. I remember when I when we were working together when you were at SELC and I was like, hey, I’m not gonna be able to make this like super important meeting that I said I’d be at because it’s literally on the day of my son’s birth. I think you told me that y’all were also expecting. So that’s awesome. We’re right in there together. Neither of us are probably getting any sleep at all. So we’ll see where this goes.

Let’s start out with the job title. So Virginia now has a chief energy officer. So what wa...