Canada trade, PJM contracts and Texas audits reshape Energy load planning

Key Developments

U.S.-Canada gas and power trade shifts from tariff noise to capacity value

EIA reported that total U.S.-Canada energy trade value fell 11% in 2025 to an estimated $137 billion, but natural gas and electricity trade value increased slightly because of higher natural gas prices and trade volumes (EIA). Canada’s energy exports to the United States became subject to a 10% tariff on March 6, 2025, although EIA said later White House tariff actions exempt energy trade (EIA). Natural gas remained only 8% of total energy-trade value, but U.S. natural gas imports from Canada averaged 8.6 Bcf/d in 2025, 1% above 2024, while the value of those imports rose 52% (EIA). U.S. natural gas exports to Canada increased 4% to 2.8 Bcf/d, and their value rose 77% to $2.6 billion (EIA). Electricity trade totaled $3.2 billion in 2025, with 67% of that value from Canadian power imported into the United States (EIA).

The read-through is that cross-border Energy value is moving toward reliability optionality rather than just commodity exposure. Crude drove the broader 2025 trade-value decline, but gas and power flows became more important as U.S. regions managed price, weather and capacity constraints. The practical planning angle is in the Northeast: EIA said a new transmission line that began operations in January 2026 could increase U.S. electricity imports from Canada, which makes intertie availability a capacity-planning variable rather than a background trade statistic (EIA).

What to watch: Watch whether post-January 2026 transmission utilization lifts Canadian electricity imports into the U.S. Northeast, and whether energy-tariff exemptions remain intact if broader U.S.-Canada trade policy changes again (EIA).

PJM’s bilateral process turns existing nuclear capacity into a data-center contracting asset

Utility Dive reported that Public Service Enterprise Group’s unregulated generation arm is exploring ways to supply data centers through PJM Interconnection’s backstop reliability initiative (Utility Dive). PJM’s two-part process includes a one-time capacity auction scheduled to start Sept. 30 and a supplier-matching process that could lead to long-term bilateral contracts with planned large loads (Utility Dive). Initial bilateral deals could be announced in August, while the full process could continue into next spring (Utility Dive). PSEG Power owned about 3,760 MW of nuclear generation capacity in New Jersey and Pennsylvania at the start of 2026, and CEO Ralph LaRossa said the company is discussing existing nuclear production, future nuclear upgrades and other generation opportunities with potential customers (Utility Dive). PJM also reduced its Commonwealth Edison-zone load forecast by 1.3 GW in 2031 and 3.3 GW in 2034 based on a lower data-center pipeline (Utility Dive).

The analytical point is that PJM’s large-load problem is starting to separate committed demand from speculative demand. If bilateral contracts materialize, existing nuclear output and uprates can become contracting tools for hyperscale buyers before new plants arrive. If forecasts keep moving, suppliers will need to price optionality carefully: PSEG maintained $24 billion to $28 billion of 2026-2030 capital-expenditure guidance, with more than 90% focused on regulated investments, so incremental data-center supply deals still have to fit around utility-investment discipline and state affordability politics (Utility Dive).

What to watch: Track whether PJM announces initial bilateral deals in August, whether PSEG converts nuclear capacity or uprates into signed large-load contracts, and whether the Sept. 30 backstop auction shrinks if bilateral matching absorbs part of the demand (Utility Dive).

Texas makes data-center interconnection a verification problem

Utility Dive reported that Texas Gov. Greg Abbott called for an audit of all data centers in the ERCOT interconnection queue, leading ERCOT to delay its Batch Zero transmission-planning study (Utility Dive). The article said interconnection requests total about 474 GW, more than five times Texas’ record ERCOT peak electricity demand, and about 90% of new power requests are data centers (Utility Dive). Abbott’s audit asks whether data centers will provide their own power or depend on ERCOT, including projected annual and peak electricity consumption and any progress toward on-site generation or procured supply (Utility Dive). It also asks for projected annual and peak water consumption, anticipated water sources, and whether projects depend on tax incentives, grants, abatements or other public support (Utility Dive). Abbott said any project that fails to comply with the verification and audit process must be denied, and ERCOT plans to ask the Public Utility Commission of Texas for a timeline exemption at its Aug. 20 open meeting (Utility Dive).

The read-through is that Texas is moving from queue management to demand due diligence. A 474 GW queue is not the same as executable load, and Utility Dive noted ERCOT had already warned that a forecast showing peak demand more than quadrupling by 2032 may be inflated (Utility Dive). The second-order effect is on capital formation: generation, transmission and water infrastructure tied to data centers now depend on whether developers can show committed demand, credible self-supply and local-resource planning rather than just filing an interconnection request.

What to watch: Watch the Aug. 20 PUCT meeting for ERCOT’s good-cause exemption, the audit criteria applied to Batch Zero projects, and whether serious data-center proposals can distinguish themselves from speculative queue entries (Utility Dive).

This is an AI Briefing — AI-generated analysis published under TLCapital.AI. It is not personal research or positions, and it is not investment advice. Figures are sourced to primary filings with dates noted throughout. Do your own diligence.