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Dec 23 – Chicago:
In Chicago’s working-class Pilsen neighborhood, a decades-old oil-fired power plant looms behind Dvorak Park, where children gather to play on bright playground equipment during warmer months. Built in the 1960s, the eight-unit Fisk power plant was rarely used and expected to shut down next year. That plan changed abruptly with the rapid rise in electricity demand driven by artificial intelligence.
As data centers expanded and power consumption surged, electricity prices spiked in PJM Interconnection — the largest power market in the United States. Demand quickly began to outpace supply, raising concerns about grid reliability and turning previously unprofitable plants like Fisk into valuable assets.
NRG Energy, which owns the facility, reversed its retirement decision. “There’s a clear economic case to keep these units operating,” said Matt Pistner, NRG’s senior vice president of generation, explaining why the company withdrew the shutdown notice.
Peaker Plants Return to the Grid
Fisk is one of many so-called “peaker” plants now being brought back into heavier use. These power generators are designed to operate only during brief periods of peak demand to prevent blackouts. While they provide fast, flexible power, they come with downsides: most are old, burn fossil fuels, and produce higher emissions at a higher cost than modern baseload plants.
An analysis of grid filings shows that nearly 60% of oil-, gas-, and coal-fired power plants scheduled for retirement within PJM territory postponed or cancelled their closures this year. Most of these facilities are peaker units.
The Fisk site itself has a long industrial history. A coal-fired plant operated there for more than 100 years before shutting down over a decade ago following sustained community opposition. Although air quality improved significantly after the coal plant closed, pollution never disappeared entirely. The remaining oil-fired peaker units continue to emit sulfur dioxide when they are activated.
Environmental advocates say those emissions are especially concerning given the plant’s proximity to homes and its relatively low smokestacks, which can concentrate pollution at ground level.
Environmental and Health Concerns
Peaker plants are built for speed, not efficiency. Many lack modern pollution controls such as mercury scrubbers and particulate filters. Studies show that natural gas peaker plants emit significantly more sulfur dioxide per unit of electricity than non-peaker facilities.
Research also indicates that these plants are disproportionately located in low-income communities and communities of color. A study examining formerly redlined neighborhoods found residents were far more likely to live near a peaker plant than those in non-redlined areas.
As electricity demand grows, extending the life of peaker plants risks worsening pollution burdens in neighborhoods that already face multiple environmental stressors.
Policy Shifts and Growing Demand
The push to rely more heavily on peaker plants may intensify under the current U.S. administration, which has expressed interest in tapping existing power sources to meet surging demand quickly. Federal officials have acknowledged that unused capacity within the current grid — including peaker plants — represents the fastest way to avoid shortages.
Although peaker plants generate only about 3% of U.S. electricity annually, they account for nearly 19% of total generating capacity, meaning they can be ramped up rapidly when needed.
Meanwhile, AI data centers are placing unprecedented strain on the grid. PJM covers 13 states and includes the world’s largest concentration of data centers. Payments to power suppliers for meeting peak demand increased by more than 800% this summer compared to the previous year, making peaker plants suddenly far more profitable.
Grid operators argue that keeping existing generation online is essential while new infrastructure is built. Several aging plants across Pennsylvania, Maryland, and other states have already had their retirements delayed or cancelled.
A “Last Line of Defense”
NRG Energy maintains that peaker plants play a critical role in maintaining grid stability — not just for data centers, but also for electrified transportation, manufacturing, and extreme weather events. Local generation, the company argues, reduces reliance on imported electricity during emergencies.
“These units act as a shock absorber for the system,” Pistner said, calling them the grid’s “last line of defense.”
Energy experts, however, point to alternatives. Expanding transmission lines could move surplus power from one region to another more efficiently, while advances in battery storage could eventually replace many peaker units altogether.
Until those solutions are widely deployed, communities like Pilsen may find themselves once again facing the environmental consequences of aging infrastructure. With industrial traffic, nearby highways, and other pollution sources already affecting air quality, residents fear the revival of peaker plants could undo years of progress.
As AI-driven power demand continues to rise, the tension between grid reliability, economic incentives, and environmental justice is likely to intensify — leaving vulnerable neighborhoods at the center of the debate.
