AI-driven demand from data centers is forcing grid operators to delay retirements of aging "peaker" plants, including Chicago’s Fisk facility. PJM reserve strains and spike pricing have made many peakers economically viable to keep online. While peakers provide fast backup power, they emit higher levels of pollution, are often sited near low-income and formerly redlined communities, and raise environmental justice concerns. Experts point to transmission upgrades and battery storage as cleaner long-term alternatives.
AI Data Centers Reawaken Old 'Peaker' Plants — Raising Pollution and Environmental Justice Alarms
Fisk Coal Station, a century-old electric generating plant shut down in 2012 after more than a century of operation, sits mostly dormant in Pilsen, a predominantly Mexican community in Chicago, Illinois, U.S., as its ?peaker? units are pressed into service again while the nation?s electrical grids struggle to meet growing demand from data centers, November 17, 2025, in this screengrab from video. REUTERS/Eric Cox
Dec. 23, Chicago — In Pilsen, a working-class neighborhood on Chicago’s southwest side, a 1960s oil-fired station known as the Fisk plant towers behind Dvorak Park. Once slated for retirement, Fisk’s eight intermittently operated "peaker" units have been kept online as surging electricity demand from artificial intelligence data centers strains the PJM Interconnection power market.
Why Peakers Are Returning
Peaker plants are designed to start quickly during brief spikes in demand and are rarely used for baseload service. But a steep rise in requests for power from large data centers this year squeezed reserve margins in PJM — the nation’s largest grid operator — and sent prices for peak supply soaring. Reuters analysis of filings with PJM shows roughly 60% of oil-, gas- and coal-fired plants that had announced retirements in the region postponed or cancelled those plans this year, most of them peaker units.
“We believe there's an economic case to keep them around, so we withdrew the retirement notice,”
— Matt Pistner, Senior Vice President of Generation, NRG Energy
PJM spokesman Jeff Shields said the market reflects growing demand. "We cannot afford to lose existing generation while we continue to bring on new generation to keep pace with the electricity needs of data centers and other large loads," he told Reuters.
Health, Pollution And Equity Concerns
Peaker plants often lack modern emissions controls because they were built for rapid startup rather than efficiency. They can emit disproportionately more pollution when operating, and many are sited close to neighborhoods. EPA records show Fisk’s site emitted between about 2 and 25 tons per year of sulfur dioxide when the peakers occasionally run. Advocates warn that low chimneys and on-site fuel storage can concentrate pollution near homes.
Research and government reports show peakers are unevenly distributed: the roughly 1,000 peaker plants nationwide are disproportionately located in low-income communities and neighborhoods that were historically redlined. A 2022 study led by UCLA’s Lara Cushing found formerly redlined neighborhoods were 53% more likely to host a new peaker since 2000 than non-redlined areas.
The U.S. Government Accountability Office reported that, on a median basis, natural gas peaker plants emit about 1.6 times more sulfur dioxide per unit of electricity than non-peaker plants — a key statistic cited by environmental justice groups pressing for cleaner solutions.
Policy, Markets And Specific Cases
Market signals this year made peakers more lucrative: PJM reserve-market payments jumped sharply (Reuters reported increases of more than 800% year-over-year in some peak-price measures this summer), prompting utilities to reverse some retirement plans. Of about 23 oil-, gas- and coal-fired plants in PJM territory slated to retire starting in 2025, letters show that 13 had retirement plans delayed or cancelled since January; 11 of those were peakers.
Among plants kept online were 55-year-old units at Constellation Energy’s Eddystone station, ordered to remain online by the U.S. Department of Energy, and the Wagner peaker near Baltimore, which PJM retained while transmission work proceeded to allow its retirement later.
Alternatives And What Comes Next
Energy experts and advocates point to clear alternatives that could reduce reliance on polluting peakers: upgraded transmission lines to move excess clean energy between regions, and utility-scale battery storage that can supply quick bursts of power. Both solutions require investment and time; meanwhile, grid operators argue they need existing megawatts to avoid blackouts as data center demand rises.
Local activists in Pilsen, including Jerry Mead-Lucero, worry the return of peaker operations will reintroduce cumulative pollution alongside truck traffic, scrap yards and busy highways. "You add all of these compounding factors, and you end up with a real problem again," Mead-Lucero said.
Key Takeaway
Keeping peakers like Fisk online solves short-term reliability and market problems but raises local air-quality and environmental justice concerns. Policymakers face a trade-off: preserve immediate grid reliability using existing, often fossil-fueled assets — or accelerate transmission upgrades and storage deployment to provide cleaner, longer-term solutions.
(Reporting by Laila Kearney in New York; additional reporting by Eric Cox. Editing by Liz Hampton and Michael Learmonth.)
