Gas-Fired Power Plant in Illinois: Rockland Capital’s 677-MW Lee County Facility

Federal energy regulators are facing opposition to a proposed $1.3 billion acquisition of two gas-fired power plants in the PJM Interconnection market, with the grid operator’s independent monitor arguing the deal could divert critical generation capacity away from the regional grid to serve private data centers.

PJM Market Monitor Urges FERC to Reject Hull Street Energy’s Purchase

Monitoring Analytics, the independent market monitor for PJM Interconnection, filed a formal protest on April 24, 2026, urging the Federal Energy Regulatory Commission (FERC) to reject Bethesda-based Hull Street Energy’s plan to acquire the 677-megawatt Lee County Generating Station in Dixon, Illinois, and the 590-megawatt Tait Electric Generating Station near Dayton, Ohio, from Houston-based private equity firm Rockland Capital.

The two plants, which together provide 1,267 MW of peaking capacity, are currently part of PJM’s capacity market, ensuring grid reliability during periods of high demand. Monitoring Analytics warned that Hull Street Energy’s dual role as both a power plant owner and a developer of data center infrastructure could create conflicts of interest, potentially allowing the company to redirect generation capacity away from the broader PJM market to serve its own data center projects.

The transaction raises questions about HSE’s role as both an owner of generation and developer of data centers in the PJM market that have not been answered in the application.

Monitoring Analytics filing with FERC, April 24, 2026

Strategic Plants at the Center of the Dispute

The Lee County Generating Station, a natural gas-fired simple-cycle facility, was acquired by Rockland Capital in October 2017. The plant consists of eight GE frame 7EA gas turbines and is designed to provide rapid-response power during peak demand periods. The Tait Electric Generating Station, located in Dayton, Ohio, is a dual-fuel facility capable of running on both natural gas and diesel, with seven GE frame 7EA units and four GM IC diesel generators. Rockland Capital acquired Tait in May 2018.

Both plants are strategically positioned within PJM’s footprint, which covers 13 states and the District of Columbia, serving approximately 65 million people. PJM’s capacity market is designed to ensure that sufficient generation resources are available to meet future demand, with plant owners compensated for maintaining available capacity regardless of whether it is dispatched.

Data Center Expansion Adds to Regulatory Scrutiny

The market monitor’s opposition highlights broader concerns about the growing demand for electricity from data centers, which are increasingly being built near existing power generation assets. Monitoring Analytics noted in its filing that Hull Street Energy’s affiliate, Energy Transition & Environmental Management (ETEM), is redeveloping the retired Sammis power plant site in Stratton, Ohio, into an energy and data center campus. The monitor argued that this dual role could allow Hull Street Energy to prioritize its own data center operations over PJM’s broader reliability needs.

“The transaction could result in HSE redirecting the plants away from the grid operator’s capacity market to just serve data centers,” the market monitor stated in its FERC filing. The concern reflects a growing tension in energy markets, where data center operators are seeking dedicated power sources to meet their rapidly increasing electricity demands, often at the expense of traditional grid reliability mechanisms.

Hull Street Energy Defends the Acquisition

Hull Street Energy, a private equity-backed power infrastructure firm, announced the acquisition of the two plants on March 23, 2026, framing the deal as an expansion of its Milepost Power portfolio. The company emphasized the strategic value of the plants’ locations within PJM, which it described as “critical to supporting grid reliability and the energy transition.”

In a statement released at the time of the announcement, Hull Street Energy did not directly address the market monitor’s concerns but noted that the acquisition aligns with its broader strategy of investing in flexible generation assets. The company has not publicly responded to the FERC filing as of April 28, 2026.

Regulatory and Market Implications

The FERC filing by Monitoring Analytics marks the first major regulatory hurdle for the deal, which must receive approval from both FERC and PJM before it can proceed. FERC has not yet scheduled a hearing or indicated a timeline for its decision, but the market monitor’s opposition suggests the review process could be contentious.

The dispute also underscores broader challenges facing PJM and other grid operators as data center demand surges. Data centers, which require massive and uninterrupted power supplies, are increasingly seeking direct access to generation assets, bypassing traditional wholesale markets. This trend has raised concerns among regulators and market participants about the potential for market distortions, reduced grid reliability, and higher costs for consumers.

PJM’s capacity market is designed to ensure that generators are compensated for maintaining available capacity, regardless of whether that capacity is actually dispatched. If Hull Street Energy were to withdraw the Lee County and Tait plants from PJM’s capacity market to serve its own data centers, it could reduce the overall pool of available generation, potentially leading to higher capacity prices for remaining market participants.

Next Steps in the Regulatory Process

FERC will now review the market monitor’s filing alongside Hull Street Energy’s application and any responses from other stakeholders, including Rockland Capital and PJM itself. The commission has the authority to approve, reject, or conditionally approve the transaction, with conditions potentially including requirements to maintain the plants’ participation in PJM’s capacity market for a specified period.

If FERC approves the deal, Hull Street Energy would still need to secure approval from PJM, which could impose additional requirements to address reliability concerns. The outcome of the review process could set a precedent for future transactions involving power plants and data center developers, particularly in regions with high data center growth, such as Northern Virginia, Ohio, and Illinois.

For now, the fate of the 1,267 MW of generation capacity remains uncertain, with industry observers closely watching how FERC and PJM balance the competing demands of grid reliability, market integrity, and the burgeoning data center sector.