In late April, 2025, millions across Spain, Portugal, and parts of France experienced an 18-hour blackout due to a voltage fluctuation in Spain’s grid. At the time, Portugal was importing energy from Spain pursuant to interconnection agreements, similar to how states in the PJM region import energy from Pennsylvania. Spain’s problems quickly became issues for the entire Iberian region.

As PJM and PIOGA continue to ring the alarm bells about the Eastern U.S.’s fragile and undercapitalized energy grid, new questions are arising about the potential legal and liability issues should blackout disruptions occur within the PJM region. When a blackout of this scale occurs, who bears responsibility—the utility companies, energy producers, grid operators, or regulators?

Winter Storm Elliott from December 2022 provides a robust example. During that historic storm and cold snap, almost 25% of PJM’s generating capacity failed to deliver power, resulting in PJM actually becoming an energy importer for some hours. The various interconnection contracts and performance requirements set by the Federal Energy Regulatory Commission (FERC) led to 81 different parties, including PJM and dozens of energy producers and utilities, to settle complaints by various capacity market sellers and market participants for a total of $1.8 billion.

Specific to energy producers, the consequences for an Iberian-sized blackout could be severe. Again using Winter Storm Elliott as an example, at least one energy generator filed for bankruptcy following the storm as a result of more than $30 million in penalties being levied against it for failing to meet its production obligations. Producers could face both private, contractual liability as well as regulatory actions for failing to supply power plants and ultimately, the grid, with the requisite fuel needed. While PJM acted after Winter Storm Elliott to reduce the penalties stipulated for in PJM agreements, severe contractual and regulatory consequences remain possible should an Iberian-level blackout occur in the Eastern U.S.

Winter Storm Elliott and the Iberian blackout serve as perfect illustrations as to why increased infrastructure building, movement of more energy, and grid reliability remain areas of high priority for PIOGA and the industry trade groups. Only a proactive approach will safeguard energy consumers, producers, and generators alike from potential liabilities and future disruptions.