PJM Proposes Cutting Energy For Data Centers That Don’t Bring Their Own
PJM, the nation's largest grid operator, has proposed a two-part plan to the Federal Energy Regulatory Commission (FERC) to address the escalating electrical demand from data centers. The plan includes funding for new power plants and encouraging data centers built after 2027 to provide their own energy supply or face service limitations. This aims to stabilize electricity prices and ensure grid reliability across PJM's 13-state service area.
PJM Interconnection, the largest grid operator in the United States serving approximately 67 million people across 13 states and Washington D.C., has submitted a two-part proposal to the Federal Energy Regulatory Commission (FERC).
The initiative aims to address the escalating electricity demand from data centers, which has contributed to surging energy prices in recent years. The first part of PJM's plan allocates up to $20 billion to fund new power plants, specifically to supply data centers constructed through 2027, with proposals for these plants to be sought on September 30 and funds awarded in December.
The second component of the proposal, intended for data centers built after 2027, encourages them to secure their own energy supply. PJM warns that it may limit service to data centers that do not implement such plans, prioritizing other customers during periods of insufficient power, with these rules expected to take effect by mid-2027. If approved by FERC, PJM has requested the commission issue an order by October 12, 2026. Tom Torres, chief of staff at the Ohio River Valley Institute, expressed concerns regarding the financial viability of this operation.