PJM Interconnection warns data centers about power supply requirements
PJM Interconnection, the nation's largest power-grid operator, has issued a directive requiring data centers to secure their own power supplies or face electricity curtailment during grid stress. This comes as massive new electricity demand, primarily from data centers, is straining the grid while generation capacity is not keeping pace. Pennsylvania Governor Josh Shapiro has already responded with an executive order directing state officials to seek rules aligning with PJM's notice.
PJM Interconnection, the largest power-grid operator in the United States, has issued a warning to data centers within its 13-state territory, including West Virginia, Ohio, and eastern Kentucky, as well as the District of Columbia. The directive from the PJM Board of Managers mandates that new large electricity loads, primarily data centers, must secure sufficient power to operate or risk being forced to reduce electricity use during periods of grid strain.
This action is a response to projections that data centers will add 70 gigawatts of demand by 2038, while PJM has lost 15 GW of generating resources since 2022. The grid operator has struggled to procure enough dependable capacity in recent auctions, leading to significantly higher capacity prices. PJM plans to create a registry for facilities using at least 50 MW, tracking their demand and power sources, and will implement a carrot-and-stick approach by June 2027, potentially requiring non-compliant facilities to cut consumption before residential customers.
Pennsylvania Governor Josh Shapiro has already responded to PJM's concerns, issuing an executive order on August 18. This order directs state officials to seek rules requiring utilities to curtail data centers before other customers if the facilities haven't secured incremental generation. Governor Shapiro's order also calls for assigning PJM backstop costs directly to data centers and removing them from Pennsylvania's fast-track permitting program. Large tech companies like Meta, Microsoft, and Amazon are cited as examples of firms already exploring nuclear energy solutions to meet their data center power needs, though these projects have long timelines.