Data Center Boom Forces US Grid To Ration Electricity
PJM Interconnection, the operator of the largest electricity grid in the US, plans to implement a policy by June 2027 that will temporarily cut power to large data centers (50MW+) during electricity shortages. This decision comes as surging demand, driven by AI infrastructure, strains the grid, and a recent auction failed to secure enough new power generation. The policy aims to manage grid stress and may encourage data centers to use on-site power or diesel backups.
PJM Interconnection, which manages the largest electricity grid in the United States, has announced a new policy to temporarily curtail power to large data centers during periods of electricity shortages. Slated to take effect in June 2027, the policy will apply to data centers consuming 50 megawatts or more of electricity. This move addresses escalating grid strain, largely attributed to the rapid expansion of artificial intelligence infrastructure, following an unsuccessful auction to secure sufficient new power generation.
The proposed policy may incentivize data centers to develop their own on-site power solutions or increase reliance on diesel backup generators, alternatives that are typically more expensive and could potentially lead to increased pollution. PJM, which serves a vast customer base of 67 million, has faced scrutiny as wholesale electricity prices have risen in tandem with growing data center demand across its service territory.
A recent poll highlights public concern regarding the data center boom, with 77% of Americans expressing worry about higher electricity bills and a lack of public input in related deals. Furthermore, 71% of respondents support the implementation of stricter rules or limits on new data center construction, reflecting a broader public desire for regulatory oversight.