The nation’s largest grid operator plans to create a registry of data centers and other large energy users whose electricity may be curtailed during a power shortage.
PJM Interconnection announced the move Monday, along with plans for an extra capacity auction in September. The Reliability Backstop Procurement, as that auction is called, aims to cover the system’s peak demand after PJM’s most recent capacity auction fell about 60 gigawatts short.
The pair of decisions comes at a moment of existential crisis for PJM, which manages a power grid serving 13 states in the mid-Atlantic and Midwest. The grid operator faces bipartisan pressure from states as well as the Federal Energy Regulatory Commission to prove that it can manage unprecedented load growth across a sprawling region.
PJM forecasts new demand from data centers and other large loads will total 70 gigawatts by 2038. That “unprecedented” growth is compounded by the retirement of about 15 GW of generation since 2022, according to a Monday letter to stakeholders previewing federal regulatory filings.
“The region has reached a critical point in its resource adequacy outlook,” wrote Paula Conboy, chair of PJM’s Board of Managers. PJM’s board, she added, is also “acutely aware of the affordability pressures facing consumers.”
PJM’s membership has been split over which course of action its board should take, with only a single proposal out of two dozen garnering the necessary sector-weighted supermajority in a vote earlier this summer.
PJM’s board now says that proposal won’t work. The member-endorsed proposal — for a voluntary registry that could match large loads with new generation — “would not provide sufficient assurance” of covering the capacity shortfall, Conboy wrote.
Instead, the board is proposing to create a registry of new customers with at least 50 megawatts of peak demand, tracking their location, service area and whether they have their own power supply.
That registry would be the foundation of a new framework for curtailing power when the system is under stress. Starting in June 2027, large loads without their own generation could see their power curtailed before PJM deploys Pre-Emergency Load Management, the step before emergency measures.
PJM is proposing to compensate those large loads for curtailing their electricity, similar to other demand-response programs.
The grid operator said it would need help from states and the federal government to protect the public from data centers’ costs.
“The present trajectory of rapid load growth, tightening supply and rising capacity costs is not sustainable. The region needs substantial new investment in supply, and the central affordability question is how the costs of that investment should be allocated,” Conboy wrote in the letter.
“Because PJM does not have jurisdiction to allocate retail costs directly to individual data centers,” she added, “state action will be essential.”
