PJM seeks power to cut data centers during grid emergencies

PJM Interconnection, the largest grid operator in the United States, has proposed a new framework that would require data centers and other large electricity consumers to switch to backup generation during periods of acute supply stress. The plan, filed with federal regulators, is designed to protect residential customers from being disconnected during emergencies.

The proposal introduces an emergency procedure under which utilities would be notified to reduce or transfer demand from major power users before any action is taken to cut supply to households. PJM has acknowledged that it currently lacks the legal authority to enforce such curtailments and would need the cooperation of individual state governments to implement the framework.

The move comes as PJM faces a significant reliability gap. Its most recent capacity auction cleared at the maximum price of $325 per megawatt-day, yet the operator still fell short of its reliability requirement by approximately 6.8 gigawatts. That shortfall raises the risk of blackouts across the region, which serves 67 million people from Washington, D.C., to Chicago.

PJM has also proposed creating a registry for data centers and other very large energy users to track their locations and electricity consumption. The initiative aligns with the Ratepayer Protection Pledge, a non-binding federal effort to shield residential customers from costs associated with data center power demand.

The proposal highlights growing friction between rapid data center expansion and grid capacity, particularly in Virginia, which hosts the world's largest concentration of such facilities. Residents there have expressed concerns about bearing the rising costs of new power infrastructure for developments they view as intrusive.