On Friday, PJM Interconnection proposed a new framework for connecting data centers and other large electricity users to its power grid, requiring them to secure new generation or face curtailment during periods of severe supply shortages.
The proposal, filed with the Federal Energy Regulatory Commission, seeks to manage a surge in electricity demand from data centers while protecting grid reliability and limiting the impact on existing consumers.
PJM said electricity demand in its region is forecast to grow by 32 gigawatts between 2024 and 2030, with data centers accounting for about 30 GW of that increase.
Under the proposal, new large-load customers that bring their own power supplies would be connected under a framework consistent with PJM's Ratepayer Protection Pledge.
Customers that do not secure new generation would instead be subject to a new Interim Resource Adequacy Service, or IRAS.
The service would allow PJM, during periods when electricity supplies approach critically low levels, to direct utilities to reduce or shift demand from newly connected large-load customers before taking measures that could affect traditional consumers, including households.
"Large loads, most notably data centers, have given rise to resource adequacy shortfalls, and associated real-time operational issues that IRAS is intended to address," PJM said in its filing.
The framework would require utilities and other load-serving entities to secure new generating capacity equal to or greater than the combined peak demand of new large-load customers.
PJM could direct the affected zones to reduce electricity demand during emergencies based on the area's share of new large load that is not backed by new generation if utilities fail to do so.
Such curtailments would occur before PJM calls on existing load-management customers that are compensated for reducing electricity use during emergencies.
The largest US power grid operator said the proposal would preserve state authority over retail electricity service and cost allocation. States and local utilities would determine how the costs associated with demand reductions are distributed among customers, PJM said.
Large-load customers ordered to reduce consumption could receive credits for supporting grid reliability, although they could waive such compensation in line with the Ratepayer Protection Pledge.
PJM, starting with the 2029/2030 capacity auction, also proposes excluding new large loads that have not brought their own new power supplies when determining the amount of future capacity that needs to be procured.
The proposal would apply to large loads whose capacity requirements have not been met through new generation or through PJM's Reliability Backstop Procurement process, which is designed to address projected capacity shortfalls beginning in June 2027. PJM asked FERC to approve the proposal within 60 days.