A high-stakes power decision is looming for Maryland, 12 other states, and Washington, D.C., as PJM Interconnection, the operator of the region's electric grid, weighs how to handle surging electricity needs that come hand in hand with data centers.
At the center of the debate are two questions that could affect households: Who pays for new power generation, and who would lose electricity first if the grid's electricity supply falls short?
What's happening?
In the next few days, PJM is expected to make a final call on two data-center-related proposals following recommendations approved by its members in a June 30 vote.
Those proposals, as WYPR reported, are Reliability Backstop Procurement and Connect and Manage. One deals with contracts for new generating capacity, while the other covers how the grid would respond when demand exceeds available electricity.
Under the recommended Reliability Backstop Procurement approach, payment for new power plants needed for data centers would be negotiated between utilities and generators rather than charged to the general public, said Tom Rutigliano, a senior advocate with the Sustainable FERC Project at the NRDC.
"We were really worried about that because there was this risk that we'd build power plants on the public dime for data centers, and then if the data centers didn't show up or things changed, it could show up in everyone's bills," Rutigliano said.
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Why does it matter?
Data centers are becoming a major force in electricity planning because they consume enormous amounts of power 24/7. As more facilities come online, utilities and grid operators are under increasing pressure to expand supply without passing the financial burden onto residents. Utility bills can also increase due to these facilities, as a Harvard lecturer warned that the rapid growth of AI data centers could lead to electrical costs up to 14% higher.
PJM's pending decision matters for people already facing high utility costs. If the rules are not strict enough, households could be forced to essentially help pay for infrastructure built primarily to support large commercial users.
Connect and Manage remains unresolved. PJM members did not settle on an approach, leaving open the question of who should direct emergency response when electricity supply falls short: individual states or PJM itself.
The answer could determine whether ordinary customers face a greater risk of curtailments or rolling blackouts during periods of heavy demand.
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What's being done?
One recommendation is that new power generation for data centers should not default to being financed by residents. If the PJM Board of Managers approves that approach, it could help shield ratepayers from some future costs.
Meanwhile, Maryland is advancing its own data-center policies. Under the Utility RELIEF Act, the state is creating a "Voluntary Clean Capacity Rating Program," and the Maryland Public Service Commission is putting together a registration process for data centers.
"Stakeholders pretty clearly told PJM, 'No, you need to be in the lead on this, and you need to come up with a way that we can be sure if there's a shortage of power, the data centers are the ones who get turned off first, rather than just ordinary people and residential customers,'" Rutigliano said.
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