PJM Interconnection, the grid operator serving about 67 million people across 13 states, is trying a new approach to keep fast-growing data-center demand from driving up electricity bills for other customers.
Under the idea, very large new customers would need to secure their own power supplies or risk being cut off during emergencies.
What's happening?
According to Capitol News Illinois, PJM Interconnection has filed proposals with federal regulators that would place responsibility on states and utilities to make sure huge new electricity users — especially data centers — have enough power arranged to support their expansion.
Without some other approach, meeting projected demand growth could leave homes and businesses absorbing much of the expense. PJM estimates that data centers and other large users may add about 30 to 34 gigawatts of demand in the early 2030s, with that total reaching 70 gigawatts by 2038.
Under one proposal, Capitol News Illinois reported, PJM would keep a registry of customers using at least 50 megawatts, noting where they are located and whether they "bring their own supply." Those that secure new capacity through bilateral deals — such as upgraded plants, renewable projects, storage, or demand-response resources — could avoid being shut down during times of high demand.
Beginning in June 2027, PJM said customers that fail to do that "will be subject to curtailment prior to deployment of Pre-Emergency Load Management" — meaning they could be disconnected before broader emergency measures are used.
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Why does it matter?
Capacity prices in PJM's market have climbed sharply, and those costs ultimately flow through to utility customers.
PJM's June capacity auction matched the $16.4 billion record set in December.
If the grid is forced to build or buy huge amounts of power for AI-related development without clear cost controls, everyday customers could end up facing even steeper monthly bills.
PJM has struggled to bring enough new energy online even as coal and gas plants retire and electricity demand climbs. Even projects that have made it through PJM's interconnection queue — including solar, wind, storage, and gas — can still be delayed by financing, permitting, or upgrade issues.
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Aurora Energy Research's Julia Hoos, who covers Eastern U.S. power markets, said PJM is now "making a definitive request to the states to accomplish what it needs."
What's being done?
The tougher parts of the plan would have to be carried out by states and the utilities they regulate, because they — not PJM — decide which customers connect to local systems. That arrangement suggests PJM has shaped its strategy to stay within legal boundaries.
A second measure would let utilities use an emergency "reliability backstop procurement" auction to line up capacity if big new users have not brought enough on their own. That could reduce reliability risks, though it may not ensure that data centers directly shoulder all related costs.
Some states are already weighing "large load tariffs" and related policies to connect grid costs more directly to the developments causing them. Citizens Utility Board campaign manager Clara Summers said during a July 30 webinar, "We've been saying throughout this whole process that there is a role here for PJM, and there is a role here for the states."
Decisions by state utility commissions and lawmakers could determine whether rising data-center demand drives up local rates — or whether new clean power, storage, and demand-response resources help absorb that growth more fairly.
Hoos said PJM's filing could become its first "comprehensive proposal" for managing large-load growth. Former Kentucky Public Service Commission chairman Kent Chandler summed up the market reality, saying, "Some of these guys have bigger cash piles that they can throw at the problem."
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