Data Centers Face Power Cuts Amid Grid Shortages
PJM Interconnection proposes rules to cut power to new data centers first during supply shortages, unless they bring their own electricity generation
PJM Interconnection, the grid operator serving 67 million people, has asked federal regulators to approve rules that would cut power to new data centers ahead of households during supply shortages. The proposal comes after two consecutive capacity auctions failed to secure enough generation, with PJM's board projecting a significant increase in new large loads by 2038.
## Background The proposed Interim Resource Adequacy Service would apply only to new loads of 50 MW or more at a single site that connect without bringing their own generation or securing supply by June 1, 2027. Existing facilities would not be affected, and those that bring their own supply would be exempt from the cuts.
## Large Load Registry A new Large Load Registry would track the location and megawatt draw of every 50 MW-plus site in PJM's territory, as well as whether it brings its own supply. Affected customers would be compensated at a FERC-approved hourly rate set at 50% of the penalty rate PJM pays existing demand-response resources during full grid emergencies.
## Impact on Data Centers Data centers in PJM's territory have been curtailed before under a Department of Energy emergency order, and Thursday's filing would turn that one-off emergency authority into an established mechanism. The independent market monitor has attributed a 75.5% jump in regional power costs directly to data center demand. The following table summarizes the key figures: | Category | Value | | --- | --- | | New large load projection by 2038 | 70 GW | | Generation retired since 2022 | 15 GW | | Price cap for capacity auction | $325 per megawatt-day | | Shortfall in capacity auction | 6,800 MW | | Offer cap for backstop procurement | $555 per megawatt-day |
## Future Plans PJM plans to exclude new large loads that don't bring their own supply from the demand it procures for, starting from the 2029/2030 auction. The grid operator would need to rely on utilities and state governments to carry out the reductions, and the registry data would be shared with states to set load-shedding priorities.
