PJM Interconnection, operator of the largest power grid in the United States, has said it will curtail electricity to data centers and other large users during power shortages after an auction to secure additional generating capacity fell short.
The decision comes as data center construction accelerates nationwide, with facilities expected to consume four times more electricity by 2035 than they do today, straining grid operators tasked with keeping pace.
PJM will not begin curtailments until June 2027, and only data centers drawing 50 megawatts or more will be affected. The grid operator is running a new auction aimed at adding generating capacity. Affected customers will be compensated, following the model of longstanding demand response programs that give large users advance notice ranging from 30 minutes to several days depending on forecasted demand.
The policy is likely to push data centers toward on-site power generation, with many turning to diesel generators due to fuel availability, though federal rules cap such generator use at 50 hours annually for demand response and 100 hours for emergencies.
PJM has faced criticism over its handling of new generating capacity and large users. The grid operator’s territory spans from Virginia to Illinois, serving 67 million customers, while wholesale electricity prices have nearly doubled over the past year, a trend PJM’s independent market monitor has attributed largely to data center demand.
