PJM Moves to Fast-Track Data Center Connections as Power Demand Surges

PJM Interconnection and its stakeholders on March 26 advanced a set of proposals aimed at accelerating the connection of large-load customers, including data centers, while addressing mounting reliability and affordability concerns. The grid operator’s Markets and Reliability Committee approved two issue charges to examine a “connect-and-manage” approach, establishing a dedicated senior task force set to begin work March 31.

The proposed framework is designed as an interim solution to address a growing mismatch between rapid electricity demand growth and slower deployment of new generation resources. Under the approach, any temporary shortfall in available supply would be assigned to entities seeking to connect large loads, ensuring that system reliability is preserved as new capacity comes online.

A key element under consideration includes the development of an emergency procedure that would allow grid operators to direct load-serving entities to curtail demand under constrained system conditions. Such measures are expected to be used sparingly and only to prevent broader disruptions. Stakeholders broadened the scope of this discussion by incorporating elements from a proposal developed by a data center industry group, which was subsequently withdrawn in favor of the consolidated effort.

In parallel, Exelon Corporation introduced a complementary proposal focused on enhancing customer flexibility. The measure would allow large-load customers to interconnect ahead of necessary transmission upgrades by adopting mitigation strategies such as agreeing to curtailment provisions or deploying on-site backup generation or energy storage systems.

The grid operator also launched an expedited stakeholder process to develop a one-time reliability backstop procurement mechanism. The proposal would secure additional future power supplies, with costs assigned to large users, in response to tightening reserve margins. The 2027/ 2028 delivery year auction cleared sufficient resources to meet projected demand but fell 5.6 percent, or 6,600-megawatt, short of the target reserve margin.

The board directed stakeholders to finalize near-term solutions by year-end, alongside broader efforts to improve interconnection timelines and stabilize capacity market outcomes. Separate filings at the Federal Energy Regulatory Commission on Feb. 27 seek to extend auction price controls and accelerate studies for qualifying generation projects, highlighting the urgency of aligning supply with rapidly increasing demand.