PJM Proposes Data Center Framework to Protect Grid Reliability, Affordability

PJM Interconnection on Aug. 13 filed a proposal with the Federal Energy Regulatory Commission to establish a framework for connecting new large electricity customers, including data centers, while limiting the impact of their growing power needs on existing ratepayers. The plan would create an Interim Resource Adequacy Service for new customers that do not bring their own power supplies or have their capacity needs addressed through the Reliability Backstop Procurement process.

Under the framework, utilities and other load-serving entities would be expected to add new generation equal to or greater than the combined peak demand of new customers. If sufficient capacity is not added, the grid operator could direct affected areas to reduce demand from those customers during emergencies before requiring reductions from traditional load-management customers. This approach is intended to ensure that new electricity demand is supported by additional resources rather than shifting reliability costs to existing customers.

The proposal would also establish a Large Load Registry covering existing and new customers. States, utilities and regulators could use the database to identify customers that may be subject to the new service, while the regional operator would use the information to administer the program and other initiatives addressing changes in electricity supply and demand.

The filing follows the Ratepayer Protection Pledge introduced in March 2026 and expanded in July 2026, which calls for new large customers to build, bring or buy additional generation needed to meet their electricity requirements. The proposal notes that forecast electricity demand is expected to increase by 32 gigawatts between 2024 and 2030, with data centers accounting for 30 gigawatts of the growth.

Beginning with the 2029/2030 capacity auction, new customers that do not bring their own supply would also be excluded from calculations used to determine future capacity procurement requirements. Large loads curtailed during emergencies could receive compensation for supporting grid reliability, with states and utilities determining how related retail costs are allocated. Customers could also waive compensation.

The grid operator requested FERC approval within 60 days. The proposal forms part of a broader effort to address rapidly increasing electricity demand, including a July 31 proposal to conduct Reliability Backstop Procurement in September and October and an ongoing review of longer-term capacity-market reforms.