Federal regulators reject PJM proposals for data center power management

Federal energy regulators have rejected two major proposals from PJM Interconnection designed to manage the surging electricity demand from data centers. One rejected proposal would have mandated that large data centers reduce or shut off power during shortages unless they secured sufficient new generation. A second proposal sought to establish a special electricity auction to ensure power availability for these facilities.

Regulators cited concerns regarding the operational mechanics of the proposals and the distribution of costs. PJM, which manages electricity transmission across Maryland and 12 other states, has warned of potential power shortages as early as 2027. While new reporting requirements for large electricity users were approved, PJM must now revise its plans to address questions regarding grid reliability and the potential for increased costs to existing customers.