PJM’s New Deal for Data Centers: Bring Power or Face Cuts

PJM Interconnection, a regional electricity grid operator, has proposed a new framework that would allow large new electricity users like data centers to begin operating before sufficient new power capacity is built to support them. Under this conditional reliability approach, any portion of a facility's power demand that is not backed by new capacity could face earlier power cuts during emergencies. Data centers and other large loads can reduce or avoid these cuts by bringing their own new power sources, such as generation facilities or energy storage, to the grid. The proposal has drawn opposition from market monitors and state regulators who argue that the rules for verifying and tracking these facilities lack sufficient rigor and transparency.