Rep. Pallone urges FERC to establish stronger interconnection and rate protections for grid customers bearing data-centre load

Energy and Commerce Committee Ranking Member Frank Pallone, Jr. has urged the Federal Energy Regulatory Commission to approve and strengthen recent proposals from PJM Interconnection regarding its handling of data centers.

In a letter to FERC Chairman Laura Swett, Pallone stated that while he supports many provisions in the proposals, he believes they do not go far enough. "Americans are deeply frustrated and concerned that the rapid and unceasing development of data centers is driving up their monthly energy bills," he wrote. "At the end of the day, protecting Americans' power bills is FERC's responsibility. I am concerned that they do not go far enough and believe FERC should use its authority to improve PJM's proposals to protect families across the mid-Atlantic region."

Data centers have become a significant cost driver for PJM's customers. The facilities have been responsible for an increase in PJM capacity market costs of nearly $30 billion since the summer of 2024. Electricity demand is expected to accelerate dramatically over the next decade, with PJM forecasting a roughly four percent annual increase in peak demand driven almost entirely by data centers.

PJM has proposed three reforms: requiring data centers to pay for new power plants necessary for grid reliability, requiring them to bring their own new generation capacity online, and creating a registry of data centers within PJM's boundaries. Pallone supports these goals but argues that FERC should strengthen them by ensuring data centers pay for all costs they cause—not just reliability infrastructure; making the requirement for new generation capacity permanent; and making the data center registry public so communities can access the information needed to protect themselves.

Pallone highlighted the real impact on his constituents, noting that last year they experienced a twenty percent increase in power bills, fueled by surging capacity market prices. With over ninety percent of PJM's forecasted demand growth through the end of the decade coming from data centers, the stakes are high. "If FERC gets this right, then it will have granted American families a measure of protection from the costs imposed by data centers," Pallone wrote. "If the Commission falls short, then American families will pay the price."

Pallone has consistently advocated for substantial federal safeguards against data centers' effects on air quality, water resources, grid reliability, and utility costs. He has previously stated that if Congress fails to adopt strong guardrails, a federal moratorium on data centers should be implemented. While he acknowledges that PJM's proposed guardrails are insufficient to fully protect consumers, he views them as meaningful progress that FERC should approve—provided it incorporates the critical improvements outlined in his letter.