PJM Interconnection proposes new rules that would prioritize curtailment of new 50MW+ data centers over residential customers during grid shortages, mandating on-site generation to avoid blackouts.

PJM Interconnection, the grid operator serving 67 million people across 13 states and Washington, D.C., has asked federal regulators to approve rules that would prioritize cutting power to new data centers over households during supply shortages, according to Reuters. The filing with the Federal Energy Regulatory Commission (FERC) follows two consecutive capacity auctions that failed to secure sufficient generation. PJM’s board projects approximately 70 GW of new large load by 2038, contrasted against roughly 15 GW of generation retired since 2022.

The proposed Interim Resource Adequacy Service applies exclusively to new loads of 50 MW or more at a single site that connect without securing their own generation or alternative supply by June 1, 2027. Existing facilities remain unaffected. Under the proposal, these new large loads would be curtailed before PJM deploys Pre-Emergency Load Management programs, which compensate other customers for reducing consumption during grid stress.

To enforce this framework, PJM is establishing a Large Load Registry to track the location and megawatt draw of every facility exceeding 50 MW within its territory, along with whether each site brings its own supply. Affected customers would receive compensation at a FERC-approved hourly rate set at 50% of the penalty rate PJM currently pays existing demand-response resources during full grid emergencies. Operators may waive this payment in accordance with the White House’s Ratepayer Protection Pledge.

PJM does not possess the authority to independently cut power to individual sites. The operator stated it would need to rely on utilities and state governments to execute reductions, which is why registry data will be shared with states to establish load-shedding priorities. Virginia, home to the world’s largest data center cluster, has already mandated operators to fund their own dedicated grid infrastructure.

Data centers in PJM’s territory were previously curtailed under a Department of Energy emergency order issued in May. That directive allowed the operator to call upon large loads with backup generation as a last resort ahead of rolling blackouts. During that heat event, PJM expected less than 5,800 MW of reserves, with Maryland and Virginia experiencing the most strain. Thursday’s filing aims to convert that temporary emergency authority into a permanent operational mechanism.

In July, PJM’s capacity auction for the 2028/29 delivery year reached its $325 per megawatt-day price cap and still fell short of reliability requirements by approximately 6,800 MW. PJM’s independent market monitor attributed a 75.5% increase in regional power costs directly to data center demand. To address the immediate shortfall, a one-time backstop procurement running from September 30 through October 21 will accept offers capped at $555 per megawatt-day. Looking ahead, starting with the 2029/2030 auction, PJM plans to entirely exclude new large loads that do not provide their own supply from its procurement calculations.