PJM Interconnection orders data centers to secure dedicated power supplies or face rolling blackouts; grid at capacity limit.

PJM Interconnection, the largest US power grid operator managing the electric grid across 13 states and the District of Columbia and serving roughly 65 million people, has rolled out a set of reforms designed to stop data centers from dumping their enormous energy costs onto everyday consumers. The policy, outlined in a January 16, 2026 directive from PJM's Board, essentially creates a two-tier system: data centers must either bring their own generation capacity, or accept the very real risk that their power gets cut during shortages.

The urgency of this intervention is reflected in surging capacity auction prices. In the 2024/2025 auction, prices sat at $28.92 per megawatt-day. For the 2026/2027 cycle, that figure exploded to $329.17 per megawatt-day—more than a 10-fold increase in just two years. The 2027/2028 Base Residual Auction cleared 5.6% below the target reserve margin, signaling further stress on the grid.

AI-linked data centers are consuming electricity at a pace that grid planners never anticipated. These facilities are projected to add tens of billions of dollars in additional system costs onto PJM's network through the late 2020s. Without intervention, those costs would flow directly into the electricity bills of households and small businesses across PJM's footprint.

PJM's solution, dubbed "Bring Your Own New Generation" (BYONG), creates a framework where any facility adding 50 MW or more of load at a single point of interconnection must either supply its own incremental generation or accept curtailment risk. The BYONG initiative includes an expedited interconnection track targeted for August 2026.

Alongside BYONG sits a "Connect and Manage" framework that prioritizes which facilities get electricity during grid shortages. Facilities that haven't brought their own generation get curtailed first. These reforms emerged from extensive stakeholder discussions throughout late 2025 and carry backing from both the Trump administration and governors across PJM's territory.