Federal regulators rejected PJM's proposed rules for supplying power to data centers.

Federal energy regulators have rejected two major proposals from PJM Interconnection aimed at managing growing electricity demand from data centers. One proposal would have required large data centers to reduce or shut off power during electricity shortages unless they secured enough new generation to meet their needs. A second proposal would have created a special electricity auction to help ensure enough power is available for these facilities. Regulators raised concerns about how the proposals would work and who would bear the costs, sending PJM back to revise its plans.

The decision comes as rising electricity demand from data centers puts growing pressure on the regional power grid. PJM, which manages electricity transmission across Maryland and 12 other states, has warned that the region could face power shortages as early as 2027. While federal regulators approved new reporting requirements for large electricity users, questions remain about how to protect existing customers from higher costs and reliability concerns.

For state and county policymakers, the debate highlights the regional impacts of data center growth, particularly as local governments weigh development decisions that could affect electricity costs and infrastructure needs beyond their borders.