PJM Interconnection announces it will curtail power to large data centers during grid shortages starting 2027, prioritizing residential and small-business load.

PJM Interconnection, operator of the largest power grid in the United States, will curtail electricity to data centers and other large users during power shortages, following an auction that fell short of securing additional generating capacity.

The move reflects accelerating data center construction nationwide. Facilities are projected to consume four times more electricity by 2035 than today, straining grid operators to keep pace with demand.

Curtailments will begin in June 2027 and affect only data centers drawing 50 megawatts or more. PJM is running a new auction to add generating capacity. Affected customers will receive compensation under a model similar to longstanding demand response programs, which provide large users advance notice—ranging from 30 minutes to several days—based on forecasted demand.

The policy will likely accelerate investment in on-site power generation at data centers, with many turning to diesel generators given fuel availability. However, federal rules restrict such generator use to 50 hours annually for demand response and 100 hours for emergencies.

PJM, which operates across Virginia to Illinois and serves 67 million customers, has drawn criticism over its management of generating capacity and large users. Wholesale electricity prices have nearly doubled over the past year—a trend PJM's independent market monitor attributes largely to data center demand.