PJM’s attempt to manage data center demand by letting them skip backup power payments sparked backlash from tech giants, utilities, and state leaders. With demand surging and no new supply, the risk of blackouts and rising bills grows.
PJM Interconnection's first attempt to manage exploding data center demand wasn’t a real solution.
Their idea was to let big data centers skip paying for backup power in capacity auctions, to keep prices from going up. In exchange, PJM said it could cut power to those data centers first if the grid got overloaded.
The problem is you can’t curtail a data center. They need 24/7/365 power, and PJM knows that.
Here’s how the idea landed with stakeholders:
- ●Data center companies (Amazon, Google, Meta, Microsoft) rejected the idea. Their message to PJM was blunt: “Don’t put this on us. Fix your forecasting, interconnection, and transmission planning.”
- ●PJM’s own market monitor warned that if 10,000–30,000 MW of new load comes in without new supply, it will cause blackouts, brownouts, and price increases.
- ●Power producers and utilities (Exelon, Constellation, LS Power) said the plan overreaches PJM’s authority, undermines market rules, and could discourage new investment in generation.
- ●Governors of Illinois, Maryland, New Jersey, and Pennsylvania called the proposal unpredictable and urged PJM to focus instead on accurate load forecasting, better regional transmission planning, and interconnection improvements.
What’s happening here is finger-pointing:
- ●PJM says the issue is data centers using too much power.
- ●Data centers say PJM isn’t expanding the grid fast enough.
- ●Utilities argue it’s PJM’s problem.
- ●States blame utilities or regulators
While they pass the blame, no one is answering the real questions:
- ●Where will the actual kWhs come from?
- ●How much will it cost to generate and deliver them?
- ●And who’s on the hook to pay for it?
- ●What happens to residential rates, and why isn’t their voice at the table?
Everyone is talking past each other. Endless studies and forecasts, but not a single new megawatt added today.
Meanwhile, demand keeps going up, transmission lines are decades old, projects like Grain Belt Express, which can bring energy from the Midwest to the East, sit stuck in the approval process, and rates keep rising. And the ones stuck paying the price are households and small businesses.
The solution isn’t accounting tricks. It’s decisive leadership: honest long-term planning, fair cost-sharing, and faster upgrades to the grid itself. Without that, the blame game continues moving, and ratepayers are the ones getting burned.
https://www.utilitydive.com/news/pjm-stakeholders-ncbl-data-center-fast-track/759096/
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