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No more PJM data centers unless they can be reliably served: market monitor - PJM’s market monitor is urging FERC to block new data center connections unless the grid can reliably serve them. With $16.6 billion in added capacity costs already hitting ratepayers, unclear rules risk higher bills, reliability failures, and a two-tier grid where households absorb the downside of AI-driven demand growth.
PJM’s Interconnection market monitor is warning the Federal Energy Regulatory Commission (FERC): to not let new data centers connect unless the grid can serve them reliably.
A few months ago, PJM stakeholders tried to set new rules for adding massive loads. They failed to reach an agreement. The market monitor then filed a formal complaint. The monitor warned that PJM might permit data centers to come online even when there is not enough generation or transmission to support them. That would mean planned outages for those sites and for the neighborhoods nearby.
The cost impact is already visible. Data center growth pushed about $16.6 billion in extra capacity costs into PJM’s last two auctions. Without a clear framework, every new project adds more pressure to bills and reliability.
If the grid cannot serve a data center reliably, then who pays to fix the gap? Will developers build private generation and batteries? If they do, who pays for the shared transmission and backup that the whole region still needs? In a storm, who gets the next transformer or the next repair crew? The buyer with the deepest pockets.
Some states are testing “Bring Your Own Generation” or new tariffs to speed up development. These options can help move projects faster. They also shift risks and raise fairness issues. You can end up with a two-tier system where some customers are protected and everyone else pays the cost of keeping the grid balanced.
What needs to happen next? FERC should clarify PJM’s authority to require adequate generation and transmission before new large loads are allowed to connect. New rules must protect existing customers. They should set clear, predictable standards for developers. And they should prevent costs from being pushed onto households that did not create the demand.
PJM can support the data economy and protect reliability at the same time. But that requires clear rules, not assumptions.
What standard should decide who gets to connect to the grid and when?