Federal regulators have rejected a plan that would have allowed PJM Interconnection to make certain data centers and other major electricity users reduce power consumption during grid emergencies.
The Federal Energy Regulatory Commission, or FERC, blocked key parts of PJM’s proposal while approving a separate system to track large electricity users. The decision gives PJM better visibility into rising demand but removes the emergency tool it wanted to use when new customers had not secured additional generation.
PJM operates the power grid across thirteen states and Washington, D.C. The operator has warned that data centers are pushing electricity demand higher at a time when new generation is not coming online quickly enough.
The rejected plan included two main pieces. Interim Resource Adequacy Service, known as IRAS, would have required certain large users to cut consumption during emergencies. A second framework, called Bring Your Own New Capacity, would have encouraged major customers to secure additional generation to support their expanding electricity needs.
FERC said those proposals either went beyond the commission’s authority or were not adequately supported as fair and nondiscriminatory. The commission also cited inconsistencies between PJM’s explanation of the plan and the tariff changes it submitted.
PJM has projected that it could lack enough capacity to meet regional reliability requirements beginning with the 2027-2028 delivery year. The operator identified data center growth and the rapid pace of new connections as major reasons for the expected shortfall.
FERC did approve PJM’s Large Load Registry. The system will collect information about major electricity users, including where they are located, how much power they expect to need and when they anticipate connecting to the grid.
That information should help PJM forecast future demand and plan its transmission system. But the approval does not give the operator the rejected authority to require certain new users to reduce consumption during an emergency.
Why It Matters
The dispute is not simply about a technical filing. It is about who should carry the risk when electricity demand grows faster than new generation. PJM wanted large loads to take on part of that responsibility through emergency reductions or additional power supplies. FERC rejected those tools in their submitted form while accepting the information-gathering piece. That leaves data centers and other major users clearly visible in the system, but without the proposed obligations. It also leaves existing customers and the grid operator waiting for a workable way to protect reliability and affordability, concerns identified in the filing. A sharper forecast can clarify the problem, but it cannot solve a supply gap by itself.
The ruling keeps the next step open rather than ending the dispute. PJM may submit a revised proposal that addresses the weaknesses FERC identified, but the source does not establish what that plan would contain or whether it would receive approval. For now, the central tension remains: expanding data center demand is adding pressure, while PJM has more information about future needs but not the proposed mechanism for compelling certain users to cut power during emergencies. The affected parties include major users planning new connections, existing customers PJM said should not absorb the imbalance and regulators deciding whether a future response is lawful and fair.
Jeff Shields, a senior manager for external communications at PJM, described acceptance of the registry as progress toward addressing the reliability challenge. FERC also left the door open for a revised filing. Until then, PJM can track the coming demand more closely, but its proposed emergency requirements for large new users remain rejected.
Source: The Liberty Daily
