PJM Interconnection, the grid operator serving 67 million people across 13 states and Washington, D.C., asked federal regulators on Thursday to approve rules that would cut power to new data centers ahead of households during supply shortages, Reuters reports. The filing with the Federal Energy Regulatory Commission follows two consecutive capacity auctions that failed to secure enough generation, and PJM's board projects roughly 70 GW of new large load by 2038 against roughly 15 GW of generation retired since 2022.

Existing facilities aren't affected, with the proposed Interim Resource Adequacy Service applying only to new loads of 50 MW or more at a single site that connect without bringing their own generation, or otherwise securing supply, by June 1, 2027. Those facilities would be curtailed before PJM deploys Pre-Emergency Load Management, which are the demand-response programs that pay other customers to cut consumption during grid stress.

Attached to the scheme is a new Large Load Registry, which tracks the location and megawatt draw of every 50 MW-plus site in PJM's territory and whether it brings its own supply. Affected customers would be compensated at a FERC-approved hourly rate set at 50% of the penalty rate PJM pays existing demand-response resources during full grid emergencies. It’s understood that operators can waive that payment in line with the White House's Ratepayer Protection Pledge.

PJM can't actually flip the switch itself, however. The operator told Reuters that it lacks the authority to curtail individual sites and would need to rely on utilities and state governments to carry out the reductions, which is why the registry data will be shared with states to set load-shedding priorities. Virginia, home to the world's largest data center cluster, has already ordered operators to pay for their own dedicated grid infrastructure.

Data centers in PJM’s territory have been curtailed before under a Department of Energy emergency order issued in May, which enabled the operator to call on large loads with backup generation as a last resort ahead of rolling blackouts. PJM expected less than 5,800 MW of reserves during that heat event, with Maryland and Virginia under the most strain. Thursday's filing would turn that one-off emergency authority into an established mechanism.

In July, PJM’s capacity auction for the 2028/29 delivery year hit its $325 per megawatt-day price cap and still came up some 6,800 MW short of the operator’s reliability requirement. Its independent market monitor has attributed a 75.5% jump in regional power costs directly to data center demand.

A separate one-time backstop procurement, running September 30 through October 21 with offers capped at $555 per megawatt-day, aims to backfill the shortfall, and from the 2029/2030 auction onward PJM plans to exclude new large loads that don't bring their own supply from the demand it procures for at all.

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Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.