Largest U.S. Grid Operator Plans Rolling Power Cuts for Data Centers
PJM Interconnection, the operator of the largest electrical grid in the United States, announces it will temporarily cut power to data centers and other large users during shortages to prevent widespread blackouts. The decision follows a capacity auction that falls short of meeting growing demand, driven largely by breakneck data center construction across a territory spanning from Virginia to Illinois. Wholesale electricity prices in the region have nearly doubled over the past year, with PJM's independent market monitor placing much of the blame on data centers.
The curtailment program begins in June 2027 and applies only to data centers consuming 50 megawatts or more. Similar to traditional demand response programs long used by manufacturers, affected customers receive advance notice ranging from 30 minutes to several days and qualify for financial compensation. PJM covers 67 million customers and continues running additional auctions to attract new generating capacity, though critics assail the operator's overall handling of surging demand from large new users.
The new policy pushes many data center operators toward on-site power generation or backup diesel generators, which cost more to operate and produce significantly more pollution. Federal rules permit diesel generators to run up to 100 hours annually for emergencies and maintenance. The environmental impact draws increasing scrutiny, as evidenced this week when Vantage Data Centers faces criticism for coordinating with Virginia regulators to challenge a report linking backup generators to tens of millions in annual health damages for nearby residents.