PJM’s data center power plan receives mixed reviews
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MORGANTOWN - PJM Interconnection’s proposed plan to deal with the power demands of data centers and other "Large Loads" is receiving mixed reviews.
PJM - the 13-state regional power grid operator - submitted its proposal for an Interim Resource Adequacy Service (IRAS) and a Large Load Registry to the Federal Energy Regulatory Commission in August.
The plan would enable PJM to keep track of Large Loads with significant power demands - 50 megawatts or more - and establish a path for Large Loads that don’t provide their own power to reduce their demand when the grid is strained to dangerous levels.
Dozens of responses filed with FERC since then have filled thousands of pages. Some of it is highly technical or full of legalese. But here is a sampling of some recent comments illustrating the variety of responses.
Democratic Rep. Frank Pallone Jr., ranking member of the House Energy & Commerce Committee, wrote to FERC on behalf of his caucus.
"I write in reference to two recent proposals from PJM designed to help shield Americans from the skyrocketing energy costs from power-hungry data centers," he said.
He supports some of PJM’s proposals, he said, but worries they don’t go far enough to protect families across the mid-Atlantic region. He urges FERC to approve them in part, with a few exceptions.
"Data centers are responsible for an increase in PJM capacity market costs of nearly $30 billion since the summer of 2024 - costs that my constituents will ultimately have to pay," he said. "Data centers are largely responsible for PJM's current reliability and cost crisis. The only way out is more generation, and the data centers responsible for PJM's issues should be the ones responsible for finding and incentivizing generation to fix those issues."
He acknowledges that FERC can’t allocate costs directly to data centers, but it must get as close as it can, by allocating costs not to the entire PJM region, but to the zones that are fueling data center growth.
He supports the Large Load Registry but said as much of it as possible must be public. "A registry of large consumers of electricity would be invaluable for improving forecasts of electricity demand, which even PJM has noted needs drastic improvement."
The Data Center Coalition opposes PJM’s plan, largely focusing on states’ rights.
"PJM continues to claim that states will be provided with complete discretion regarding how IRAS is implemented," it said. "But states have no ability to opt in or opt out of IRAS."
PJM will make the decisions, it said, on curtailing new Large Load customers without regard to the preference of individual states. "Failure to conform state policies to IRAS would risk subjecting all retail customers to interruption when PJM issues curtailment directives - a consequence that is so severe as to leave states with no option but to comply."
Also, it said, IRAS will result in customers in zones with new Large Loads subsidizing rate reductions for other customers within the PJM footprint, which is unfair.
Instead, the coalition said, FERC should reject the proposal and encourage PJM to work with stakeholders and the states to develop emergency procedures that accommodate, rather than dictate, the retail curtailment priorities of individual states.
A new plan should develop reforms that respect the jurisdictional boundaries. But, if FERC doesn’t reject IRAS outright, "it should direct PJM to establish a meaningful transition mechanism and delay implementation until June 1, 2028, to provide new Large Loads and state authorities a reasonable timeline to adapt."
Google said PJM’s IRAS will only make the generation capacity shortage problem worse. "It will chill investment and undermine efforts by companies, like Google, that are committed to bringing their own new capacity to PJM."
Google is actively procuring new capacity to cover its projected load growth, it said. But the IRAS will make it less likely that Google and other large customers can bring their own new capacity and avoid curtailment to a market governed by IRAS.
Reform is necessary, Google said. Demand is exceeding supply and is likely to continue that way.
But Google would prefer something like the natural gas transportation industry does: interruptible service, which doesn’t guarantee delivery to a customer. Federal code says, "the capacity used to provide the service is subject to a prior claim by another customer or another class of service and receives a lower priority than such other classes of service."
Google calls interruptible service "the missing link that would allow supply and demand to clear in the capacity market without creating pervasive uncertainty that would interfere with investment in new capacity."
In light of the criticism and alternative proposals, PJM defends its plan.
"The realities of the operational emergencies caused by the influx of new Large Loads endemic to PJM Interconnection demand a region-wide response at the wholesale level that simultaneously respects the jurisdictions of the 13 PJM states and the District of Columbia at the retail level," it said.
IRAS is just and reasonable and not unduly discriminatory or preferential, it said.
Opponents, such as the Data Center Coalition, said integrating large loads while maintaining a reliable grid and protecting existing ratepayers is a responsibility shared between the states and PJM.
"The time to act is now," PJM said. "At bottom, IRAS is a just and reasonable means of managing the influx of new Large Loads into the PJM Region while maintaining resource adequacy, reliability and affordability in a manner that respects the divide between state and federal authorities, provides a framework that accommodates and in fact welcomes further state action, and avoids disrupting existing commercial arrangements."