FERC OKs part of PJM’s data center plan, rejects the rest
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MORGANTOWN - The Federal Energy Regulatory Commission has OK’d PJM Interconnection’s proposal to establish a Large Load Registry of data centers and other customers that demand large amounts of electricity.
But it has denied PJM’s proposal to also establish an Interim Resource Adequacy Service to 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. However, PJM can try again on this topic.
PJM filed its 435-page proposal in August. It drew dozens of responses from various entities, including utilities, states in its 13-state region, members of Congress, power customers such as Google, and consumer groups such as the Data Center Coalition.
FERC’s order spans 58 pages and goes into detail about the proposal and the responses for and against.
It recites PJM’s reason for the proposals. PJM told FERC it hosts the largest concentration of data center load in the world, and predicts load growth of 32 gigawatts from 2024 to 2030, with 30 GW of that coming from data centers.
PJM said that while it has seen generation capacity increase, the capacity shortfall has grown even more.
FERC accepted PJM’s new definition for a Large Load: a customer with a cumulative peak load of 50 megawatts or more at either a single site or at multiple affiliated sites within a one-mile radius.
It said it found the definition of Large Load "is just and reasonable and not unduly discriminatory or preferential." It distinguishes between larger loads where PJM needs visibility to ensure system reliability and smaller loads that don’t raise the same concerns.
FERC disagreed with opponents’ proposals to exclude manufacturing facilities and include only data centers, noting that both have essentially the same effects on the grid.
PJM’s Large Load Registry is intended to better forecast load growth and to study and provide new transmission services - and to share the registry with various agencies and organizations authorized to view it.
FERC said it agrees with PJM’s thinking on this matter.
However, on the Large Load definition, FERC denied PJM’s proposal to also create a definition of New Large Load: a new Large Load that would go into service after PJM’s proposed target implementation date of June 1, 2027, or an existing customer whose incremental growth would meet the 50 MW threshold after that date.
FERC rejected it in part because the definition is central to the portion of PJM’s proposal it also rejected, and because it doesn’t protect existing customers who already have Large Loads and add more demand. However, FERC denied this without prejudice so that PJM can readdress it in a new filing.
On the IRAS topic, PJM proposed that Load Serving Entities (which sell power to end-users) require New Large Loads to supply Bring Your Own New Capacity (BYONC) into the grid. In the event of a shortfall, Electric Distributors could reduce the demand of New Large Loads without a BYONC arrangement.
FERC noted that many protesters argued that the IRAS proposal intrudes on states’ authority by directly regulating retail customers, and compels states to implement a federal program.
FERC said that aspects of PJM’s plan present an impermissible intrusion on retail rate regulation and exceed FERC’s legal authority. FERC may regulate wholesale rates but not retail sales. New Large Loads would be retail customers.
While PJM argues, FERC said, that its plan doesn’t discriminate because New Large Loads are a new class of load that pose specific challenges to the transmission system, PJM hasn’t provided sufficient evidence to prove its point. PJM has historically treated existing and new loads in the same manner.
FERC encouraged PJM to provide further justification of its thinking on this topic.
Also, FERC said, PJM hasn’t provided sufficient evidence on why New Large Loads should be treated differently under its BYONC proposal.
Finally, FERC Commissioner David Rosner provided some additional insight in a short, separate concurrence.
He said, "To be clear, in an emergency, data centers not serving critical functions should be shut off before ordinary customers (Hint: homes, hospitals, and schools should never be curtailed before data centers).
"We need state regulators to establish clear rules for which customers should be curtailed first when circumstances require it," he continued. "And we need PJM to be ready to adjust their operations to this evolving paradigm. But such measures should only be taken when necessary to keep the system reliable, after voluntary demand response resources have been exhausted."