PJM to curtail power for data centers above 50 MW during grid shortages
PJM Interconnection will begin curtailing electricity supply to data centers rated at 50 MW or more during shortages from June 2027. The measure follows a capacity auction that failed to secure enough new generation for the largest US electrical grid, which serves 67 million customers from Virginia to Illinois.
Data center growth is testing grid capacity
Rapid construction has increased demand faster than generators and transmission infrastructure can be added. Data centers are expected to consume four times as much electricity in 2035 as they do today, intensifying competition for dependable capacity.
The pressure is already affecting costs. Wholesale electricity prices across PJM have nearly doubled over the past year, and the grid's independent market monitor attributed much of that increase to data center demand. Curtailment is intended to protect the wider system from blackouts when supply becomes insufficient.
How temporary curtailment will work
The policy applies only to facilities of at least 50 MW. Affected customers will be compensated, following the model of demand-response programs long used by manufacturers and other large electricity consumers. Such programs commonly provide notice ranging from 30 minutes to several days, depending on forecast demand.
PJM is running another auction to procure generating capacity. Meanwhile, operators may install on-site generation or rely more heavily on backup systems. Diesel generators remain common because fuel is widely available and can be stored at the facility, although they cost more to operate and produce greater local pollution.
Federal rules permit backup generators to operate for up to 50 hours annually during demand-response events, or up to 100 hours when emergencies and maintenance are included. Vantage Data Centers recently faced criticism over apparent coordination with Virginia regulators to challenge a report estimating tens of millions of dollars in annual health damages near a 96 MW Northern Virginia facility.
What businesses should prepare for
For companies building or buying data center capacity in PJM territory, power resilience is becoming a procurement requirement rather than a facilities detail. Contracts should define curtailment exposure, backup costs, notice periods and recovery priorities, while infrastructure plans should assess cleaner on-site generation and workload transfer between regions.
PJM data center curtailment: a practical planning checklist
The planned measure does not apply to every data center. It concerns facilities in PJM territory rated at 50 MW or more and allows temporary curtailment during periods when available electricity supply is insufficient.
Clarify the facility’s exposure
Before buying or expanding capacity in the PJM region, confirm how the site is classified and how a curtailment event would affect your contracted service. The relevant details should be documented rather than left as general resilience statements.
- Confirm whether the facility meets the 50 MW threshold.
- Identify which contracted services could be curtailed.
- Document expected notice periods and communication channels.
- Clarify compensation and any backup-power charges.
Review continuity and recovery arrangements
Backup generation is only one part of continuity planning. Buyers should also understand which workloads receive priority, how long alternative power can support them and how normal operations resume after an event.
- Define workload priorities before an interruption occurs.
- Check backup-power operating limits and dependencies.
- Agree on recovery order and responsibility for each step.
- Assess whether workloads can transfer to another region.
Compare capacity offers on operational terms
Headline capacity alone does not show how a facility will perform during grid stress. A useful comparison should include curtailment exposure, backup arrangements, notice procedures, recovery priorities and the costs assigned to each party.
- Compare resilience terms alongside available capacity.
- Request clear procedures for planned curtailment events.
- Separate backup costs from standard service charges.
- Record escalation contacts for operational decisions.
Frequently asked questions
Which PJM data centers may be affected?
According to the current policy description, the measure applies to facilities in PJM territory rated at 50 MW or more.
When is PJM expected to begin curtailment?
The planned start is June 2027. Curtailment would be temporary and used during periods of insufficient grid supply.
Does curtailment automatically mean a complete data center shutdown?
Not necessarily. The operational effect depends on the facility’s contract, backup systems, workload priorities and ability to transfer workloads elsewhere.
What should a capacity contract clarify?
It should define curtailment exposure, notice procedures, compensation, backup costs, recovery priorities and responsibilities during restoration.