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.