Federal energy regulators have ordered PJM Interconnection to revise a proposed emergency capacity-procurement program as rapidly expanding data-center electricity demand creates new reliability and cost pressures across the largest U.S. power market.
The Federal Energy Regulatory Commission accepted central elements of PJM’s proposal but suspended the backstop program for five months while regulators examine how its costs should be allocated and other provisions.
The proposal is designed to address an approximately 6,800-megawatt capacity shortfall identified for the 2028-2029 delivery year.
PJM operates the power grid across all or parts of 13 states and the District of Columbia.
Its territory includes several of America’s largest data-center markets, making the region an important test of whether existing electricity infrastructure can keep pace with the rapid growth of artificial-intelligence computing.
FERC’s intervention centers partly on who should pay for additional generating capacity required by that demand.
The regulator indicated that large electricity users creating substantial new demand, including data centers, should appropriately bear associated costs rather than shifting them broadly onto existing households and businesses.
FERC also instructed PJM to use updated load forecasts as it assesses future electricity requirements.
The issue is becoming increasingly consequential as hyperscalers and AI companies commit tens of billions of dollars to new data centers.
Those facilities can require electricity on the scale of industrial complexes, while building new generation and transmission infrastructure can take years.
PJM’s capacity problem therefore illustrates a broader constraint on the AI investment boom: computing hardware can be deployed faster than the power infrastructure required to operate it.
PJM has said it remains focused on maintaining reliability while allocating costs fairly.
The next issue for the market is how the revised procurement mechanism divides those costs among data centers, utilities and existing customers—and whether additional generating capacity can be brought online quickly enough to meet projected demand.
