FERC rejects most of PJM plan for connecting data centers

what happened

The Federal Energy Regulatory Commission rejected most of a plan from PJM Interconnection, the largest U.S. power grid, for adding data centers and other large users, Seeking Alpha reported, citing UtilityDive.com. FERC did not approve proposed interim service rules or the “bring your own new capacity” mechanism.

According to UtilityDive.com, the commission said central elements of PJM’s Interim Resource Adequacy Service framework could intrude on state authority over retail rates and appear discriminatory toward large loads. The framework would let those users connect without matching new capacity if they agreed to curtailment ahead of grid emergencies.

PJM may submit a revised proposal, but FERC said it must address several issues, including why data centers should be temporarily disconnected before other major electricity users. PJM forecasts that data-center power demand across its Midwest and Mid-Atlantic territory will triple by 2030, reaching about 29 GW of capacity.

why it matters

Jefferies analysts said the decision could keep PJM capacity prices higher for longer, benefiting independent power producers including Constellation Energy, NRG Energy, Talen Energy and Vistra. They called the development positive for existing generators and IPPs, while noting continued uncertainty around PJM market rules.

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