PJM Proposes Framework to Connect Data Centers

The PJM Interconnection on Aug. 13 filed its proposed framework to connect new data centers and other Large Load customers that bring their own power supplies consistent with the Ratepayer Protection Pledge from the Trump Administration.

PJM’s proposal, which was filed with the Federal Energy Regulatory Commission, also would establish a new Interim Resource Adequacy Service (IRAS) for those new Large Load customers who do not bring their own power supply.

When electricity supply on the grid approaches dangerously low levels, a new emergency procedure would notify utilities to reduce or transfer the electricity demand from new Large Load customers ahead of any action that would serve to shut off traditional consumers, including residential consumers.

IRAS would apply to new Large Loads that have not brought their own new capacity or had their capacity needs covered through the Reliability Backstop Procurement, a special process designed to fill forecasted capacity shortfalls starting in June 2027.

PJM would create and maintain a Large Load Registry to track all Large Loads, existing and new, to provide states, utilities and regulatory agencies with the information they need to apply the IRAS service to Large Load customers if they choose.

The IRAS framework encourages states and the Electrical Distributors that serve their residents to reevaluate and amend the established plans that utilities and other Load Serving Entities (LSEs) follow when directed by PJM to reduce electricity demand, or load.

The proposal is intentionally designed to avoid conflicts with state authority by leaving established and regulated retail load reduction plans and retail cost allocation to state-level entities, while IRAS provides PJM the necessary tools to address situations where regional power shortages would jeopardize reliability and threaten wider outages.

“The unprecedented addition of large loads, most notably data centers, has given rise to resource adequacy shortfalls – and associated real-time operational issues that IRAS is intended to address,” the filing states. Of 32 GW of growth in forecasted electricity demand between 2024 and 2030, 30 GW is attributed to data centers.

To support the IRAS framework, PJM would require utilities and other LSEs to bring new capacity in an amount that equals or exceeds the combined peak demand of the new Large Loads. Failing that, PJM would direct these zones during emergencies to reduce electricity demand in proportion to their area’s share of new Large Load not supported by new generation. This curtailment of service would come before calling on Load Management customers, who are paid in advance to reduce their electricity use when directed by PJM in emergencies. States could use the Large Load Registry to identify which customers would be subject to IRAS.

As laid out in PJM’s filing, this model is consistent with the Ratepayer Protection Pledge introduced in March 2026 and recently expanded in July 2026, which states that new Large Loads will “build, bring, or buy the new generation resources and electricity needed to satisfy their new energy demands, paying the full cost of those resources whether by building, or buying from, new or otherwise additive power plants” because it “advances self-sufficiency and protects Americans from higher prices.’”

A Large Load that is ordered to reduce its power usage could receive credit for helping maintain grid reliability. States and their local utilities would manage how these retail costs are shared among customers in affected areas. Large Loads could also waive that compensation consistent with the Ratepayer Protection Pledge to “protect the American people from increased utility bills as a result of the development of these data centers.”

The Large Load Registry, a database of information pertaining to Large Loads that will be established and maintained by PJM, will aid PJM in administering IRAS and other Large-Load initiatives to help balance supply and demand. PJM would make this information available to states, utilities and regulators, subject to confidentiality requirements.

Notably, PJM proposes that beginning with the 2029/2030 capacity auction, new Large Loads that do not bring their own new supply to the system will not be included when calculating the future power needs to be procured in those auctions.

PJM requested FERC accept the petition within 60 days.

PJM’s IRAS proposal is just one part of a multipronged, ongoing effort directed by the PJM Board of Managers to respond to the challenges stemming from the influx of Large Loads into the PJM region, which included a July 31 proposal to run the Reliability Backstop Procurement process in September and October. PJM also continues to make progress on a broader, holistic review of its capacity market long-term, sustainable solutions to concerns stemming from Large Load additions.

APPA, Members Sign White House Ratepayer Protection Pledge

American Public Power Association President & CEO Scott Corwin on July 23 participated in a White House event to reaffirm public power utilities’ commitment to ensuring customers are not burdened with costs caused by infrastructure investment to meet growing data center demand.

"We are pleased to be a signatory to the Ratepayer Protection Pledge on behalf of public power, which aligns with our position that other utility customers should not bear the brunt of the costs of serving data centers," said Corwin. "It reinforces our long-standing focus on energy affordability and reliability for public power utility customers."

Public power utilities are already acting to protect their customers. Many have adopted, or are developing, rates, terms, and conditions for new large-load customers.

APPA said it appreciates the Administration’s recognition of the importance of protecting electric customers from the costs of serving large data centers.

In early March, the White House hosted an event with seven major hyperscaler AI companies where they signed the Ratepayer Protection Pledge containing specific actions to help protect other electric ratepayers.

Public power utilities, state and regional associations and other public power groups that signed the pledge are: