PJM Board Announces Final Proposal to Address Data Center Demand
PJM fails to adequately address bill hikes and reliability risks posed by data centers.
VALLEY FORGE, PA – Today the PJM board announced a suite of reforms that came out of its Critical Issue Fast Path process to address data center load on the electrical grid. Among these reforms, the PJM board agreed that during emergencies, data centers that have not brought their own new power supply should be turned off first, not the public. This reform came directly from the Protecting Ratepayers Proposal put forth by Senator Katie Fry Hester, more than 100 state legislators, and NRDC (Natural Resources Defense Council).
The following is a reaction from Claire Lang-Ree, advocate for the Sustainable FERC Project at NRDC (Natural Resources Defense Council):
“In their plan, PJM recognized that data center-caused reliability risk is unacceptable and agreed to protect everyday families from blackouts if there’s not enough power to go around. This will triage the reliability crisis that PJM is hurtling toward, but it won’t reduce energy bills and solve deeper bottlenecks that are blocking new supply from coming online.
“However, PJM also proposed a fast-track process that effectively excludes clean energy projects and gives special treatment to fossil fuel power plants built for data centers, allowing them to cut ahead of low-cost clean resources that have been waiting years to connect to the grid.
“PJM and state leaders need to implement solutions that will actually stop skyrocketing energy bills and protect the public from the risk of blackouts driven by data centers. Critically, PJM must require large loads to pay for their own new power supply or risk getting turned off. PJM also needs to speed up connection of all new energy, not just those serving data centers. States must play a role by ensuring that PJM’s actions don’t come at the cost of their climate and clean energy goals. And data center developers should adhere to their own climate commitments by prioritizing fast-to-construct, reliable, clean resources like battery storage. The 67 million Americans in the PJM region cannot afford to wait.”
Background:
PJM Interconnection, the nation’s largest power grid operator, oversees electricity markets for 67 million people across 13 states and the District of Columbia. Recently, PJM’s auction failed to procure enough electrical supply to meet expected electricity demand in 2027 due to data centers. PJM forecasts that data centers will drive a need for more than 30 gigawatts of peak electricity capacity by 2030—enough to power more than 20 million households, or approximately all the homes in New Jersey, Pennsylvania, Ohio, Virginia, and Maryland. The cost of electricity is expected to skyrocket by over $100 billion through 2033 due to data center load growth, which could cost families and businesses in PJM territory an extra $70 per month.
NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law, and people power to confront the climate crisis, protect public health, and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, Beijing and Delhi (an office of NRDC India Pvt. Ltd). Visit us at www.nrdc.org and follow us on Twitter @NRDC.