PJM Membership Votes on New Policies to Handle Data Center Load
PJM board to finalize Reliability Backstop Procurement and Connect & Manage in the coming weeks
VALLEY FORGE, PA – PJM membership has voted on two consequential proposals related to managing the explosion in electricity demand from data centers: the Reliability Backstop Procurement (RBP) and Connect and Manage (CAM). The RBP governs contracting with new power plants while CAM dictates how PJM will handle situations where there is more demand for power than available supply.
On the RBP, members recommended a proposal made by multiple utilities that focused on voluntary purchases carried the day. No CAM proposal won the required 2/3rds support as PJM members preferred proposals that would cut off power to data centers when needed to protect other customers.
These votes act as recommendations to the PJM Board who are expected to vote in the coming weeks.
The following is a reaction from Tom Rutigliano, senior advocate, Climate & Energy at NRDC (Natural Resources Defense Council):
“PJM members supported a common sense approach to protect the public while contracting with new power plants. The approved proposal for the Reliability Backstop Procurement ensures that the public will not be stuck with the bill to build new power plants for data centers. It also directs PJM to focus on new supply located close to data centers, rather than building unnecessary transmission to move power from distant fossil fuel resources. This is good news for clean energy, and avoids an expensive boondoggle that benefits fossil fuel companies at public expense.
“It’s disappointing that PJM members were not able to agree on a Connect and Manage proposal, but there was widespread agreement that PJM needs to take an active role in preventing data centers from harming reliability for everyone else. Members soundly rejected proposals that would have had PJM do nothing as data centers overload the grid.
“The PJM Board must hear that message and decide on a proposal that both protects the public and respects states’ authority to manage data center growth. The Board should also focus on eliminating any unnecessary barriers to new technologies like distributed storage or upgrades to existing power plants. Most importantly, they must listen to state legislators and consumer advocates who believe that data centers should be removed from PJM’s capacity markets. That one simple move would save consumers nearly $10 billion every year.”
Background:
PJM Interconnection is the regional transmission organization (RTO) that manages the transmission and wholesale electricity market for thirteen states and Washington D.C. PJM serves about 65 million people in Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia. Learn more about the Reliability Backstop Procurement here.
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, Beijing and Delhi (an office of NRDC India Pvt. Ltd).