PJM to Cut Power to Large Data Centers Starting 2027
Original: Data centers may face temporary power cuts to prevent blackouts on largest US grid
Why This Matters
Data center power curtailment on the largest US grid signals a structural constraint on AI infrastructure expansion.
PJM Interconnection, the largest U.S. electrical grid operator, announced it will implement temporary power cuts to data centers of 50 MW or larger starting June 2027 to prevent blackouts, as data center electricity demand is projected to quadruple by 2035.
PJM Interconnection, which serves 67 million customers across a territory stretching from Virginia to Illinois, announced plans to curtail power to data centers and other large users during periods of power shortage. The policy takes effect in June 2027 and applies only to facilities consuming 50 megawatts or more. The decision follows a capacity auction that fell short of targets, leaving the grid unable to keep pace with surging demand from data center construction. By 2035, data centers are expected to consume four times the electricity they use today. Affected customers will be compensated under a demand response framework similar to programs long used for large industrial users such as manufacturers. Advance notice will range from 30 minutes to a few days depending on forecasted conditions. PJM is running a second auction for new generating capacity. Analysts expect the policy to push data center operators toward on-site power generation. Many are likely to fall back on diesel backup generators, which federal regulations allow for up to 50 hours per year for demand response and up to 100 hours for emergencies and maintenance. Wholesale electricity prices on the PJM grid have nearly doubled over the past year, with the grid's independent market monitor attributing much of the increase to data center growth. Separately, Vantage Data Centers faced criticism this week over its alleged coordination with Virginia environmental regulators to dispute findings that diesel generators at a 96 MW Northern Virginia facility could cause tens of millions of dollars in annual health damages to nearby residents.