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PJM warns it may cut data centers in extreme power crunch
PJM said residential bills could rise by about $70 per month by early 2028 if it needs to charge customers for reliability backstop power procurement.
PJM Interconnection, the operator of the nation’s largest electricity grid, warned it could temporarily cut power to data centers during an unmanageable demand event if they lack an independent source of electricity, according to a letter shared with stakeholders on Monday and reported by Bloomberg.
The plan is designed to prevent blackouts and protect residential customers from rate spikes, with PJM saying it could be implemented as soon as mid-2027 across its 13-state footprint, from Ohio to Virginia and Washington, D.C. Data center operators would be notified in advance if the emergency measure is triggered and may be eligible for compensation for expenses and inconvenience.
PJM also described grid constraints tied to rapidly growing demand from data centers and tighter supply. The operator is preparing for an emergency auction scheduled for September to procure power, as it faces a nearly 7-gigawatt shortage in the year after June 2028.
PJM reported that its power supply costs have risen by more than 60% amid data center load growth, and it said it may need to raise $30B from customers to keep the system reliable. The letter projects residential bills could increase by about $70 per month by early 2028, and it noted heightened scrutiny from lawmakers and consumer advocates as data centers have become a political flashpoint.