A new data center in the PJM region will not, for now, get onto the grid sooner by agreeing to be switched off first. On 9 October the Federal Energy Regulatory Commission rejected the core of PJM Interconnection's plan for connecting data centers and other large loads, Utility Dive reported on 12 October. FERC accepted two pieces of the filing: PJM's definition of a large load and a registry of such loads. The rest, including the Interim Resource Adequacy Service and the rules for bringing your own new capacity, was turned down.
What PJM Asked For
The Interim Resource Adequacy Service, IRAS for short, was the centre of the proposal. A large load could have connected without new generating capacity to match it, provided it accepted being curtailed before a grid emergency. The companion rules covered loads that bring their own new capacity. What survives is narrower: large loads are defined as facilities of 50 MW or more, and PJM will keep a registry recording each one's location, ramp schedule and capacity supply.
FERC's objection was about who decides. Several provisions, it found, put obligations directly on new large loads, which are mostly retail customers; they dictated which retail customers would be curtailed; and the compensation framework amounted to setting a retail rate. That intrudes on state jurisdiction over retail rates and appears to discriminate against large loads, the commission said, and it encouraged the states to keep working on who has to be curtailed.
Commissioner David Rosner wrote a concurrence. He warned that leaving IRAS loads out of the capacity auction's demand curve could distort the market, with PJM showing surplus capacity while thousands of megawatts are shed involuntarily. Non-critical data centers should go before homes, hospitals and schools, in his view, but the order of priority belongs to the states, and curtailment should come only once voluntary demand response has been used up.
A Week of Tight Margins
The ruling came about five weeks after FERC rejected key parts of PJM's backstop procurement proposal. Four days later the Department of Energy's order 202-26-50 took effect, running from 13 to 16 October; Microgrid Knowledge notes that it let PJM call on backup generation at large sites, as a last resort before the most severe emergency alert level (we covered the order here). The same report puts PJM's expected new large-load requests at about 70 GW by 2038, against 15 GW of generation lost since 2022 and a 6.8 GW shortfall on the reliability requirement for 2028/2029.
PJM says it is reviewing the order and how to meet FERC's requirements while respecting the states' role. Jefferies analysts expect higher capacity prices for longer, and think a lightly revised proposal may return, probably led by the states, with Ohio and Pennsylvania the ones to watch.
Curtailment Still Has to Land Somewhere
For anyone specifying standby plant in PJM, the order changes the address, not the question. A data center that is curtailed keeps running on its own generator sets or it stops, and nobody building for AI load plans on stopping. Whether the rule comes from a federal tariff or a state commission, it ends in the same place: more hours on sets bought for emergencies, and an air permit that has to allow them.
The registry is the part that is certain. Location, ramp schedule and capacity supply will be on file with PJM, and state curtailment rules, when they come, will be written against that list. The run-hour limits in a site's permit and its fuel arrangements are better reviewed now, while the states are still drafting.
Sources: Utility Dive, Microgrid Knowledge