PJM launches fast-track push to set rules for adding data centers to its system

The PJM Interconnection has launched a fast-track stakeholder process to develop rules for interconnecting data centers and other large loads to its system while ensuring the region has enough power supplies, according to a letter from the grid operator’s board released Monday.

The Critical Issue Fast Path initiative will aim to develop a proposal that could be filed for approval with the Federal Energy Regulatory Commission by the end of the year, according to the letter. That timing would allow the rules to be in effect for PJM’s 2028/2029 base capacity auction, which is set to be held in June.

The effort comes as PJM’s most recent long-term load forecast shows its peak load growing by 32 GW from 2024 to 2030 — with almost all the growth coming from data centers, the board said. PJM’s system peaked last year at about 153 GW.

At the same time, PJM already faces tight supply-demand conditions, which helped drive record-setting price spikes in the grid operator’s last two capacity auctions.

“This onrush of demand has created significant upward pricing pressure and has raised future resource adequacy concerns,” the board said. “To further complicate matters, while demand expansion is clearly evident in recent system behavior, there exists a large cone of uncertainty around the trajectory and amplitude of future growth.”

Also, power plant developers face major challenges in advancing their projects, such as siting and permitting hurdles and supply chain backlogs, the board said.

The PJM board said the fast-track effort will focus on four main issues: resource adequacy; reliability criteria; interconnection rules; and coordination.

On the issue of resource adequacy — the ability of the power system to meet its needs at all times — the board said it wants “reliability-focused solutions” that allow large loads to be integrated rapidly and reliably.

“These solutions may include adjustments to the load utilized and/or cleared through [capacity] auctions, if such load is not capacity backed,” the board said.

The board asked stakeholders to consider existing resource adequacy tools, such as demand response and options for large load customers to bring new power supplies to meet their electricity needs.

The board said any proposal must take into account proper coordination between PJM and the parties that enter into contracts and agreements with large load customers, as well as PJM states and affected customers.

PJM will present an initial proposal at a workshop on Aug. 18. Stakeholders will also be able to discuss the board’s proposed scope for the initiative at the meeting.

The initiative follows a workshop PJM held on May 9 to explore issues surrounding the development of large loads in the grid operator's footprint.

PJM operates the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and the District of Columbia. PJM serves northern Virginia, home to Data Center Alley, the largest data center hub in the world. The area has nearly 250 data centers and 130 that are under development, according to Data Center Map.