PJM, the nation’s largest grid operator, has filed a new two-part proposal with the Federal Energy Regulatory Commission (FERC) to help offset the soaring electrical demand from data centers.
According to filings, PJM will provide up to $20 billion for new power plants to help supply data centers built through 2027. The grid manager is expected to seek proposals for new power plants in the region on Sept. 30. The funds will be awarded in December.
The second part of the plan will encourage data centers built after 2027 to bring their own energy supply or PJM may limit service to ones that do not.
This is only for data centers that are not built with a plan in place to supply their own energy. Other customers will have priority and the grid will shut off some data centers when there’s insufficient power. Those rules are expected to take effect in mid-2027.
PJM Interconnection manages the transmission and wholesale electricity market for about 67 million people in 13 states, including West Virginia, and Washington D.C. In the last several years, electricity prices have surged as PJM has not been able to deliver new supply fast enough to keep pace with the data center boom.
If FERC accepts the proposal, PJM has requested that the commission issue an order on this filing and make it effective by no later than Oct. 12, 2026.
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