Regulators pause data center power plan over who pays the bill
Federal regulators have put on hold a plan by PJM, which runs the power grid for about 67 million people in 13 states and Washington, D.C., to buy emergency power for a shortfall driven largely by data centers. The fight is over who pays: data centers or households. The plan cannot take effect before Feb. 28, 2027.
A plan to buy emergency power for the data center boom is on pause while regulators sort out who gets the bill. The Federal Energy Regulatory Commission accepted most of PJM Interconnection's one-time "backstop" plan on Sept. 29. But it suspended the plan until Feb. 28, 2027, and questioned how PJM would split the costs, the Daily Caller News Foundation reported Monday.
PJM runs the grid for about 67 million people across 13 Mid-Atlantic and Midwest states and Washington, D.C. It had planned to take offers from Sept. 30 to Oct. 21 for about 6.8 gigawatts of new supply. That is meant to cover a shortfall driven largely by data center growth. Neither of PJM's last two regular capacity auctions bought enough power to meet its reserve targets, Utility Dive reported.
FERC said three parts of the plan may not be "just and reasonable": how costs are divided, rules for utilities that leave PJM, and the money some buyers must post as security. It offered another way to assign costs, based on updated forecasts of where demand is growing. It also struck a provision that would have let some co-ops and city-owned utilities opt out.
FERC Chairman Laura Swett did not mince words. The commission "will not be forced into accepting a deeply flawed, eleventh-hour procurement mechanism with billion-dollar implications for consumers," she wrote.
PJM says FERC approved 11 of the plan's 15 key parts and gave it a "clear path" to fix the rest. It still plans its regular capacity auction in December.
Consumer advocates are watching the bill. Maryland's People's Counsel, David Lapp, said a five-month delay "won't be a major setback to a 15-year procurement." His office had estimated the plan could add up to $562 million for customers of two Maryland utilities. Joseph Bowring, PJM's independent market monitor, said the delay does not create a reliability risk. Asked if FERC's cost rules do enough to keep data center costs off household bills, he said, "No."
PJM is set to give a brief update at a stakeholder committee meeting on Wednesday, Oct. 7, the American Public Power Association reported.
What we know: The backstop power buy is delayed at least until late February 2027.
What we don't: How the final cost split will land on household bills.
Where outlets agree The Daily Caller News Foundation, Utility Dive and the American Public Power Association all report that FERC accepted PJM's backstop plan on Sept. 29 but delayed it, and that PJM did not start taking offers on Sept. 30.
Where they differ PJM says FERC gave it a clear path forward, but PJM's own market monitor says FERC's cost rules still do not do enough to keep data center costs off household bills.