The largest electrical grid in the U.S. is preparing a new response to rising power demand from data centers: temporary shutoffs during shortages. PJM Interconnection, the grid operator, has said it will curtail electricity to data centers and other large users after an auction to add more generating capacity fell short.
The change reflects a widening pressure point for the power system. Data center construction is moving quickly, and the source article says data centers are expected to use four times more electricity as they do today by 2035.
What PJM Plans To Do
PJM will not begin curtailing supply until June 2027. The policy will apply only to data centers that are 50 megawatts or larger, along with other large users that fall under the same kind of grid-management approach.
The cuts are designed for moments when power shortages threaten the wider grid. In plain terms, PJM is creating a way to reduce demand from very large customers when available electricity is not enough to meet the system's needs.
The grid operator is also running another auction for new generating capacity. That matters because curtailment is not a replacement for more supply. It is a tool for managing shortages when the system is under stress.
Why Data Centers Are In The Spotlight
Data centers have become a major concern for grid operators because they can require very large, steady amounts of electricity. The source article describes an onslaught of data centers on PJM's system, with the pace of construction forcing operators to look for ways to generate enough power.
PJM's territory runs from Virginia to Illinois and covers 67 million customers. That footprint makes decisions on large electricity users especially consequential, because pressure in one part of the grid can become a broader reliability and cost issue.
The financial strain is already visible in wholesale electricity markets. Over the last year, wholesale electricity prices have nearly doubled, and PJM's independent market monitor blamed data centers for much of the increase.
That does not mean data centers are the only factor in grid planning. But within the facts provided, they are a central reason PJM is facing scrutiny over new generating capacity and the handling of large new users.
How Curtailment Usually Works
The approach is similar to demand response programs, which have existed for decades. These programs often include large power users such as manufacturers, and they are built around reducing demand when the grid needs relief.
Customers whose power is cut will be compensated. The source article notes that such programs typically provide advance notice, with timing ranging from 30 minutes to a few days depending on forecasted demand.
For data centers, the practical issue is continuity. A facility that expects uninterrupted operation may need a plan for what happens when grid power is curtailed, even if the curtailment is temporary and compensated.
Backup Power Could Become More Important
The move will likely push many new data centers, and potentially existing ones, to establish their own on-site power sources. Facilities that do not add their own supply will probably lean more heavily on backup generators.
That path brings tradeoffs. Backup generators tend to be costlier to run and frequently more polluting. Many data centers favor diesel generators because the fuel is widely available and can be stored on-site.
Federal regulations allow such generators to be used for up to 50 hours per year for demand response events. The limit rises to up to 100 hours per year if events like emergencies and maintenance are included.
Those rules create a narrow operating window for diesel backup power in this context. They also show why decisions about curtailment are not only about electricity reliability, but also about local environmental and health concerns.
The Virginia Dispute Shows The Stakes
This week, Vantage Data Centers came under fire for its apparent coordination with Virginia environmental regulators. The issue centered on efforts to cast doubt on a report about diesel backup generators near a 96 megawatt data center in Northern Virginia.
According to the source article, that report said the generators could contribute to tens of millions of dollars in annual health damages for people living nearby. The dispute highlights a broader tension: when grid power is constrained, backup systems may become more visible to communities around large facilities.
PJM's decision is therefore more than a technical adjustment. It ties together data center growth, generating capacity, wholesale electricity prices, demand response, diesel backup power, and the question of who carries the burden when the grid is short on supply.
The first curtailments are not set to begin until June 2027. Between now and then, the next capacity auction and the choices made by data center operators will shape how much of the response comes from new generation, on-site power, or temporary reductions in demand.