What did PJM file?
PJM runs the electric grid for Washington, D.C. and 13 states across the mid Atlantic and Midwest, and it has sent federal regulators a plan to change how newly built AI data centers connect to the grid and get power. Bisnow The regulator is the Federal Energy Regulatory Commission, FERC, the federal agency PJM has asked to approve its new framework governing how AI data centers connect to the grid and acquire power. FERC’s notice lists the plan under case number ER26-3515-000 and shows PJM asking for it to take effect on October 12, 2026. Federal Register notice PJM filed it as a rate change under section 205(d) of the Federal Power Act, the federal law FERC works under, so FERC decides whether it takes effect.
Under the plan, a new customer that draws at least 50 megawatts at one location must have new electric supply arranged specifically for it. The part of its demand with no supply behind it would be the first thing cut when the grid runs short. A megawatt is a unit of electric power. PJM told FERC that AI data centers account for 30 gigawatts of the 32 gigawatts of demand growth it expects between 2024 and 2030, and a gigawatt is a thousand megawatts. PJM Inside Lines
Why PJM says it is short of supply
PJM runs a capacity auction, a market where PJM pays power plants and other resources to be available when they are needed. The auction PJM ran in July 2026, covering the year that begins in mid 2028, bought 138,318 megawatts of supply and still came up 6,831 megawatts short of what PJM says the system needs. It cleared at $325 per megawatt per day, the highest price FERC allows, and it was the second auction in a row to miss the target. Data Center Frontier Missing twice means the latest auction cleared at the maximum price and PJM still did not fill the order.
PJM’s 2026 long term forecast has summer peak demand rising an average of 3.6% a year for a decade, close to 66 gigawatts of growth. The forecast PJM published in 2021 had 0.3% a year. Data Center Frontier
What would change for a new 50 megawatt site?
PJM’s plan applies to what it calls a Large Load, meaning end use demand with a combined peak of at least 50 megawatts at one electrical site. Related facilities within one mile can be counted as a single site. Data Center Knowledge The obligation only reaches a site that starts service, or adds demand, after June 1, 2027.
The company that sells the site its electricity would have to designate new supply at least as large as the site’s peak demand, which is the most electricity it draws at any one moment. If that supply is not there, PJM would order that part of the region to cut demand during an emergency. The cut would be in proportion to the new large load with no new supply behind it. PJM would do that before calling on the customers it already pays in advance to cut their usage. PJM Inside Lines The supply can be a new power plant, an upgrade that gets more out of an existing plant, a rebuilt plant, or a plant converted to a different fuel. It can also be a battery or customers who agree to cut their own use. ET Datacenters An allocated share of Reliability Backstop Procurement capacity could count toward the requirement too.
From the 2029/2030 auction year, PJM would stop counting new large loads that have no supply of their own when it calculates how much power to buy. PJM Inside Lines Today that demand sits in the pool with everyone else’s and PJM buys against it.
How PJM would treat a new 50 megawatt site under the pending filing, compared with today.
| Dimension | Before | After |
|---|---|---|
| Capacity backing for a new large site | No load specific new capacity obligation described. PJM procured capacity against forecast demand including AI data centers. | LSE must designate qualifying new capacity at least equal to the load’s peak demand, or hold allocated backstop UCAP |
| Order of emergency load reduction | PJM called paid Pre-Emergency Load Management resources before firm customer reductions | Unbacked portion of new large load cut first, ahead of Pre-Emergency Load Management |
| Demand used to size the capacity auction | Forecast large load counted in the reliability requirement PJM procures against | From 2029/30 delivery year, excluded new large load subtracted from the reliability requirement in VRR curves |
| Who counts as a Large Load | Sources describe no prior PJM-wide Large Load classification or megawatt threshold | 50 MW cumulative peak at one electrical site, one-mile radius aggregation, in service after June 1, 2027 |
| Visibility of large loads | No PJM registry. PJM relied on utility reported forecasts and firm commitment vetting | Schedule 11 registry, location, peak, ramp schedule, telemetry, backup generation, LSE contracts, shared with states and regulators |
| Regulatory status | No pending PJM filing establishing IRAS or a Large Load Registry | Docket ER26-3515-000 is pending at FERC. Comments are due September 3. The requested effective date is October 12, 2026. |
Who orders the cut and who pays for it
PJM would send the cut order to the company that sells the site its electricity. PJM says the states keep control of the retail side, including how the reduction is measured and whether the customer is paid anything for it. ET Datacenters Measurement and compensation for load reduction can therefore vary from one state to the next, because PJM leaves those implementation details to state-regulated retail arrangements.
The Ratepayer Protection Pledge was introduced in March 2026 and expanded in July 2026. It says new large loads will build, bring or buy the new generation resources and electricity needed to satisfy their new energy demands, and pay the full cost of those resources. Under PJM’s filing, a large load ordered to reduce its power usage could receive credit for helping maintain grid reliability, or waive that compensation consistent with the pledge. ROI-NJ SemiAnalysis reports that every PJM state would have to pass its own rules before backstop costs could be charged to the new large customers, and that no state has done that yet. SemiAnalysis A large load that participates in PJM’s emergency auction is agreeing to a wholesale obligation whose retail cost-allocation policy no PJM state has yet passed.
Can FERC approve a plan PJM’s own members voted down?
PJM put 11 pieces of this framework to an advisory vote of its members in June 2026. None of them reached the two thirds support needed to pass, and PJM’s board directed the filing anyway. Data Center Knowledge The parties already in the case include PJM’s independent market monitor, the outside office that reviews PJM’s markets, the Maryland Public Service Commission, the Illinois Attorney General, the New Jersey Division of Rate Counsel, a coalition of large industrial customers and groups representing power plant owners.
The plan also builds a list of large customers held by PJM, carrying each site’s location, its peak demand, how fast it ramps up, the equipment that reports its usage, its backup generators and its supply contracts, and that information may be made available to state commissions and FERC. Data Center Knowledge What a site puts on that list can be checked against what the site actually does, and argued about later.
The plan sorts customers by size and by date. The Large Load classification is described by reference to a site’s peak demand. A building in service before June 1, 2027 keeps the treatment every other customer gets, while the same building energized after that date has demand that goes first in an emergency. Whether FERC finds a good enough reason for that difference is what this case is about. So far the public record shows a Federal Register notice published on August 19, 2026. It lists the PJM filing with a September 3, 2026 comment date and is signed by its secretary, Debbie-Anne A. Reese. Federal Register notice
The timeline
Comments on the plan are due at 5 p.m. Eastern time on September 3, 2026. Anyone who wants to argue in the case must also file to intervene by that same moment, which is FERC’s word for formally joining a case as a party rather than watching it. Federal Register notice That is the ordinary window FERC gives PJM paperwork. It is the same three weeks it gave a separate PJM rate filing made on August 12, 2026, which drew a comment date of September 2, 2026. FederalRegister.gov The September 2 date belongs to a separate PJM filing on the second quarter 2026 member lists, which carried a comment date of 5 p.m. ET on September 2, 2026.
A FERC combined notice of filings dated August 17, 2026 and set for publication on August 20 lists PJM filings received that day and makes no mention of the large load plan. Federal Register public inspection The backstop auction a site could lean on instead of building its own plant was filed at FERC on July 31, 2026. Bidding is scheduled from September 30 to October 21, and results are due by December 2. Electron Economics That auction would pay as much as $555 per megawatt per day and tie up commitments for as long as 15 years. The winning plants would have to be running by June 1, 2032.
The date to engineer around is June 1, 2027. It is unclear how the new Large Load class would apply to a site energized before it takes effect. A site that slips a few months past it sits inside. Every megawatt of its demand without a new plant designated behind it stands at the front of the line the next time PJM needs load off the system.
Tomorrow’s topic
The ERCOT audit of pending interconnection projects under Texas SB 6.