These rules will safeguard grid reliability and protect consumers in the mid-Atlantic territory, which serves over 67 million Americans in 13 states and D.C.
As technology leaps forward, clear and fair regulations must keep pace to support advancement, help prevent price volatility, and promote competition, ultimately benefiting consumers by keeping electricity costs manageable, FERC said.
“Today’s order is a monumental step towards fortifying America’s national and economic security in the AI revolution, while ensuring we preserve just and reasonable rates for all Americans. I look forward to tackling more of these critical national issues with my colleagues in the New Year,” said Chairman Laura Swett.
Locking Up Power Plants
Thursday’s order grew out of a dispute between power plant owners and electric utilities over a proposed colocation deal between Amazon’s cloud-computing subsidiary and the owner of the Talen Susquehanna nuclear power plant in Pennsylvania, according to the Associated Press.
Utilities argued colocation allows big power users to avoid paying them to maintain the grid.
Some consumer advocates maintained that diverting energy from existing power plants to data centers could drive up energy prices without an answer for how rising power demand will be met for regular ratepayers.
In addition to the Talen Susquehanna nuclear power plant, energy companies have been buying or locking up existing power plants to serve A.I. data centers, including--
-- NRG bought five PA gas power plants with 2.4 Gigawatt capacity to help power data centers. Read more here.
-- Vistra Corp bought two PA gas power plants with 1.4 GigaWatt capacity to help power data centers. Read more here.
-- Capital Power announced $3 billion over 10 years to upgrade and expand a gas facility in Shamokin Dam, PA. Read more here.
-- The Tenaska Natural Gas Power Plant in Westmoreland County is also positioned to supply energy to data centers. Read more here.
-- Bitfarms Ltd is buying Stronghold Digital Mining and Scrubgrass and Panther Creek coal waste power plants to help power data centers. Read more here.
-- Google announced a 20-year agreement to repower the Safe Harbor and Holtwood hydroelectric facilities on the Susquehanna River to feed data centers. Read more here.
We Need Every Electron
There is no doubt the soaring demand for energy from A.I. data centers is already bringing Pennsylvania’s electric grid perilously close to being unreliable, as the results of the PJM capacity auction this week show.
Tom Rutigliano, Natural Resources Defense Council, said "Summer 2027 will be the first time in PJM’s history it expects to not have enough power to reliably meet demand because of new data center forecasts and the ongoing risk of fossil fuel [natural gas] generators failing during winter storms. Read more here.
"This auction leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply, and the solution will require concerted action involving PJM, its stakeholders, state and federal partners, and the data center industry itself,” said Stu Bresler, PJM Executive Vice President – Market Services and Strategy, who becomes chief operating officer on Jan. 7. Read more here.
PUC Commissioner Kathryn Zerfuss said-- “So we all know that we have many challenges as it relates to energy supply and demand, and the gap between supply and demand is just growing more and more every day.
“We totally maintain that we have to take advantage of every single molecule and electron we can from all energy sources, whether it's solar, wind, for our electric grid.” Read more here.
The Order
In the order, the Commission finds PJM’s tariff unjust and unreasonable due to a lack of clarity and consistency in the rates, terms, and conditions that apply to interconnection customers serving co-located load and eligible customers taking transmission service on behalf of co-located loads.
PJM’s tariff is unreasonable because it does not account for transmission services where eligible customers can manage energy withdrawals for co-located load.
FERC directs PJM to revise its tariff to require its eligible (transmission) customers serving co-located load to choose from several transmission service options.
“Clarifying new rules will help release the bottleneck of large load investments across the PJM footprint,” said Chairman Swett.
FERC also directs PJM to report, by January 19, 2026, on the status of its proposals to speed up the addition of generating capacity, including--
-- Expedited interconnection process for shovel-ready projects,
-- Changes to PJM’s reliability backstop mechanism for resource shortfalls, and
-- Enhanced load forecasting and demand flexibility measures to identify new capacity needed for system reliability.
Click Here for a fact sheet on the decision.
Click Here for the FERC announcement.
NewsClip:
-- AP: FERC Orders PJM To Allow A.I. Data Centers To Plug Right Into Power Plants In Scramble For Energy
Related Articles This Week:
-- PJM Electricity Auction Prices Again At Cap Imposed By Gov. Shapiro’s Lawsuit Settlement, Without It Prices Would Be 59% Higher Driven By A.I. Data Center Demand; Grid Reliability Now Questioned [PaEN]
-- Federal Energy Regulatory Commission Orders PJM To Allow A.I. Data Centers To Connect Directly To Power Plants, Expedite Connections For Shovel-Ready Projects, Enhance Load Forecasting [PaEN]
-- PUC Votes To Develop Rulemaking To Modernize Electric Interconnection Regulations; Proposed Rule Due In March [PaEN]
-- Environmental Groups, Our Children’s Trust Appeal Air Quality Permit For Homer City A.I. Data Center 4.5 GW Natural Gas Power Plant In Indiana County [PaEN]
-- Pennsylvania BRIGHT Expands Statewide To Remove Barriers To Bringing Affordable Solar Energy To PA Homeowners Left Out Of Transition To Clean Energy Options [PaEN]
-- Philadelphia Solar Energy Association: New Solar Schools Toolkit, Solar Toolkit For Nonprofits, Local Governments Available To Help Deal With Soaring Electricity Costs [PaEN]
-- PUC Approves $50,000 Penalty Settlement With Peoples Natural Gas Following 2022 Johnstown Pipeline Damage, Fire Incident
-- PUC Approves Settlement With Kaib & Kaib LLC Over Alleged Overbilling Of Natural Gas Customers In Jefferson County; $4,066.16 In Refunds Due, $500 Penalty
-- PUC Chairman Steve DeFrank Recognizes Staff And 2025 Accomplishments
NewsClips:
-- AP: FERC Orders PJM To Allow A.I. Data Centers To Plug Right Into Power Plants In Scramble For Energy
-- Utility Dive: PJM Capacity Prices Hit Record High As Grid Operator Falls Short Of Reliability Target; 6.6 GW Shortfall Could Trigger Reliability Backstop Auction
-- Bloomberg: Pressure Mounts To Fix PJM Grid As Electricity Costs Hit New Highs
-- Reuters: Prices In PJM Power Auction Hit New Record, Signaling Higher Utility Bills Ahead
-- Bloomberg: Latest PJM Power Auction Set To Deepen Affordability Concerns
-- KSDK: A.I. Data Centers Are Sucking Illinois’ Power Grid Dry, Official Report Warns [PJM Service Area]
-- Utility Dive: Electric Utility Large Load Tariffs Could Streamline Interconnection By Shrinking Queues, Report [Now, Anyone With An Acre Of Land For A Data Center Is Putting In An Interconnection Request]
-- PJM Outlines Long-Term Electric Transmission Plan In FERC Filing
-- KDKA: PA Lawmakers Exploring How To Regulate A.I. Data Centers, Which Drive Up Resident’s Utility Bills
-- TribLive: Westmoreland County Housing Authority Plans To Lease Former State Prison Site, Warehouse Rooftop For Solar Energy Facilities [‘There’s Only One Direction (Electric Prices) Are Going - That’s Up’]
-- Tribune-Democrat Guest Essay: Pennsylvania Must Be Prepared To Meet Energy Challenges After RGGI - By Tom Gilbert, PA Environmental Council [PDF of Article]
-- TribLive Guest Essay: New Energy Sources Needed Now To Combat Soaring Electricity Prices - By Kate Harper & Conor Lamb, Energy Future PA
-- Morning Call/Inquirer: Poll: How Pennsylvanians Feel About A.I. Data Centers: 70% Concerned About Water Use; 71% Concerned About Electricity Use
-- Post-Gazette: Survey Says Pennsylvanians See The A.I. Revolution As A ‘Significant Threat To Humanity’
-- Post-Gazette - Laura Legere: US Energy Secretary Touts $1 Billion Taxpayer Loan To Restart Undamaged Three Mile Island Nuclear Reactor To Feed Microsoft A.I. Data Centers
-- Altoona Mirror: Groups Urge Shapiro To Dial Back Support For A.I. Data Centers [PDF of Article]
-- Bloomberg: New York Utility Says Queue For A.I. Data Center Power Users Has Tripled
-- Pottstown Mercury: Sen. Pennycuick, Rep. Ciresi Say State Efforts Will Continue To Regulate A.I. Despite President’s Executive Order
-- Post-Gazette: President’s Order To Block State Regulation Of A.I. An ‘Abuse Of Power,’ State Democratic Sen. Costa Says
-- PA Capital-Star: PA’s Republican Attorney General, Lawmakers Contend With President’s Order Blocking A.I. Regulations
-- Chesapeake Bay Journal: Maryland Legislature Overrides Governor’s Veto Of Bills To Study Costs Of Greenhouse Gas Emissions In MD; Economic, Energy, Environmental Impacts Of A.I. Data Centers, Setting Up State Energy Office
[Posted: December 19, 2025] PA Environment Digest
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