In the near future PJM will file proposals with the Federal Energy Regulatory Commission to take these and other steps--
-- Hold a one-time backstop generation capacity auction in September to fill a 6.8 GW shortfall in generation need to ensure grid reliability;
-- Establish a Large Load Registry to track the location and loads of sites so they can be better managed during capacity shortages. New large loads that do not bring their own generation by June 1, 2027 and that have not secured their own power will be subject to curtailment proper to deployment of pre-emergency load management procedures.
More Demand, Fewer Resources
PJM said, new Large Loads are forecasted to increase by an estimated 70 GW by 2038, while some 15 GW of electricity generating resources have retired since 2022.
Meanwhile, the most recent capacity auction for the 2028/2029 Delivery Year resulted in a 6,831 GW shortfall below the system’s Reliability Requirement.
The Reliability Requirement is a measure of capacity that can reliably serve grid needs during extreme conditions under the standard of one loss of load event every 10 years.
“The Board is also acutely aware of the affordability pressures facing consumers,” the letter added. “The present trajectory of rapid load growth, tightening supply and rising capacity costs is not sustainable. The region needs substantial new investment in supply, and the central affordability question is how the costs of that investment should be allocated.”
Facilitated Matchmaking
To avoid over-procurement, the ultimate quantity of generating resources secured through bilateral contracts and self-supply arrangements will reduce the target of the Reliability Backstop Procurement.
PJM expects initial matches in August between buyers and sellers interested in bilateral contracting.
Launched June 9 with a Request for Proposals, this process is expected to continue until early next year.
Running the bilateral matching process in parallel with the procurement process gives market participants another path to bring new supply online while reducing the amount PJM ultimately needs to procure.
Backstop Procurement
PJM proposes to conduct a one-time Reliability Backstop Procurement from Sept. 30 through Oct. 21, with results released in early December.
Commitments of up to 15 years will be finalized prior to the December capacity auction for the 2029/2030 Delivery Year.
PJM said resources eligible to participate in the auction would have to be new power resources or those that did not receive a commitment for the 2028-29 delivery year.
The definition of “new power resources” is included in the PJM announcement.
To maintain affordability while incentivizing new resources, PJM proposed to cap the total cost of accepted supply offers at $555/MW-day.
[A cap of $325/MW-day applied to the last auction earlier in July. Without this cap, PJM said prices would have surged to $554.72/MW-day in most areas, including Pennsylvania. Read more here.]
PJM also said it will exclude new large loads from demand forecasts for general capacity auctions starting with 2029-30 so existing consumers will not bear the higher capacity costs caused by new large loads that do not bring, or otherwise contract for, the new supply necessary to serve them.
Large Load Registry
PJM will develop and maintain a Large Load Registry to improve load forecast accuracy and transparency; this has been supported by a broad cross-section of PJM stakeholders.
Large Loads are defined as end-use customer load that has a cumulative peak load quantity of at least 50 MW at a single site behind one or more delivery points/points of interconnection within a one-mile radius.
During capacity shortages, new Large Loads that do not bring their own generation by June 1, 2027, and have not otherwise secured supply, will be subject to curtailment prior to deployment of Pre-Emergency Load Management.
Compensation to customers directed to reduce load during grid stress will be subject to a FERC-approved compensation rate and jurisdiction of state authorities.
The proposed cost allocation framework aligns with the Ratepayer Protection principles endorsed by data centers, the White House and PJM governors, and respects state authorities, the Board noted.
“The federal government, PJM states and Large Load customers have emphasized that new Large Loads should bear the costs they cause,” the Board letter stated. “Because PJM does not have jurisdiction to allocate retail costs directly to individual data centers, state action will be essential. PJM will support those efforts by providing information from the new Large Load Registry and other data available through its settlement and billing processes.”
Click Here for the PJM announcement.
The PJM Interconnection coordinates the wholesale electricity grid and markets for all or parts of 13 states—Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia—plus the District of Columbia.
Reactions
Tom Rutigliano, senior advocate, Climate & Energy at Natural Resources Defense Council issued this statement--
“PJM made the right decision to prevent future data centers from endlessly raising prices. Requiring future data centers to bring their own power might be the single best thing they could have done to stabilize the grid.
“But prices won’t drop until data centers built before 2027 pull their weight.
“Now PJM needs to finish the job by supporting state efforts to manage demand from existing data centers, enabling rapid deployment of energy storage, and accelerating the connection of new energy projects to the grid.
“PJM also proposes to spend up to $20 billion for a new ‘Reliability Backstop Procurement.’
“This one-time auction will offer lucrative deals to new power plants, but is biased against the clean storage the region needs.
“Adding storage to existing power plants is one of the fastest ways to add new capacity to the system, but PJM inexplicably won’t consider that type of project.
“PJM also ignores the savings from building new storage near data centers instead of fossil plants hundreds of miles away, risking overspending on fossil fuels when there are cheaper, cleaner alternatives.”
Related Articles This Week - Data Centers:
-- The Center Square: Pennsylvania Farm Bureau Endorses Statewide Moratorium On A.I. Data Center Development Amid Eminent Domain, Farmland Preservation Worries [PaEN]
-- Independent Fiscal Office Reports Average Cost Of Electricity In PA Jumped 14.6% Over Past Year, Total Average PA Electricity Bill Has Increased 20.6% Since 2024 [PaEN]
-- FYI: -- A.I. Data Center Legislative Scorecard: Pennsylvania Failed To Finalize Meaningful Legislation On Energy Affordability, To Increase Electric Generation And Give Communities The Tools They Need To Cope With A.I. Proposals [PaEN]
-- PJM Interconnection Proposes One-Time Backstop General Capacity Auction In September With A $555/MW-Day Cap On Prices - Nearly 71% Higher Than Current $325 Cap [PaEN]
-- DEP Invites Comments On Water Quality Permit For Fill, Utility Lines Related To Aligned Data Centers Project, Shippingport Boro & Raccoon Twp., Beaver County [PaEN]
-- North Pocono CARE, Pocono Heritage Land Trust Host Aug. 1 Hike At Barton Brothers Property That Abuts Proposed A.I. Data Center Site In Lackawanna County [PaEN]
-- In Case You Missed It: A.I./Data Center Articles - NewClips From Last Week - August 3 [PaEN]
NewsClips - Data Centers:
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-- Erie Times/USAToday: Pennsylvania Electric Bills Rise 20% In 2 Years [Driven By Surge In Power Demands From Data Centers]
-- Warren Times Editorial: Rising Electricity Rates Keep Shocking Customers
-- PA Capital-Star: Leftover Low-Income Energy Assistance Funds Used To Give PA Enrollees $100 Supplemental Benefit In Face Of Spiking, Data Center-Driven Energy Costs
-- Spotlight PA: PJM, Power Grid Can’t Handle A.I. Boom Demands As Summer Heat Triggers Emergency Orders
-- TribLive: Data Center Dash: A.I. Data Center Industry Expands Hopes In Western PA, But Its Future Remains Uncertain
-- WHYY - Zoe Read: ‘We Will Not Be Bullied:’ Plymouth Township Pushes Back Against Developer Or Proposed A.I. Data Center In Montgomery County
-- Environmental Health Project Blog: Strategies From The Front Lines - How Communities Fight Data Centers - One Person's Experience From Springdale, Allegheny County
-- The Shenandoah Sentinel: PPL Follows Through With Threat, Begins Eminent Domain Proceedings For Grid Improvements Paid For By Ratepayers To Feed Proposed A.I. Data Center In Luzerne County
-- Scranton Times: PPL Corp, Blackstone Spend $40.4 Million To Purchase 500 Acres In Jenkins, Plains, Salem Twps. On Possible A.I. Data Center Power Plants In Luzerne County
-- PennLive - Charles Thompson: Three Mile Island Nuclear Data Center Power Plant Restart Continues Checking Boxes, Stoking Fears
-- PA Capital-Star: Concerns Persist As Three Mile Island Nuclear Data Center Power Plant Progresses Toward 2027 Restart
-- Post-Gazette - Anya Litvak: Westinghouse Nuclear Technology Company Files To Become Public Company [Riding Hope Of Nuclear Power Renaissance With A.I. Data Centers]
-- The Water Center, University Of Pennsylvania: Research Examines Case Studies On The Local Impact Of A.I.- Driven Data Center Growth In PA And Water Use, Energy, Communities
-- The Guardian: US Environmental Groups Urge EPA To Reject New PFAS ‘Forever Chemical’ To Cool A.I. Data Centers
NewsClips - Data Center Politics:
-- Spotlight PA: Where Governor Candidates Garrity, Shapiro Stand On Energy Costs, The Environment, More
-- Scranton Times: Republican Candidate For Governor Garrity Calls For Protecting Farmland From A.I. Data Center Development At Ag Roundtable
-- City & State PA: Q/A With PA US Sen. Dave McCormick - Data Centers, Other Issues
-- Wilkes-Barre Times-Leader/AP: Democratic Candidate [Cognetti] For PA Swing Congressional Seat Targets A.I. Data Centers To Oust Republican [Bresnahan]
-- Scranton Times: Republican Con. Bresnahan Calls For Local Control Of A.I. Data Center Development
-- Capital & Main: In Pennsylvania, The A.I. Data Center Wars Hit The Ballot Box; Voters Angry About Rising Electricity Bills
-- PA Capital-Star: Pro-Data Center Industry Group Behind Ad Campaign In Oregon, Pennsylvania And 5 Other States
-- AP: Democrat’s TV Ad Uses Data Centers In Effort To Oust PA Republican Congressman
-- Wilkes-Barre Times-Leader/AP: Democratic Candidate [Cognetti] For PA Swing Congressional Seat Targets A.I. Data Centers To Oust Republican [Bresnahan]
-- Scranton Times: Republican Con. Bresnahan Calls For Local Control Of A.I. Data Center Development
-- Bloomberg: Backlash Over A.I. Data Centers, Energy Costs Tests Republican Hold On Ohio
[Posted: July 28, 2026] PA Environment Digest
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