PJM to curtail power to large data centers during shortages starting June 2027

PJM Interconnection, the operator of the largest U.S. electrical grid, announced it will temporarily cut off power to large data centers during periods of shortage, starting in June 2027. The decision follows an auction for new generating capacity that failed to meet projected demand, leaving grid operators scrambling to balance supply and the breakneck pace of data center construction.

The curtailment will apply only to data centers that are 50 megawatts or larger, and will be implemented under PJM’s demand response program. Customers who experience power cuts will receive compensation, with advance notice typically ranging from 30 minutes to several days, depending on forecasted demand.

Data centers are projected to use four times more electricity by 2035 than they do today, further straining grid capacity. In response, operators of affected facilities may set up their own on-site power sources or rely on backup generators, which are generally more expensive to operate and often more polluting.

Diesel generators are commonly favored by data centers due to the fuel’s availability and on-site storage potential. Federal regulations permit their use for up to 50 hours per year for demand response events, and up to 100 hours per year for emergencies and maintenance.

The announcement comes amid criticism of PJM’s management of new generating capacity and its handling of large new users, including data centers. PJM’s territory covers 67 million customers across a region stretching from Virginia to Illinois, and wholesale electricity prices in the area have nearly doubled over the past year, with data centers blamed for much of the increase.