The largest electricity grid operator in the United States now finds itself confronting a stark and consequential decision—whether to prioritize the rapid integration of massive new data centers into its network or to ensure the uninterrupted and dependable delivery of power to the tens of millions of existing customers who depend on it daily. The issue gained formal attention following a complaint submitted on November 25 to the Federal Energy Regulatory Commission (FERC) by Monitoring Analytics, LLC, the independent entity tasked with overseeing the fairness and transparency of PJM Interconnection’s market operations. In this filing, the watchdog urged federal regulators to explicitly require that PJM be permitted to connect new, high‑demand data centers only when the overall reliability of the grid—and the guaranteed service to every existing customer—can be fully maintained without risk of disruption.
According to the complaint, PJM’s current proposals would allow large data centers to join the grid even in instances where the system lacks the capacity to serve their substantial load demands consistently. Such conditions, Monitoring Analytics warned, could inevitably force PJM to impose temporary service restrictions or even rotating blackouts, affecting either the data center facilities themselves or ordinary households and businesses. The filing emphasized that this outcome would represent a direct deviation from PJM’s fundamental duty—to sustain a resilient and dependable power grid—and therefore would fail the legal and ethical standard of being “just and reasonable.”
PJM Interconnection oversees the flow of electricity for a vast geography encompassing approximately 369,000 square miles and serving more than 65 million people across all or parts of 13 states and the District of Columbia. Although PJM is not itself a retail utility that sells power directly to consumers, it performs the essential function of coordinating the wholesale transfer of electricity among utilities, generating companies, and states within its network. As data-intensive enterprises like hyperscale data centers proliferate, the complaint contends that their escalating power needs have begun to impose significant and measurable financial burdens on the system, driving up transmission expenses as well as both energy and capacity market prices.
Monitoring Analytics further noted that in PJM’s two most recent capacity auctions, the inclusion of existing and anticipated data center loads already propelled total capacity revenues upward by an extraordinary $16.6 billion—a trend the organization predicts will only continue to intensify as additional facilities seek interconnection. This rapid rise, it argued, vividly illustrates the compounding costs that other customers must bear to accommodate new high-density energy users.
The complaint also recounted deliberations held by PJM’s Board of Managers in a session described as a “Critical Issues” meeting, convened specifically to confront the question of how to manage data center integration responsibly. Despite the importance and urgency of the matter, the board reportedly reached no resolution. According to Monitoring Analytics, this impasse stemmed largely from a widespread assumption among stakeholders that PJM had no discretion but to accept all proposed large-load interconnections, regardless of potential reliability consequences. The watchdog’s objective in appealing to FERC, therefore, was to seek regulatory clarity—an authoritative statement that PJM is, in fact, empowered to decline new loads unless the operator can demonstrate that the system is capable of serving them without jeopardizing grid stability. Such clarification, the firm wrote, would make the board’s decision-making “significantly more manageable” by reinforcing reliability as the paramount criterion for any future expansions.
A spokesperson for PJM told Business Insider that the organization is still in the process of reviewing the complaint and consequently could not offer public comment. However, the representative confirmed that the Board of Managers intends to take up the “large load” concerns in subsequent meetings and is expected to outline its next steps in the coming weeks.
The issue raised in this dispute reflects a national phenomenon. Across the United States, the explosive growth of data centers—the physical backbone of cloud computing and artificial intelligence—has been pushing regional energy systems to their limits. Nowhere is this trend more visible than in Virginia’s so-called “data center alley,” where clusters of enormous facilities have driven dramatic increases in electricity demand. The North American Electric Reliability Corporation (NERC), in its own November report, warned that the extraordinary rise in data center consumption is emerging as one of the principal factors behind surging wintertime power demand, which correspondingly heightens the probability of grid strain and localized blackouts.
Adding another layer to this expansive energy narrative, the federal government under the Trump administration has announced a plan to commit $500 billion to the construction of advanced artificial intelligence infrastructure in cooperation with major technology entities including OpenAI, Oracle, and SoftBank. In a letter sent to the White House Office of Science and Technology Policy, OpenAI’s CEO, Sam Altman, underscored the magnitude of the challenge, asserting that the United States must add roughly 100 gigawatts of new electrical generating capacity every year to remain globally competitive in the accelerating “AI race.” This ambitious forecast highlights the same underlying tension at the heart of the PJM debate: the collision between exponential digital expansion and the physical constraints of the existing power grid. Whether regulators and operators can reconcile these forces—balancing innovation with reliability—will likely shape the trajectory of America’s energy and technological future for years to come.
Sourse: https://www.businessinsider.com/federal-complaint-warns-pjm-against-servicing-more-data-centers-2025-12
