Largest U.S. Grid Plans Temporary Power Cuts for Major Data Centers

PJM Interconnection plans to temporarily reduce electricity service to large data centers and other major users during supply shortages. The grid operator serves 67 million people from Virginia to Illinois and has struggled to add generation quickly enough for a wave of new computing facilities.

The curtailment program will begin in June 2027 and apply to sites using at least 50 megawatts. Affected customers will receive compensation, similar to demand-response programs long used by manufacturers. Notice may range from minutes to days depending on forecasts and system conditions.

PJM adopted the measure after an auction for future generating capacity fell short. Data-center electricity demand is expected to grow several times over during the next decade, while new power plants and transmission lines require years of permitting and construction. Wholesale prices in the region have nearly doubled over the past year.

Operators may respond by building on-site power or relying more heavily on diesel backup generators. That can keep servers running but shift costs and pollution into surrounding communities. Federal rules allow limited generator use for emergencies, maintenance and demand-response events.

The 50-megawatt threshold covers facilities large enough to shift grid conditions, but many campuses are built in phases or through related entities. PJM will need rules preventing developers from dividing projects to avoid curtailment. Compensation should also reflect real interruption costs without rewarding companies for creating demand the grid cannot reliably serve.

Curtailment rules could become part of every large data-center site decision. Developers may choose regions with more generation, build storage or accept lower reliability in exchange for faster interconnection. Utilities should not shift ordinary household risk onto new customers without a transparent cost allocation. At the same time, abrupt cuts can damage equipment and contracted services, so participation needs technical notice and measurable limits. The policy can protect the grid if it rewards flexible demand while preserving accountability for the transmission and generation investments needed to support long-term growth.

Curtailment recognizes that data centers cannot receive unlimited priority over households and essential services. It is still an emergency tool, not a long-term capacity plan. PJM, utilities and developers need clearer interconnection rules, transparent demand forecasts and investment in generation and transmission. Otherwise the cost of rapid AI construction will appear as higher bills, dirtier backup power and a less reliable grid.