Facilities lacking independent power sources would face curtailment under a proposal aimed at preserving grid reliability across 13 states and Washington, D.C.
The largest US power grid operator has proposed curtailing electricity supply to certain new large power users, including AI data centers, during grid emergencies beginning in June 2027, as surging demand threatens to outpace available generation capacity.
The proposal targets facilities that will fail to secure sufficient independent or contracted power supplies. PJM Interconnection will develop and maintain a Large Load Registry by detailed site, service areas, and whether they bring their own supply for better load management during capacity shortages.
“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. This will create a regional framework for curtailment. In PJM’s suite of Emergency Procedures, Load Management resources are paid to reduce consumption during extreme grid conditions to relieve strain on the system,” stated the company.
PJM Interconnection defines Large Loads as the 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.
The company forecasts that the 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.
“PJM’s proposal marks a significant shift by making electricity access conditional for some large new data centers during grid emergencies. It reflects the growing gap between AI-driven power demand and the pace of new generation and transmission, signalling that grid reliability is becoming as important as computing capacity,” said Pareekh Jain, CEO at EIIRTrend & Pareekh Consulting.
High risk for new builds
While PJM coordinates the wholesale electricity grid across 13 states, including Delaware, Illinois, Indiana, Kentucky, Maryland, etc., and the District of Columbia, not every data center will be affected by this development.
The proposal is expected to primarily impact new facilities that will fail to secure dedicated or contracted power supplies.
“The data centers most at risk are new ones being built that haven’t signed contracts for their own power source yet, especially smaller or newer companies without deep pockets. Giant companies like Amazon, Google, or Microsoft can more easily afford to build their own backup power, so they’re safer. The riskiest locations are places already packed with data centers, like Northern Virginia and growing areas in Ohio, Pennsylvania, and Maryland, where the local power grid is already stretched thin,” noted Jain.
Today, every modern data center has power backups and diesel generators for emergencies, but building on-site power sources before June 2027 will be difficult.
Jain explained that building a power plant takes a long time. Ordering the equipment can take 3-5 years because factories are backed up with orders, getting government permits takes time, and neighborhoods sometimes fight against new power plants or data centers being built nearby. Even hooking new power plants up to the grid can take years on its own.
The only realistic short-term measures are incremental ones. Jain added that the only realistic options in under a year are smaller fixes, like adding battery backups or agreeing to power cuts use during emergencies, not building a whole new power plant.
Beyond total energy supply, data centers face several other challenges as well. For instance, they experience long power connection queues, transmission constraints, rising electricity costs, transformer shortages, cooling requirements, and stricter sustainability regulations. While most US data centers have emergency generators, only a relatively small share can operate independently from the grid for extended periods, noted Jain.
But this is expected to change over the next few years. The share of US data center facilities expected to use onsite generation as their primary power source is expected to rise from 13% in 2024 to 38% by 2030, while those expected to run entirely on onsite power will increase from just 1% to 27%, per Bloom Energy.
Downstream threat to enterprise cloud workloads
The proposal highlights a new infrastructure risk that extends beyond data centers. If power constraints become common, organizations running workloads in cloud or colocation facilities could face indirect impacts ranging from higher operating costs to reduced capacity during emergencies.
“If a company rents computing power from a data center instead of owning one, their service could get shut off during a power emergency, and if a bunch of data centers are all in the same region, they could all get hit at the same time,” added Jain.
Therefore, Jain suggests companies should ask their providers whether their specific data center has backup power lined up. CIOs should also start spreading important work across multiple data centers in different regions, and figure out which of their computer tasks absolutely need nonstop power versus which ones can pause for a bit if needed.
A new reality for data centers
The proposal comes as data center developers across the US are already struggling to secure reliable electricity. The energy intelligence firm Currence has recently estimated that between 30% and 50% of the large-scale data center capacity expected to come online in 2026 will likely be delayed, with one of the primary reasons being mounting power constraints. Currence found that only about 5 GW of that capacity is currently under construction, leaving roughly 11 GW remains in the announced stage with no visible construction progress, despite typical build timelines of 12–18 months.
Given the current shortages, PJM Interconnection’s proposal is unlikely to remain an isolated case as other grid operators facing rapid AI-driven electricity demand could adopt similar policies requiring large data centers to secure their own power or accept curtailment. This will make power availability a key factor in future data center site selection and investment decisions, added Jain.
