PJM adopts emergency plan to curb data center power demand

The operator of the largest electrical grid in the United States has approved an emergency plan to manage surging electricity demand from data centers, warning that facilities unable to secure their own power could face involuntary outages starting in mid-2027. The PJM Interconnection board signed off on the two-part strategy on Tuesday, July 28, 2026, aiming to avert widespread reliability risks and shield existing consumers from soaring costs driven by new artificial intelligence and hyperscale facilities.

The plan centers on a new "connect and manage" framework. Under this system, data centers and other large loads adding 50 megawatts or more of demand must either supply their own incremental power generation or accept being first in line for curtailment during grid shortages. The grid operator stated that customers subject to these power cuts would receive compensation, similar to longstanding demand-response programs for large industrial users. Warnings for such curtailments would be issued in advance of emergency conditions.

Simultaneously, PJM will launch a one-time emergency capacity procurement, termed a "reliability backstop," with a supplemental auction potentially...