PJM will be able to cut power to data centers in the US to prevent blackouts on the country's largest grid

PJM Interconnection, the largest power grid operator in the United States — with territory stretching from Virginia to Illinois and covering 67 million customers — has announced that starting in June 2027 it will be able to temporarily cut off electricity supply to data centers and other large consumers during energy shortages. The measure comes after an auction to add new generation capacity failed to cover projected needs, and PJM is already organizing another additional auction to try to add more capacity.

The decision will not affect every facility: the cutoffs will apply only to data centers of 50 megawatts or more. It is essentially an extension of "demand response" programs, a mechanism that has existed for decades and has traditionally included large industrial users such as factories. As in those programs, affected customers will receive financial compensation, and advance notice before a cutoff could range from 30 minutes to several days, depending on how projected demand evolves.

The backdrop to this measure is the overwhelming pace of data center construction, which is pushing grid operators to the wall when it comes to guaranteeing sufficient supply. According to the article, data centers are expected to consume four times more electricity by 2035 than they do today, a jump in demand that helps explain why PJM has had to resort to this kind of selective cutoff as a safety valve to avoid widespread blackouts across the grid.

A predictable consequence of this policy is that it will push many data centers — both new and existing ones — to develop their own on-site power sources, so as not to depend on a grid that can cut off their supply at critical moments. Operators that do not invest in their own generation will likely turn to backup generators, which tend to be more expensive to operate and often more polluting. Diesel generators are especially popular in the sector because the fuel is easy to obtain and can be stored on site. Federal rules allow these diesel generators to be used up to 50 hours a year for demand response events, and up to 100 hours a year in situations such as emergencies or maintenance.

This diesel generator issue is not merely theoretical: the article itself notes that just this week Vantage Data Centers was called out for its apparent coordination with Virginia environmental regulators to cast doubt on a report warning that backup diesel generators could contribute to tens of millions of dollars in annual health damages for people living near a 96-megawatt data center in northern Virginia. The case illustrates the growing tension between the accelerated expansion of AI infrastructure and the communities that live with its environmental externalities.

PJM, for its part, had already been facing criticism in recent months over its handling of both new generation capacity and the arrival of large new consumers, data centers among them. The article notes that over the past year wholesale electricity prices in its territory have nearly doubled, and that PJM's own independent market monitor has attributed much of that increase to data centers.

Taken together, the story portrays a turning point in the relationship between the expansion of artificial intelligence infrastructure and the power grids that sustain it: when not even the country's largest grid can auction enough new capacity to keep pace with demand, the response is to selectively ration the biggest consumers, shifting part of the cost of that scarcity onto the tech industry — and, ultimately, onto the communities near its backup facilities.