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FERC rejects most of PJM's plan to connect data centers without matching new generation

Federal regulators rejected the core of PJM Interconnection's framework for connecting data centers and other large loads, ruling that imposing curtailment conditions on retail customers intrudes on state jurisdiction and appears discriminatory. FERC did approve a large-load definition and registry; the decision keeps capacity supply tight across the 13-state grid.

By Greener Numbers Editorial Team · Published October 19, 2026 · Updated 10/19/2026

The Federal Energy Regulatory Commission on October 9, 2026 rejected most of PJM Interconnection's plan for connecting data centers and other large electricity consumers to the grid, including its proposed Interim Resource Adequacy Service and associated 'bring your own new capacity' rules.

Under the rejected IRAS framework, large loads would have been allowed to interconnect without dedicated new generation if they agreed to curtailment ahead of grid emergencies. FERC found that several proposed tariff provisions would place obligations directly on retail customers, dictate which retail customers get curtailed, and set up a compensation framework that appears to establish a retail rate - all areas the commission said belong to state jurisdiction, and potentially discriminatory against large loads.

States keep the authority to designate which retail customers curtail during system stress, and FERC said it strongly encourages states to continue that work. The commission did approve PJM's proposed definition of large loads and a registry tracking each facility's location, ramp schedule and capacity supply.

Commissioner David Rosner wrote that excluding IRAS loads from PJM's capacity auction demand curve could distort market price signals. The rejection came about five weeks after FERC dismissed PJM's proposed backstop capacity procurement auction, leaving the grid operator and state commissions to find other ways to manage rapid data center load growth.

For consumers, the practical effect is continued tight supply and high capacity prices across PJM's 13-state footprint, with the rules for large new loads now routed through state proceedings rather than a single federal framework. PJM said it is reviewing the order with an eye toward fulfilling FERC's requirements while protecting existing customers from higher costs or reduced reliability.

Official source: Utility Dive ↗