Largest U.S. grid may temporarily cut power to major data centers

Lead

The largest electricity grid operator in the United States is preparing to treat large data centers as a controllable load when power supplies are tight. PJM Interconnection, whose territory stretches from Virginia to Illinois, says it will be able to curtail electricity to data centers and other major users during shortages in order to prevent broader blackouts.

This is more than a technical grid-management change. It is a sign that the AI infrastructure race is no longer constrained only by chips, servers and land. Electricity availability is becoming a strategic bottleneck.

Key points

• The rule has a size threshold: PJM’s curtailment plan is expected to begin in June 2027 and will apply to data centers of 50 megawatts or larger, along with other large electricity users.
• The trigger is capacity stress: The decision follows an auction intended to bring new generation onto the grid that did not deliver enough additional capacity.
• It resembles demand response: Programs that pay large users to reduce demand during peak or shortage events have existed for decades. Customers usually receive compensation and advance notice, which can range from about 30 minutes to several days depending on forecasts.
• Data center demand is still rising fast: According to the source material, data centers are expected to use four times as much electricity by 2035 as they do today.
• Backup power may become more important: Operators that want to avoid interruptions may build on-site power or rely more heavily on backup generators, often diesel units that are costly and more polluting.

Why it matters

For AI companies, cloud providers and data center developers, power reliability is becoming part of the product stack. If a facility can be curtailed during high-stress grid events, operators must factor that risk into service-level commitments, site selection and energy procurement.

The pressure is especially visible in PJM’s region, which serves about 67 million customers and includes major data center markets. Wholesale electricity prices in the region have nearly doubled over the past year, and PJM’s independent market monitor has attributed much of the increase to data centers. That creates a political and economic tension: AI infrastructure promises growth, but its electricity demand can also raise costs for other users.

The environmental trade-off is also important. Many data centers favor diesel backup generators because fuel is widely available and can be stored on-site. Federal rules allow such generators to run for up to 50 hours per year for demand response events, and up to 100 hours per year for emergencies and maintenance. As more large facilities rely on backup generation, nearby communities are likely to scrutinize air quality and health impacts more closely.

The broader takeaway is clear: the AI buildout is forcing energy planning into the center of technology strategy. The next bottleneck may not be only GPU supply. It may be whether the grid can deliver enough reliable power without triggering higher prices, more pollution or emergency curtailments.

Source: TechCrunch AI