The nation’s largest grid operator is deciding how to keep up with the data center surge’s strain on the electric grid, but states — and customers — hold no formal seat at the table.
PJM Interconnection, which manages the electricity market for 13 mid-Atlantic and midwestern states, will submit its proposal on potential data center regulations to the Federal Energy Regulatory Commission (FERC) by year’s end. The move will affect 67 million customers across PJM’s territory, and the energy company promises to hear out all stakeholders, like when it reviewed proposals at a closed meeting in November.
“We really think that states, especially with strong clean energy laws, like Maryland, should be watching out for this.”
Claire Lang-Ree, Natural Resources Defense Council advocate
Yet, the decision ultimately rests with an independent board made up largely of former energy-industry professionals, barred from holding financial ties or personal relationships to PJM member companies. In Maryland, this could determine the speed of data center expansion and the energy buildout required to support it — and on what it could mean for residential electric bills.
“We’re estimating that going forward, electricity bills could go up by $70 a month,” Natural Resources Defense Council (NRDC) advocate Claire Lang-Ree told Technical.ly. “That’s a really crazy price increase and the general public could bear the brunt of it.”
It’s not as if legislators and stakeholders have no say in PJM’s process. In August, PJM launched a Critical Issue Fast Path (CIFP). The expedited stakeholder track allows local utilities, state representatives and consumer advocates who work with PJM to provide input on its decision.
Over the months-long CIFP process, stakeholders debated ways to ease data center strain, including requiring new developments to bring their own power generation. In the final “advisory” vote in November, none of the 12 proposals put forward passed.
Even if they had, PJM wouldn’t have been bound to follow them.
States are growing increasingly frustrated with the opacity of PJM’s process. Earlier this year, governors from both Republican- and Democrat-led states threatened to leave the grid operator unless they were granted a larger role in governance.
A departure by a state like Pennsylvania would hit neighbors such as Maryland especially hard, since net energy-importing states rely heavily on surrounding states for power. PJM says that’s unlikely.
“Incidentally, no state has ever left PJM,” PJM spokesperson Jeffrey Shields said.
Still, with lawmakers shut out of the board, all residents can do is speak up. So far, they’ve shared a vast variety of plans for PJM to consider.
Other providers give states more say
Grid operators such as the Southwest Power Pool and the Midcontinent Independent System Operator give states a much stronger hand. For Southwest Power Pool, its regional state committee directly oversees electric resource adequacy and decides how transmission upgrade costs are shared.
PJM lets states engage in its stakeholder process and meets regularly with governors and regulators, but their input doesn’t necessarily determine the board’s final rulings.
“It’s the kind of decision that you would imagine elected officials doing,” Lang-Ree said. “It’s a policy that will affect everyday Americans.”
Its review comes as the grid operator projects that data centers could add 30 gigawatts of demand by 2030, or roughly the power consumption of 20 million households. That strain is already showing up in its markets.
In PJM’s most recent capacity auction, held in July for the 2026 to 2027 delivery year, the clearing price jumped to $329.17 per megawatt-day, more than ten times the $28.92 price for 2024 to 2025. These costs flow through utilities to households and businesses, leading to higher electricity bills.
Dissenters say make data centers wait until there’s reliable power
PJM’s independent market monitor, Monitoring Analytics, proposed one of the strictest approaches: Data centers shouldn’t be allowed on the grid until there’s reliable generation and transmission to support them.
The plan calls for an “interconnection queue” to assess the capacity needs of new large data center loads.
It also recommends that data centers supply their own generation — such as power plants or solar farms — to keep other customers from shouldering the cost of a strained grid.
“PJM should not permit the interconnection of large new data center loads if they cannot be served reliably,” the proposal read. That could mean slower data center growth locally and missing out on the potential economic benefits they provide.
However, PJM staff refused to confirm during the CIFP process whether the operator can force data centers to wait, according to industry publication Utility Dive. After the advisory vote, the market monitor filed a complaint with FERC to assert that authority.
Other groups encourage data centers to bring their own power
Four governors joined the industry group Data Center Coalition to propose a less restrictive strategy. They argue that states should fast-track data center projects that bring their own power that matches expected energy use.
These developments would receive priority in permitting and siting reviews, which often slow down new projects.
The proposal aligns with the priorities of governors from Virginia, Maryland, Pennsylvania and New Jersey, all of whom have pushed to attract new developments.
For instance, Maryland Gov. Wes Moore eased restrictions on backup generators for new data centers in 2024.
Another proposal, backed by a group of lawmakers across PJM’s territory and the NRDC, also calls for data centers to supply their own power.
But their plan adds a key requirement. Unless data centers install generators that strengthen overall grid reliability, they must accept interruptible service during extreme weather events, such as hurricanes, when power supplies are strained.
These events are rare, roughly one-tenth of 1% of hours, NRDC says, but the threat is still enough to push data centers to add their own capacity.
“It’s not very frequent, but it’s the only way that really protects the general public from these reliability risks,” Lang-Ree said. The proposal also aims to keep risks contained within the regions where they arise, she added.
Large-scale generation trickles down to consumers
Because Maryland relies on PJM’s centralized capacity market rather than its own state-level planning — unlike states such as Virginia, which have mechanisms for independent resource management — residents could end up bearing the costs of energy-hungry developments in other states in the grid operator’s region.
“States that rely on the market should have just as good reliability and just as fair costs as any other state,” Lang-Ree said.
Lang-Ree also criticized PJM’s proposal that would allow 10 energy projects to connect to the grid each year through an expedited process.
She argued that, while the proposal is technically resource-neutral, it would favor gas plants over clean energy because the plan’s large generation targets are harder for solar and wind projects to meet.
For Maryland, already struggling to meet its clean energy goals, any slowdown in renewable projects would make the challenge even harder.
“We really think that states, especially with strong clean energy laws, like Maryland, should be watching out for this,” Lang-Ree said.
Shifting dynamics at PJM
PJM is open to collaborating more with stakeholders, such as the newly formed PJM governors’ collaborative, on tackling these issues, according to Shields from PJM. The governors’ collab plans to meet regularly to discuss ways to reform grid governance and tackle energy affordability.
Regardless of how PJM’s structure evolves, the operator will soon submit a proposal to FERC which could impact Maryland communities. Open meetings are a chance to get an inside look at its plan, especially as states grapple with grid strain.
“We welcome the opportunity to work with the new Governors’ Collaborative on governance reforms and to serve as the bridge between states and our members in addressing these shared challenges,” Shields wrote in an email.
