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FERC Orders PJM to Set Rules for Data Center–Power Plant Colocation

The decision orders a tariff rewrite to protect ratepayers under fast-growing AI electricity demand.

Overview

  • PJM must revise its open-access transmission tariff, which FERC found unjust and unreasonable, to spell out terms, conditions and rates for serving co-located loads.
  • New frameworks to be developed could include charging large users only for the transmission services they use or requiring payments to replace energy diverted from the broader grid.
  • The unanimous order follows a dispute over a proposed Amazon data center colocation at Pennsylvania’s Susquehanna nuclear plant.
  • CNA reports that rapid data center growth has helped drive PJM capacity prices up roughly 1,000% in two years, with some areas seeing more than 20% increases in utility bills.
  • Power plant owners welcomed the ruling while utilities and consumer advocates warned of reliability and cost-shift risks, and AP reports the move could guide responses to a federal push for faster large-load connections.