Overview
- Federal officials and 13 governors asked PJM to hold an emergency auction offering 15-year capacity contracts, with the Energy Department saying data centers would pay for new generation whether they use it or not.
- Jefferies estimates the plan could support roughly $15 billion in projects, adding about 7.5 gigawatts of new capacity to the PJM grid if implemented.
- PJM said it is reviewing the proposal and released a 14-page plan to speed data-center connections, including steps such as triggering its backstop reliability mechanism and directing staff to craft further actions.
- The push follows PJM’s latest capacity auction, which procured about 134,000 MW for 2027–2028 yet fell more than 6,600 MW short of reliability needs as costs jumped to $16.4 billion from $2.2 billion in 2023.
- Data centers are projected to use 6.7%–12% of U.S. electricity by 2028, and communities near large clusters have seen steep bill increases, prompting measures like special rate classes and state cost-sharing rules as tech firms pursue nuclear uprates and unapproved SMR designs that face lengthy timelines.