No More Data Centers In Largest US Power Grid Unless They Can Be Reliably Served: Market Monitor

By Ethan Howland of UtilityDive

• The Federal Energy Regulatory Commission should tell the PJM Interconnection that it can only add large data centers to its system when they can be reliably served, according to a complaint filed Tuesday at the agency by the grid operator’s market monitor.

• PJM is considering proposing to allow data center loads that it cannot serve reliably and that will require periodic blackouts for data centers and other customers, Monitoring Analytics, the grid operator’s market monitor, said.

• “That result is not consistent with the basic responsibility of PJM to maintain a reliable grid and is therefore not just and reasonable,” Monitoring Analytics said.

The market monitor contends that PJM Interconnection – the largest power grid in the United States, which runs the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and the District of Columbia and serves 65 million customers - has the authority to require that large new data centers wait in a queue to be added to the system until there is adequate generation and transmission to serve those facilities, according to the complaint.

However, during PJM stakeholder discussions this fall on potential large load interconnection rules, PJM staff and many stakeholders were unwilling to say that the grid operator has that authority, the market monitor said.

“If PJM has an obligation to provide reliable service to all PJM loads, is it just and reasonable for PJM to add new loads that it cannot serve reliably?” Monitoring Analytics asked. “The answer to that question is no.”

The complaint was filed days after PJM stakeholders failed to agree on a new framework for adding data centers and other large loads to PJM’s system. During the stakeholder process, Monitoring Analytics proposed that data centers be required to have matching, new power supplies before they are allowed to interconnect to the grid.

PJM’s board plans to develop a large load interconnection proposal and file it for approval by FERC.

It would make the board’s job “significantly more manageable” if FERC indicates that it intends to rule on the complaint and then rules in the near future, Monitoring Analytics said.

“PJM markets face an urgent need for immediate clarification of PJM’s authority over the interconnection of large new data center loads,” the market monitor said.

Large data center load additions in PJM have been driving up transmission costs as well as energy and capacity prices, according to the market monitor.

Existing and expected data center loads increased PJM’s capacity revenues in its last two capacity auctions by $16.6 billion, Monitoring Analytics said. “This total will continue to grow until the issues associated with the additions of large data center loads are addressed,” the market monitor said.

PJM is reviewing the complaint, Jeffrey Shields, a spokesman for the grid operator, said. PJM runs the grid and wholesale power markets in 13 Mid-Atlantic and Midwest states and the District of Columbia.