After months of disputes over handling increased power demand from AI-driven data centers and rising electricity prices, PJM Interconnection, the largest U.S. grid operator, failed to agree on a solution.
These disagreements were evident in an advisory vote during the final phase of PJM’s expedited rulemaking track, known as the Critical Issue Fast Path, or CIFP.
CIFP aims to ensure PJM can meet regional demand as data centers approach using 30 gigawatts by 2030, similar to the energy needs of 20 million homes. This growth has already led to significant electricity price increases in states like New Jersey, impacting political issues like the gubernatorial race. A statewide survey showed voters believe data centers should pay more for their grid usage.
Energy projects needed to add gigawatts to the grid face long waits in the PJM interconnection queue.
During the meeting, hundreds of industry representatives reviewed a dozen proposals, ranging from requiring data centers to produce their own energy to halting new connections until reliable service is assured.
Proposals needed two-thirds approval to be endorsed, giving the PJM Board a non-binding endorsement for decisions on rule changes to be filed with the Federal Energy Regulatory Commission (FERC).
“PJM’s board are directors of a private company at the end of the day, and they make the decisions by themselves. So an advisory vote is just what it says: It’s providing advice to the board,” said Tom Rutigliano of the Natural Resources Defense Council (NRDC).
None of the proposals met the two-thirds threshold.
Rutigliano noted the vote showed a divided industry, leaving the PJM board with the freedom to craft their policy or choose among the proposals. PJM operates a wholesale electricity market across multiple states.
“The options open to them (the Board) are they can pick one of these or they could cobble together some sort of Frankenstein version and pick and choose different parts of the proposals. Or come up with their own,” said Nick Guidi of the Southern Environmental Law Center.
Mark C. Christie, former FERC chairman, criticized PJM members for representing mainly energy industry interests over consumers.
“[I]t is really just an insiders’ game and always has been. Consumers, especially residential, have no serious representation or influence in this ‘inclusive’ process,” Christie wrote on LinkedIn.
Independent monitor Joseph Bowring proposed withholding data center permits until PJM guarantees reliable power.
“I’m quite sure the data centers do not want to be added quickly and unreliably,” said Bowring, president of Monitoring Analytics.
A coalition of governors and the Data Center Coalition, including tech companies like Google, proposed encouraging data centers to supply their own power for faster permitting. A bipartisan lawmakers’ proposal suggested cutting data center power during shortages unless they have backups, to prevent pollution from diesel generators.
Energy experts say powering data centers will likely require natural gas plants. However, Julia Kortrey of Evergreen Action suggested looking to Texas for renewable energy development.
The PJM board will release its detailed solution in December, aiming to file rule changes with FERC by year-end. FERC will then evaluate if the proposal is fair and non-discriminatory.
Original Story at insideclimatenews.org