(The Center Square) – Rapid expansion of data centers in the mid-Atlantic region has leaves its power grid’s operator, PJM, standing at a crossroads: how can electricity supply keep up with exponential growth in demand without spiking bills for ratepayers?
After a Wednesday meeting with all of the organizations members – which include utility companies, state regulators, power plants, transmission providers, project developers, and commercial and industrial businesses – there’s still no path forward.
This, despite 12 proposals put forward for a vote. None earned majority support.
“The growth of data centers is colliding with the reality of the power grid,” said Tom Rutigliano, senior advocate for climate and energy at Natural Resources Defense Council. The advocacy group worked with Sen. Katy Fry Hester, D-Md., on one of the rejected plans.
Rutigliano told The Center Square that data centers are showing up and quickly adding cities’ worth of electric demand to the grid. Figuring out how to build power plants quickly enough to meet that demand is a $100 billion question, and reliability is at stake.
He surmises that PJM members ultimately backed proposals that served their own interests, preventing any real solution from advancing and leaving the grid’s board of directors with a hard choice – one he is optimistic will incorporate the best of each plan.
“We hope they fulfill their obligation to the 67 million people in the PJM region and commit to protecting reliability, treat all customers fairly, and not subsidize data centers at public expense,” Rutigliano said.
In addition to grappling with the core issues of reliability and affordability, open access is just as critical, Rutigliano said. It ensures all generators, including clean energy projects, have an equal opportunity to connect to the grid.
He warned that some proposed fast-track processes would heavily favor large fossil fuel plants, creating a permanent two-tier system where fossil fuel “gets a kind of concierge class connect to the grid and clean energy sits in coach.” From where NRDC sits, he added, that would be an unacceptable outcome.
Rutiglio acknowledged that while renewables alone aren’t enough to guarantee grid reliability, strategically combining them with storage and maintaining a diverse energy mix can create a reliable grid.
It is absolutely feasible, he said, to achieve 80-95% renewable integration. And, though the last stretch is the most difficult, it’s nowhere near being a problem – renewables make up single-digit percentages on PJM’s grid.
He said that renewables, combined with energy storage, can be built far faster than new gas turbines; often in 18 to 24 months, compared to years-long turbine waitlists and pipeline delays. Because storage is quicker to deploy and easier to site, he hopes the final policy outcome will encourage tech companies toward large-scale storage solutions. The goal, he added, isn’t to block data centers but to ensure they don’t shift risks onto the public, which is the goal of the “bring your own” proposals.
Roughly one-third of a data center’s cost is the power plant needed to serve it, he stated, and under the current system, taxpayers foot the bill for speculative projects – whether they get built or not – which he suggests is one of the main drivers for “bring your own.”
The voting at the Nov. 19 meeting resulted in none of the 12 proposal packages obtaining a requisite “passing” vote, Jeffrey Shields, PJM spokesman, told The Center Square via email.
“PJM opened this conversation about the integration of large loads and greatly appreciates our stakeholders for their contributions to this effort,” he said. ”The stakeholder process produced many thoughtful proposals, some of which were introduced late in the process and require additional development.”
This vote, Shields said, is advisory to PJM’s independent board, which can and does expect to act on large load additions to the system and will make its decision known in the next few weeks.
