Federal energy regulators shoot down grid operator’s plan to cut power to data centers during shortfalls

The nation’s energy regulators have shot down a bid from a regional grid operator to cut power to some large data centers during a supply shortfall — leaving the issue largely in the hands of states.

Regional grid operator PJM, which manages the electric grid for several East Coast and Midwest states, proposed an ability to cut power to new large consumers when it’s facing a shortage.

Its proposal would have applied to large data centers that don’t bring their own power sources.

However, the Federal Energy Regulatory Commission (FERC) rejected PM’s proposal, saying it may violate the Federal Power Act.

The commissioners wrote that the law “leaves to the states alone ‘any other sale’ — most notably any retail sale” of electricity.

The ruling comes after bipartisan governors and the Trump administration pushed PJM to do more to address rising electricity prices, in which data centers’ massive electricity demand is a factor.

Jeff Dennis, senior counsel at consulting firm Co2efficient, said that the decision puts pressure on states to set their own policy. Dennis, a former FERC staffer, said that the policies that states put in place could differ significantly.

He said that “adds to the number of things that the states and that PJM and to some degree, still FERC, have to sort out” to avoid high power prices and blackouts in the future.

PJM spokesperson Jeff Shields said in an email that the grid operator is “reviewing the Commission’s order with an eye toward how we can fulfill FERC’s requirements while recognizing the responsibilities FERC indicated belong to the states and honoring the concept that existing electricity customers should not be unfairly burdened by new, energy intensive customers in the form of higher costs or decreased reliability.”