➤ Key Highlights
An upcoming decision by the largest U.S. grid operator could reshape the data center development landscape and impact millions of Americans' utility bills.
Surging data center development is creating havoc across the territory of PJM Interconnection, a power transmission system spanning 13 states in the mid-Atlantic and Midwest.
Data centers are connecting to the grid faster than new power generation needed to supply them.
PJM is in the final stages of a process to establish new rules and policy tools governing data centers.
In November, a committee of stakeholders voted on 12 different proposals for how to reform the data center interconnection process, and not a single proposal passed.
PJM is home to a higher concentration of data centers than any other U.S. grid system.
Total electricity use within PJM is expected to grow by 166 gigawatts by 2030, with 55% of that growth coming from data centers, according to Grid Strategies.
PJM Interconnection, the largest U.S. grid operator, is nearing a decision on new rules for data center interconnection. Data center development is outpacing new power generation, leading to capacity and pricing pressures within PJM’s 13-state territory. Recent stakeholder votes failed to reach consensus on reform proposals.
The event underscores the complexities of aligning regulatory frameworks with evolving infrastructure demands in a dynamic energy landscape. As energy-intensive users rapidly increase demand, existing policies and approval mechanisms face pressure to adapt. Regulatory recalibration becomes essential to balance rapid development, system reliability, and equitable access. This situation highlights the challenge of synchronizing policy, infrastructure readiness, and market growth under accelerating technological shifts.
⚠️ Why it matters now
For CRE360’s audience, regulatory alignment is critical to enabling or constraining large-scale infrastructure projects. Delays or uncertainty in policy adaptation can affect development timelines, cost structures, and the feasibility of future investments. Understanding the regulatory environment helps all stakeholders assess risk and anticipate potential shifts in project delivery or operational dynamics.
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➤ TAKEAWAY
The outcome of PJM’s rulemaking process may establish new benchmarks for how infrastructure projects interface with evolving utility systems. Market participants could see changes in approval timelines, interconnection requirements, and capacity planning. Continued engagement with regulatory developments will be important as policy tools evolve to keep pace with demand.
