Lawmakers, advocates pitch plans to rein in data centers, their power demands

by Christine Condon, Maryland Matters
November 17, 2025

A coalition of state lawmakers from around the 13-state PJM Interconnection grid presented their plan Monday for handling the explosion of data center requests in the region and the tremendous demand for power that comes with them.

The lawmakers’ proposal built on a plan put forward by a number of state governors in the region that would provide incentives for data centers to bring their own power generation to the grid, and would extend a cap on a key PJM auction that partially drives consumer prices, among other attempts at reform.

But the legislators’ plan also says that data centers that don’t bring their own power should be the first to have their power cut off in an emergency, not other power customers, if power demand reaches a point where the system is stressed.

The proposals are in response to a call from grid operator PJM for ways that it can “address the reliability and affordability challenges associated with rapid load growth from large new data center development.” Maryland Sen. Katie Fry Hester (D-Howard and Montgomery), one of the lawmakers on hand Monday, called PJM’s data center decision one of the “most consequential decisions of this decade.”

PJM predicts that peak load on the electric grid will increase by 32 gigawatts from 2024 to 2030, with data centers accounting for all but 2 gigawatts of that growth. The resulting electric grid expansion would cost billions, further straining consumer’s pocketbooks as they face already high bills.

Surging data center growth drives locals to fight for more say

In their proposal, the governors of Maryland, New Jersey, Pennsylvania and Virginia were joined by the Data Center Coalition, which represents data center companies, and by the Exelon and PPL companies, utilities that serve millions of customers across several states in the PJM region. They called for data centers that bring their own power to be given expedited entry into the electric grid.

The legislators’ proposal said those data centers that don’t bring their own power to the grid should be the first ones cut off when the system is overwhelmed.

“When there’s not enough power to go around, it affects data centers and households alike,” said Claire Lang-Ree, a clean-energy advocate at the National Resources Defense Council, which joined the legislators’ filing. “We really need a proposal that grapples with this reality — even though it’s difficult.”

Lang-Ree said cut-offs would be rare, and would likely only occur when the grid is most overburdened, such as during extremely hot or cold weather. But for ratepayers, the protection could be significant.

“In practice, this may only occur less than one-tenth of 1% of the time, but this action will shield the public from blackout risk and save hundreds of billions of dollars,” Lang-Ree said.

The various plans will be presented Wednesday during a meeting of the PJM Special Members Committee, which will rank the options. The final decision rests with PJM’s 10-member Board of Managers, which has pledged to issue a ruling before the end of this year. The board doesn’t have to select any one proposal, but rather could combine elements from several.

Ultimately, any changes to PJM’s procedures will require approval from the Federal Energy Regulatory Commission.

In a statement Monday, PJM spokesman Jeff Shields called the data center projections a “generational challenge,” adding that the grid operator has received a dozen different proposals for how to deal with the matter.

“Data center proliferation is driving the need to further build out our power grid, while also creating a supply/demand imbalance leading to higher market pricing,” Shields wrote. “As grid operator, PJM is acutely aware of the challenges that these costs pose to people and businesses.”

But legislators said PJM can’t ignore that it is partly to blame for the supply and demand problems with its grid.

“We also need to look back clear-eyed, understanding that a big part of how we ended up here is the past failure of the PJM queue, with its six-plus year wait-time, to connect renewable energy to the grid,”said Delaware General Assembly Sen. Stephanie Hansen (D-10th District).

PJM argues that it has worked to diminish the backlog in its queue, and reform approval procedures that come from a time when a smaller number of large power plants needed to connect to the grid, unlike today’s far higher number of smaller projects, including wind, solar and battery storage facilities scattered around the region. PJM has also created a fast-track for dozens of shovel-ready energy projects.

The idea of interrupting power to data centers was also backed by a group of 60 climate and ratepayer advocacy groups from around PJM territory, in a letter to PJM’s voting members. In Maryland, that includes the Chesapeake Climate Action Network, the Maryland League of Conservation Voters and Third Act Maryland.

Those groups said that incentives that encourage data centers to bring power are not enough.

“You must vote for a solution that — at minimum — does not allow large-load users like data centers to have access to the grid during hours of peak demand until they have brought new generation onto the grid to match their energy usage,” the letter said.

Exelon wants to build a power plant in Maryland, reversing decades of deregulation policy

The Maryland Office of People’s Counsel, which represents Maryland ratepayers, also backed the idea of interruptible, rather than firm, energy service for data centers that do not bring their own power resources to the grid. It called on PJM to “initiate a process to require data centers to pay the regional and local transmission costs that they cause,” costs that are currently paid by the overall customer base through their monthly electric bills.

The People’s Counsel also identified ways to improve forecasting to ensure data center demand isn’t artificially inflated by proposals that aren’t going to break ground, an idea backed by the legislators’ coalition.

PJM’s Independent Market Monitor called on the regional grid operator to be even more strict, and bar data centers from connecting to the grid if they cannot be served reliably by the system. To do that, PJM would have to create a queue for data centers to apply, and evaluate each proposal to ensure the electric grid can handle it.

“It should not be assumed that PJM is required to allow the interconnection of large loads that cannot be served reliably,” read the market monitor filing. “The result of such a path would be an unreliable system that imposes costs on all the other PJM customers.”

Hester on Monday called the legislators’ plan something of a “logical hybrid between the two” proposals — the governors’, which would merely provide incentives, and that of the independent market monitor.

“They [data centers] can join, if they bring their own supply,” Hester said. “And if not, then they agree to the non-firm capacity market.”

The lawmakers highlighted the fact that their coalition includes lawmakers from seven PJM states and Washington, D.C., mostly Democrats but with a small number of GOP representatives, too.

“It’s just not very often the leaders from a broad number of states like this, in a bipartisan manner, come together in a shared fight,” said D.C. Councilmember Charles Allen. “But it really highlights what’s at stake in the millions and millions of people and businesses that will be harmed if things just keep going as they have been.”

Maryland Matters is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: editor@marylandmatters.org.