Facing skyrocketing demand, the nation’s largest grid operator plans to require new data centers to provide their own power or have their service cut when the grid is strained.

PJM Interconnection, whose service area encompasses Washington, D.C., and 13 states in the mid-Atlantic and Midwest, has been scrambling to contend with an unprecedented, data center-driven wave of electricity demand that has threatened the grid’s stability and raised customer utility bills. Now, the grid operator is asking federal regulators to approve a new framework governing how data centers connect to the grid and acquire power.

Under the proposal, submitted Friday to the Federal Energy Regulatory Commission, newly built data centers that don’t add capacity to the grid will have their power supply curtailed when the grid approaches dangerously low levels compared to demand.

The pending Interim Resource Adequacy Service framework would require utilities to reduce power to data centers before any action that could disrupt service for residential and commercial customers. It would also bar these new data centers from participation in a critical power auction that has been responsible for driving up utility bills throughout the PJM system.

PJM also plans to create a large-load registry to track all data centers and their actual power consumption, providing regulators and utilities with the information needed to enforce the new rules.

The proposal comes as PJM has warned of reliability threats due to surging data center demand exceeding the system’s capacity. Of the 32 gigawatts of new demand the grid operator predicted it would face between 2024 and 2030, 30 GW are expected to come from data centers, PJM wrote in its filing.

PJM has had several close calls, including a near regional blackout when multiple data centers simultaneously disconnected from the grid. Data centers are also driving up electricity costs for consumers, with the price of power set to jump more than 60% in PJM's service area.

“The unprecedented addition of large loads, most notably data centers, has given rise to resource adequacy shortfalls – and associated real-time operational issues that IRAS is intended to address,” PJM wrote in its FERC filing.

While PJM’s proposal may not solve the existing reliability and cost issues data centers are creating, they are a critical intervention to ensuring those problems don’t get worse, according to Tom Rutigliano, senior advocate for climate and energy at the Natural Resources Defense Council.

“It’s a great first step. It stabilizes the situation,” Rutigliano said. “It says to new data centers that they need to bring their own power. They can't just endlessly be relying on everyone else to build power plants for them.”

NRDC’s primary concerns with PJM’s new data center framework center around exactly what kind of new power capacity developers would bring, Rutigliano said: low-carbon renewables and energy storage or fossil fuel generation from natural gas and diesel?

Rutigliano said he anticipates the new rules, if adopted, would be a net benefit from an emissions and sustainability perspective. Many developers would turn to battery storage, which can be deployed years faster than gas turbines — a critical advantage in a sector where speed to market is a top priority.

Still, if FERC approves PJM’s plan, it will be up to individual states to enforce environmental rules governing new power generation. There is a risk that, if given a chance, developers will rush to use diesel generators, which may be the path of least resistance in terms of speed to market but are among the worst options in terms of emissions, according to Rutigliano. Regulators need to be vigilant about creating clear guidelines for an industry that is “very willing to push the envelope,” he said.

“It's going to be up to states to keep enforcing their air-quality rules to make sure that data centers can't just do an end run around this by planning on running diesel generators hundreds of hours a year,” Rutigliano said. “No one should take this as free license to run unpermitted backup generators. It's not a diesel party. That's not what it should be.”