There are a number of states in the PJM Interconnection (formerly the Pennsylvania-New Jersey-Maryland Interconnection), and the politicians in each one are looking for something different from their power supplies. Some want more renewable energy, some want to keep AI datacenters out so extra demand for electricity doesn’t raise costs, and some want to bring AI datacenters in to create jobs. The politics of energy distribution has become riskier than energy capacity, which is why creating off-grid energy is crucial. Katherine Blunt and Jennifer Hiller of The Wall Street Journal report:
In September, PJM released proposals meant to balance data-center needs with those of other customers, including one that would cut power to data centers during times of extreme strain on the grid. That one included possible exceptions for data centers that either arrange for their own power supplies or volunteer to participate in demand response.
Amazon, Google, Microsoft and others said parts of that proposal discriminated against data centers. They opposed almost every facet of it, expressing concern about the prospect of being cut off from the grid, the cost of building power plants and the feasibility of powering down.
Tech companies put forward counterproposals that would make building power plants or going offline strictly voluntary for data centers within PJM.
In November, efforts to establish new rules for data centers stalled when PJM executives, tech companies, power suppliers, utilities and the independent monitor that oversees the market couldn’t agree on a plan. PJM’s board of managers is now working to propose one.
The market monitor, Joseph Bowring, has urged federal regulators to intervene. In a complaint filed with the Federal Energy Regulatory Commission, the monitor said PJM should stop admitting new data centers to the grid unless there are enough power plants and transmission lines to serve them.
Bowring’s firm, Monitoring Analytics, has been sounding the same warning for months.
Unless data centers bring their own power supply, the firm said in a letter to the grid operator in November, “PJM will be in the position of allocating blackouts rather than ensuring reliability.”
Action Line: It’s imperative for major new power consumers like AI datacenters to ensure their own energy supplies by building off-grid generation capacity. That’s where the nuclear renaissance, massive investment in gas turbines, and potentially even a coal renaissance come in. Click here to subscribe to my free monthly Survive & Thrive letter.
