PJM's Board Keeps Data Centers in the Capacity Market but First in Line for Curtailment
PJM's Board of Managers has decided how the grid will handle the data centers it cannot yet supply. In a decisional letter dated January 16, closing the Critical Issue Fast Path process on large load additions, the Board set out a package that keeps new large loads inside the capacity market, encourages them to bring their own new generation, and makes those that do not subject to curtailment before pre-emergency demand response when the system is short.
It also directed PJM staff to start a reliability backstop procurement immediately. The 2027/2028 Base Residual Auction, held in December, cleared short of the reliability requirement for the first time in PJM's history, 5.6% below the target reserve margin. The fast path began last summer with a PJM staff concept that went further. In an August 2025 presentation, PJM proposed a new Non-Capacity-Backed Load service for new large loads. The Board's decision keeps the curtailment priority but drops the idea of taking new load out of the capacity market.
Third, the Board encourages voluntary Bring Your Own New Generation, under which load-serving entities, large loads and states offset load additions with new generation measured on an effective load carrying capability basis. The Board also ordered a holistic review in 2026 of investment incentives in PJM's markets, and sought feedback on a price collar for the 2028/2029 and 2029/2030 auctions. The Board said it is not taking action to restrict interconnection of new load, whether through a dedicated load queue or other limiting measures, and that it does not support approaches that seek to limit or eliminate data center growth.
The Board said a framework proposed during the process by a coalition of Constellation, Talen, CPower, Google, Amazon and Microsoft warrants further consideration. For data center developers in PJM, the decision sets a clear trade. For existing customers, the decision prevents an explicit cost shift but does not lower prices.