PJM’s large load experiment

PJM – the country’s largest regional transmission organization by population – recently filed plans for two big steps on large load integration. As covered by Maeve Allsup in Latitude, the plan is two-part. First, PJM will try to procure enough new generation to cover the gap left at its latest capacity auction (where PJM procures enough power to ensure a reliability margin to cover unexpected peaks or outages) through a generator-load matchmaking process and an auction for the remaining shortfall. Second, PJM will require data centers that don’t bring or purchase their own supply to accept “curtailment” requirements – essentially, cutting the power they draw from the grid during emergency conditions.

PJM sidestepped the limits of its own authority (and the political fallout) by delegating – states and utilities will be responsible for implementing and enforcing curtailment, as well as the final cost allocation for generation capacity procured through the auction.

This is explicitly not a long-term solution – first of all, the capacity procurement is targeting a single year’s 7 GW capacity auction gap, a fraction of the 50-60 GW shortfall PJM itself expects over the next decade (others have widely varying projections here). Second, “matchmaking” pairs generators with the wealthiest suitors (probably the data centers), crowding out access for other types of new load. A long-term version of this type of program could undercut the viability of the capacity market itself, making it harder for cost-sensitive electricity users (like industrial loads) to come online.