67 million Americans' power bills just got pulled into the fight over who pays for data centers

PJM Interconnection, the country's largest power-grid operator, sent FERC a multipart plan last week that does not solve the political fight over who pays for data-center electricity. It hands the fight to the 13 states it serves.

PJM says it operates the grid that moves power across 13 states from Virginia to Illinois for about 67 million people. The plan it filed with the Federal Energy Regulatory Commission would create a new tariff called the Interim Resource Adequacy Service. Under the tariff, any new large data center connecting to the grid would have to bring its own power supply, mostly through long-term contracts with generators, or accept being cut off first during grid emergencies. Other customers would not subsidize that demand.

PJM is doing this because it legally cannot do anything else. The operator runs the high-voltage transmission system; states, not PJM, control which retail customers interconnect to state-regulated utility grids. That structural limit is what turns the FERC filing into a request for the states to act. Aurora Energy Research analyst Julia Hoos called the posture a "definitive request to the states to accomplish what it needs," a shift from PJM's previous deference to state regulatory authority. RMI's explainer on the related CIFP decision reaches the same conclusion: PJM can only do so much under its tariff; the rest lands on the 13 state commissions.

PJM's own forecast puts the data-center demand surge at 30 to 34 gigawatts by the early 2030s, with as much as 70 gigawatts possible by 2038. Thirty-four gigawatts is roughly the output of about 30 large nuclear reactors, the kind of build-out the U.S. has not attempted in a generation. None of that capacity has been ordered, permitted, or built.

The mechanism the plan relies on is curtailment. If a new data center has not secured firm power supply and the grid is short during a winter peak or summer heat wave, that data center gets shed before hospitals, schools, or households. The threat is meant to push developers to sign 10- to 15-year power-purchase agreements with generators before they break ground on a server hall. The economics work because losing a few hours of compute during a rare emergency is cheaper than paying for a dedicated power plant that runs around the clock.

That same threat is also the plan's biggest legal risk. Data-center trade groups warned PJM off a structurally similar "non-capacity-backed load" program in 2025 by signaling likely court challenges. The interim service keeps the same logic under a new name and adds a backstop capacity-auction mechanism that the PJM board approved separately to keep resource adequacy whole if state-level rules fall short. The board's framing is that if states do not act, the auction still has to clear, and the bill lands somewhere. PJM's bet is that "somewhere" is the developers, not the residential customer.

Two of PJM's 13 states are not waiting for FERC. Pennsylvania's Public Utility Commission adopted a Large Load Tariff Framework on April 30, 2026, on a 5-0 vote, with rules that match the same logic: new data centers pay for the grid capacity they trigger, not for spare capacity they might use. On August 5, 2026, the Virginia State Corporation Commission ordered Dominion Energy to develop a tariff that assigns more of the new transmission costs to data centers. Together they cover the two biggest PJM data-center load pockets in the country.

Those two are not isolated. A separate count finds 23 states have already picked a side on who pays for the data-center buildout, mostly by pushing cost onto the developers rather than retail customers. The split has so far been bipartisan: red states and blue states alike have decided the political upside of protecting residential ratepayers outweighs the political cost of slowing data-center permits.

The push to states is also a response to political pressure. State governors and the Trump administration have both told PJM to contain rate increases tied to data centers. FERC is reviewing the broader capacity-market design that produced the price spike that triggered the political response, and PJM's interim tariff is being filed into that same review window.

PJM is asking FERC to approve a federal menu the states can pick from. The 13 commissions do not have to adopt the interim service in identical form. If most do, the cost shift lands where PJM wants it. If several refuse or write weaker rules, the backstop capacity-auction mechanism kicks in and the bill stays on the grid as a whole, which is the outcome PJM says it is trying to avoid.

The next checkpoint is FERC's order on the filing. PJM wants the tariff in place before the next capacity auction runs in 2027. State commissions have their own dockets: Pennsylvania's framework goes to a final rulemaking later this year, Virginia's Dominion tariff is due by a date the SCC has not yet set, and the remaining 11 states have not yet published a coordinated position.