Watchdog for electric grid in Ohio, other states wants a pause on data centers
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There are more than 200 data centers in Ohio already, and American Electric Power has claimed 30 gigawatts-worth of proposed data center projects want to connect to the grid.
This story was originally published by the Ohio Capital Journal.
An oversight group for Ohio’s electric grid operator, PJM Interconnection, is asking federal officials to weigh in on the future of data centers. Monitoring Analytics, PJM’s independent market monitor, contends reliability should be PJM’s priority. But recent proposals contemplate bringing data centers online despite the possibility of periodic blackouts.
Monitoring Analytics wants the Federal Energy Regulatory Commission to clarify that PJM can, and should, halt data center interconnection if it doesn’t have adequate power.
Ohio Background
There are more than 200 data centers in Ohio already, and American Electric Power has claimed 30 gigawatts-worth of proposed data center projects want to connect to the grid.
For context, peak load for the entire state of Ohio was 9.4 gigawatts in 2023.
To manage that demand, AEP instituted a moratorium on new data centers and lobbied state regulators for a new data center-specific tariff with minimum purchase requirements and exit fees if a facility folds.
Ohio regulators approved the pricing plan, over the objection of The Ohio Manufacturers’ Association and others.
The group is currently challenging the tariff in the Ohio Supreme Court.
The Ohio Manufacturers’ Association contends AEP didn’t have the right to declare a moratorium in the first place, and that it hasn’t backed up its claims about prospective demand.
In September, after regulators approved the tariff, AEP cut its forecasts from 30 gigawatts to 13.
A recent study funded by the Ohio Chamber Foundation indicated companies like Amazon, Google, Meta and others have committed more than $40 billion in Ohio projects over the next decade.
The chamber’s analysis suggests data centers will need 7.6 gigawatts of additional power by 2030 and quoted a study by the Ohio Business Roundtable projecting demand to grow to 15 gigawatts by 2034.
Market Monitor’s Complaint
As an independent market monitor, Monitoring Analytics operates as a kind of ombudsman for PJM Interconnection.
The company reviews PJM’s procedures, rules, and structure to ensure its energy market is operating competitively.
In November, Monitoring Analytics joined several other stakeholders to try to agree on new rules governing data centers.
They voted on a dozen ideas but couldn’t reach consensus.
Following the meeting, PJM spokesman Jeffrey Shields issued a statement explaining “PJM opened this conversation about the integration of large loads and greatly appreciates our stakeholders for their contributions to this effort. The stakeholder process produced many thoughtful proposals, some of which were introduced late in the process and require additional development.”
Shields stressed the vote was always advisory in nature and said the PJM board still plans to act on data centers in the next few weeks.
The Federal Energy Regulatory Commission will have to sign off on whatever they propose.
The independent monitor left the meeting concerned that PJM and other stakeholders are working from a false premise.
“The solutions offered by PJM and most stakeholders simply assume that PJM must agree to add large loads to the system when the loads cannot be served reliably,” Monitoring Analytics’ FERC complaint states.
In short, the organization contends PJM has the authority to make data centers wait. And if PJM’s central obligation is reliability, then those data centers should wait.
Monitoring Analytics noted many of the unsuccessful proposals stakeholders considered included “mandatory curtailments” — blackouts — for new loads.
The fact that those considerations are included, the group argued, underscores the point that PJM doesn’t have adequate capacity for proposed data centers.
“The logic is simple. The question is clear,” Monitoring Analytics wrote. “If PJM has an obligation to provide reliable service to all PJM loads, is it just and reasonable for PJM to add new loads that it cannot serve reliably?”
“The answer to that question is no.” it added.
The independent monitor is asking federal regulators to issue a ruling directing PJM to add new data centers only when it has the infrastructure in place to serve those new customers as well as its existing ones.
PJM declined to comment on the independent monitor’s complaint.
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