PJM Moves to Curtail Data Centers: The CRE Read on Firm Power

On July 27, 2026, the PJM Board of Managers issued a Board Decisional Letter closing the Critical Issue Fast Path stakeholder process on Reliability Backstop Procurement and Connect and Manage. Signed by Board Chair Paula Conboy, the letter directs PJM management and staff to proceed with two filings at the Federal Energy Regulatory Commission by the end of July, and it sets out four elements. First, a Large Load Registry that Electric Distributors will be required to populate. Second, a Reliability Backstop Procurement beginning in September 2026, with an initial target equal to the capacity shortfall identified in the 2028/2029 Base Residual Auction, reduced to reflect documented bilateral contracts and self-supply arrangements. Third, an Interim Resource Adequacy Service, previously referred to in the stakeholder process as Connect and Manage, that Electric Distributors must implement for new Large Loads that, as of June 1, 2027, do not bring sufficient capacity to serve their resource adequacy needs and cannot otherwise be served at the 1-in-10 reliability standard. Fourth, a FERC-approved compensation rate for Large Load customers directed to reduce consumption. PJM operates the largest power grid in the United States and says it serves 67 million people.

The letter puts the pressure in numbers. New Large Load demand is projected to increase by approximately 70 gigawatts by 2038, while approximately 15 gigawatts of generation has retired in the PJM footprint since 2022, and PJM has now experienced two successive Base Residual Auctions that cleared significantly below the system’s Reliability Requirement. PJM’s July 14 auction release says the 2028/2029 auction procured 138,318 megawatts at a clearing price of $325 per megawatt-day and fell short of the Reliability Requirement by 6,831 megawatts. Two PJM records disagree on the unit for that figure: the July 14 release says 6,831 MW, while PJM’s own July 27 news post renders the same number as “6,831 GW,” which reads as a unit slip rather than a different number, and the megawatt figure is the physically coherent one. The procurement itself runs September 30 through October 21 with results released in early December, commitments of up to 15 years, a cap of $555 per megawatt-day on the total cost of accepted supply offers, and a requirement that resources come online no later than June 1, 2032. On the demand side, the published proposal defines a Large Load as end-use customer load with a cumulative peak load quantity of at least 50 megawatts at a single site behind one or more delivery points within a one-mile radius. Existing Large Loads in service before June 1, 2027 must register by March 1, 2027.

Read past the acronyms and PJM is proposing something that has not happened to electricity in the modern data center era: it is splitting the commodity into two products. Until now, a large load that cleared interconnection received the same firm service as a hospital or a shopping center. Under the Interim Resource Adequacy Service that stops being automatic. The Board’s own sentence is the one to underline: new Large Loads that wish to receive the same level of firm service as other load will need to bring sufficient new capacity to the system or otherwise take service under the Interim Resource Adequacy Service. Firm service becomes something a developer buys with generation, not something that arrives with the meter. There is a precedent for this, and it is not from the power sector’s recent history. It is interruptible natural gas service, which industrial customers were moved onto through the 1970s and 1980s. Interruptible gas was cheaper, and it hardened into a permanent, structurally inferior class of service that showed up as a line item in industrial leases and credit memos for decades. Once a tenant’s supply can be cut by a third party, that interruption right is an encumbrance on the asset, and everyone downstream of it prices accordingly.

The consequences for a CRE operator are concrete, and the mechanics are sharper than the headline suggests. A data center taking Interim Resource Adequacy Service is an asset carrying a curtailment right held by an entity that is not the landlord, not the tenant, and not the lender. The reduction is a new emergency action that triggers prior to Pre-Emergency Load Management, meaning these loads are cut first, ahead of the demand-response resources that are paid to go first today, and the transmission owner is to initiate and complete the reduction within 10 minutes of instruction. The proposal does allow a curtailed load to switch to on-site backup where permitted, as long as the load is removed from the PJM system, which quietly promotes backup generation from a resilience nicety to a service-level input. Then there is the land read that almost nobody will write. The 50 megawatt threshold is measured at a single site behind delivery points within a one-mile radius, and the incremental rule counts ramps: PJM’s own example is a 30 megawatt load growing to 60 megawatts, where the 30 new megawatts count as new Large Load megawatts. That is an assemblage rule. Splitting a campus across two parcels a half mile apart, or phasing a build to stay under the line, does not make the threshold go away. It also makes the winners identifiable in advance. Developers who locked behind-the-meter generation, self-supply, or a covering capacity contract before the June 1, 2027 date keep firm service and stay out of the registry’s interruptible column. Powered land was already the scarce asset. PJM has now put a date on it.

Treat this as a portfolio exposure question with a filing deadline, not as an energy topic. The inputs are primary and finite: the July 27 Board Decisional Letter, the two Critical Issue Fast Path executive summaries PJM posted alongside it, the FERC docket once the filings land, Large Load Registry data as it becomes public, and then, for every asset in the portfolio, the interconnection agreement, the electric service agreement, the lease’s utility, abatement and casualty provisions, and any behind-the-meter generation or power purchase agreement. An AI assistant reads each record against a fixed question set and returns a cited exposure memo per site: is this a Large Load under the 50 megawatt, one-mile-radius definition, is any planned expansion an incremental new Large Load megawatt, does the site have Bring Your Own New Capacity or an allocated Reliability Backstop Procurement megawatt, what is its registration deadline, and what does the lease actually say happens when the utility curtails.

The output is a table, one row per site, with the source document cited for every cell and an explicit unverified marker wherever the record does not answer the question rather than a smoothed-over guess. The reviewer is the asset management lead working with energy counsel and whoever actually holds the utility relationship. The approval gate is that nothing moves into an underwriting model, a lender package, or a tenant conversation until a human has confirmed each classification against the executed agreement, because the assistant is reading a proposal that has not yet been filed, let alone accepted. The genuinely valuable output here is not a summary of PJM’s plan, which will be everywhere by the weekend. It is knowing, well before March 1, 2027, exactly which of your sites sit on the wrong side of a line that was drawn in July 2026.