Executive Summary: PJM Rewrites the Rules for Data Center Power Access
Data center energy demand in the PJM region is growing at a pace the grid cannot currently support. In 2025, PJM launched the Critical Issue Fast Path (CIFP) to solve major issues in large load additions, interconnection delays, and capacity market distortions.
Twelve proposals were submitted — yet none reached approval, pushing PJM toward a CIFP Phase II where interim policies are likely.
For data center executives, the message is unmistakable:
Future data center interconnections in PJM have a very high probability of having some form of Bring Your Own Generation (BYOG) approach, demonstration of stronger contractual commitments to move forward in the interconnection process, and proactive integration with ISO-level energy strategies.
Key Takeaways for Data Center Executives
- PJM stakeholders did not approve any reform proposal, delaying structural fixes to the interconnection queue.
- BYOG (Bring Your Own Generation) appears to be one method of accelerating new data center load power capacity.
- Instead of a first come, first serve, PJM is considering prioritizing entities that show advanced commitment such as Construction Commitment Contracts or Electric Service Obligations— with the intent of eliminating redundant or speculative megawatts from planning.
- Changes will need to be tracked in a timely manner to adjust strategies with capital and timing impact.
Detailed Analysis: What’s Happening Inside PJM and Why It Matters
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Why PJM Launched the Critical Issue Fast Path (CIFP)
Massive growth in data center electricity demand — AI, cloud, computing, and hyperscale expansion — has overwhelmed PJM’s ability to process large-load interconnection requests. Developers are facing:
- 2–3+ year delays
- Unpredictable upgrade costs
- Unclear timelines for transmission availability
- Capacity market instability
CIFP was intended to deliver an interim, stakeholder-approved solution to address the problems of load forecasting and to expedite large load interconnections by December 2025. It failed to do so.
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Overview of the Two Dominant Proposals
PJM’s Proposal — Encourages entities with firm generation commitments to be prioritized and also provides for stricter load forecasting.
Core components:
- Stricter Load Forecasting for Data Center Growth
PJM would only count megawatts backed by some form of Construction Commitments (CC) or Electric Service Obligations (ESO).
Why this matters:
- Improves transparency and predictability
- Prevents speculative projects from inflating capacity prices
- Forces developers to firm up commitments earlier
- Updated Price Responsive Demand (PRD)
Moves PRD bidding toward energy-based pricing for more accurate capacity auction outcomes.
- Expedited Interconnection Path for BYOG
Projects paired with new generation (solar, storage, gas, hybrids) can be evaluated as quasi-standalone, bypassing congested queue clusters.
For data centers:
This is the fastest path to power supply in PJM.
- Stricter Load Forecasting for Data Center Growth
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IMM Position — Prioritizing Reliability and Cost Equity
The Independent Market Monitor argued that PJM’s role is to provide a safe, reliable, and fair system and is not obligated to grant interconnections to every large load — especially data centers — if it threatens system reliability.
Key IMM positions:
- Existing ratepayers should not subsidize transmission upgrades for data center growth.
- BYOG is essential to protect fairness and stabilize costs.
- Data centers must assume responsibility for their own system impacts.
This signals a new era where data center growth must be self-supported rather than grid subsidized.
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Other Proposals: State-Led and Hybrid Approaches
A coalition including states, the Data Center Coalition, Exelon, and PPL proposed:
- A state-managed voluntary BYOG program
- Capacity price collars
- Enhanced demand response options
Promising, but currently insufficiently aligned to gain approval.
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Outcome: No Proposal Passed — Phase II Expected
With no proposal advancing to FERC, PJM is expected to launch:
- CIFP Phase II
- Interim stop-gap measures
- New temporary rules for handling large load additions
For data centers, timelines and rules remain fluid, making proactive strategy more critical than ever.
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Implications for Data Centers
- BYOG may turn out to be the most practical and efficient way to handle large load interconnections in the short term.
Data centers that bring new generation with them may potentially have:- Faster interconnection review
- Lower queue congestion exposure
- More predictable upgrade costs
- Greater negotiation leverage with utilities
- Site Selection Must Include Hosting Capacity and Queue Analytics
Traditional site selection criteria (land, fiber, water) are no longer enough.
Decision makers must integrate:- Local transmission headroom
- Queue cluster congestion
- Utility readiness
- Available brownfield generation
- Proximity to substations with available fault current
- Higher Capital Costs for Transmission Upgrades
IMM’s fairness stance is a warning:
Transmission upgrades driven by data center growth may no longer be socialized across ratepayers. - Contractual Certainty is Now a Competitive Advantage
Projects without CCs or ESOs will not be considered valid and therefore will result in removing the load from PJM’s forecasting and pushing the project to the back of the line.
- Expect Slower Grid-Level Timelines
Until Phase II reforms land, developers should plan for:
- Continued Long queue study windows
- Higher certainty requirements
- Greater variability by PJM Zone
This environment rewards teams with ISO-level expertise.
Strategic Recommendations for Data Center Leaders
- Start BYOG Feasibility and Engineering Immediately
Assess:- On-site generation (gas, hybrid, BESS)
- Off-site PPAs
- Utility-scale solar or wind paired with storage
- Merchant generation alignment
- Secure CC or ESO Commitments Early
Ensure PJM counts your megawatts in the long-term load forecast.
- Integrate ISO-Level Intelligence into Site Selection
Partner with firms that can assist you with ISO and Utility feasibility studies:
- Queue impacts
- Transmission constraints
- Upgrade cost exposure
- Local reliability risk
- Build a Multi-Layered Energy Procurement Strategy
Combine:- Wholesale ISO procurement
- Behind-the-meter resilience
- Long-term PPAs
- Capacity hedging
- Renewable energy credits
- Move Quickly
Early movers capture the limited number of locations with favorable interconnection conditions.
Conclusion: The New Reality for Data Center Power in PJM
PJM’s CIFP process confirms a fundamental shift:
Data centers cannot rely on legacy interconnection frameworks. Future growth requires early commitment, private generation, and ISO-level strategy.
BYOG — once optional — now appears the clearest pathway to reliable, affordable, and timely power in the PJM region.
Data centers that prepare now will secure capacity, control costs, and outpace competitors in the most supply-constrained energy market in U.S. history.
About Marguerite (“Margie”) Miller
Marguerite Miller is Vice President of Procurement Operations at ECM, energy management services. With more than two decades of experience working directly with ISOs and utilities, she has led large-load interconnection projects across NYISO, PJM, and ISO-NE. Margie is known for bridging the gap between highly technical grid requirements and the practical needs of Fortune 500-scale energy consumers, ensuring projects are delivered on time and on budget. Margie served on the PJM Finance Committee for over a decade from 2010 thru 2021and is presently working on the Critical Issue Fast Path for Large Load Additions. She is also active in the committees of the NYISO, MISO and NE-ISO.
About ECM
ECM is an energy management services firm with a 20+ year track record of success in wholesale ISO-direct power procurement, renewable integration, demand response, and energy optimization. Serving data centers, healthcare systems, financial institutions, REITs, and other Fortune 500 enterprises, ECM helps clients secure reliable power, reduce costs, and achieve sustainability goals.