Energy

PJM Overrules Its Own Two-Thirds Vote

PJM's board filed a mandatory curtailment plan for data centers on July 27, 2026, five weeks after two-thirds of stakeholders voted for a voluntary-only backstop instead. The new rule takes effect June 1, 2027.

EnergyBy Servola Tech Desk2026-08-145 min read

AI-assisted, edited by humans. | Editor-in-Chief: Leon Soliman | Editorial standards

Key takeaways

On July 27, 2026, PJM Board of Managers Chair Paula Conboy sent stakeholders a decisional letter stating that although a Coalition Reliability Backstop Procurement proposal had won support from more than two-thirds of sector-weighted PJM members in a June 30, 2026 vote, the Board concluded a voluntary-only subscription framework "would not provide sufficient assurance" of new capacity, and directed PJM staff to file for a mandatory curtailment mechanism the stakeholder majority had just rejected.
The new mechanism, Interim Resource Adequacy Service (IRAS, formerly called Connect and Manage), requires any new Large Load of 50 megawatts or more at one site that has not registered Bring Your Own New Capacity (BYONC), a cleared and in-service supply contract, by June 1, 2027 to accept automatic load reduction ahead of every other PJM emergency action, including Pre-Emergency Load Management, according to PJM's July 27 executive summary filed with the Federal Energy Regulatory Commission.
PJM's filing answers a June 18, 2026 FERC order that gave the nation's largest regional transmission organizations 60 days to justify or rewrite their large-load interconnection tariffs and 30 days to submit a mandatory reliability report, after NERC warned regulators that data-center load can swing by hundreds of megawatts within seconds, faster than any operator can respond in real time.
PJM's own numbers explain the urgency: the grid operator's last two Base Residual Auctions cleared below its Reliability Requirement, roughly 15 gigawatts of generation have retired in its footprint since 2022, and new Large Load demand is projected to grow by up to 70 gigawatts by 2038, a shortfall PJM's board says it must address within its own control regardless of what a voluntary stakeholder vote preferred.
Signing a BYONC contract does not end a data center's exposure: PJM's design documents show the contracted capacity must actually clear a PJM auction and enter service, and if that supply is delayed past its expected date, the load reverts to Interim Resource Adequacy Service curtailment from June 1, 2027 until the plant, storage system or demand-response resource is actually running.

A Two-Thirds Vote, Overruled in Five Weeks

On June 30, 2026, PJM stakeholders voted on how to fix a widening capacity shortfall building across the mid-Atlantic grid. A coalition-backed Reliability Backstop Procurement plan, built around voluntary subscription, won support from more than two-thirds of PJM's sector-weighted membership, while every proposal on the table to curtail data centers and other large loads during a shortage was voted down.

Five weeks later, on July 27, 2026, PJM Board of Managers Chair Paula Conboy sent stakeholders a different answer. In a decisional letter closing out the same Critical Issue Fast Path process, the Board wrote that it "recognizes" the Coalition proposal's two-thirds support and "several constructive elements," but concluded that "a voluntary subscription framework would not provide sufficient assurance that capacity equal to the identified near-term shortfall would actually be procured." The Board directed PJM staff to file with FERC for a mandatory framework that includes exactly the curtailment tool the stakeholder majority had just rejected.

The reversal was not framed as a rebuke of the vote. Conboy's letter thanks the stakeholder community "for its substantial engagement" and states the Board "carefully considered" every alternative. But procedurally, PJM's governance lets the Board override a supermajority stakeholder vote when it judges reliability is at stake, and on July 27, it did exactly that.

What Interim Resource Adequacy Service Actually Does

The mechanism PJM filed is called Interim Resource Adequacy Service (IRAS), a rebrand of what stakeholders had been calling Connect and Manage. Under PJM's executive summary, any Large Load, defined as 50 megawatts or more of cumulative peak demand at one site, can still interconnect without bringing new generation. But if that load has not registered Bring Your Own New Capacity (BYONC), a cleared and in-service supply contract, by June 1, 2027, it becomes subject to automatic load reduction.

The ordering matters. PJM's own emergency-procedures diagram places the new IRAS action as the first lever the system pulls, ahead of Pre-Emergency Load Management Reductions, ahead of curtailing non-essential building load, ahead of every step PJM currently uses to protect residential and commercial customers during a shortage. A data center without a BYONC contract is now first in line, not last.

PJM is not asking large loads to absorb the cost for free. Electric Distributors must implement a FERC-approved compensation rate for reduced load, set at 50 percent of the existing Non-Performance Assessment Interval rate that FERC approved on June 26, 2026. Existing Large Loads already running before June 1, 2027 get until March 1, 2027 to register; anyone building new capacity faces annual BYONC filing deadlines of April 1 and verification by April 15.

The FERC Order PJM Is Actually Answering

PJM's filing did not happen in a vacuum. On June 18, 2026, FERC issued show cause orders to the country's jurisdictional regional transmission organizations, demanding each explain within 60 days why its existing large-load interconnection tariffs are just and reasonable, or rewrite them, and submit a mandatory reliability report within 30 days on how it will secure enough generation for growing large loads.

FERC's orders defined large loads the same way PJM ultimately did: 50 megawatts of peak demand interconnecting above 69 kilovolts. The Commission's underlying concern, drawn from NERC reliability reports, is that data centers and similar computational loads can swing their consumption by hundreds of megawatts within seconds, a speed that leaves grid operators with essentially no time to respond in real time.

PJM is now the most concrete public answer to that order among the RTOs it targeted. Where other grid operators are still drafting responses, PJM has already sent FERC a specific registry design, a specific curtailment trigger date and a specific compensation formula, a level of detail that puts pressure on peers like MISO and SPP to match it or explain why they have not.

Why the Reliability Math Forced the Board's Hand

The Board's letter is explicit about what changed its calculus. PJM has now cleared two consecutive Base Residual Auctions below its own Reliability Requirement, roughly 15 gigawatts of generation have retired from its footprint since 2022, and the grid operator's own projections put new Large Load demand growth at up to 70 gigawatts by 2038, a shortfall large enough that reporting on PJM's most recent capacity auction results put the identified gap at roughly 6.8 gigawatts, procured at a record cost of about 16.4 billion dollars.

Set against that math, a voluntary-only backstop looked to the Board like a bet the region could not afford to lose. The Board's letter states plainly that new Large Loads which do not bring or contract for their own new supply should not be allowed to impair the reliability of existing customers, language that reads less like a stakeholder compromise and more like a board setting a floor under its own authority.

For any operator planning a data center in PJM territory, the practical reading is straightforward: June 1, 2027 is now a real deadline, not a negotiating position, and the safest capacity commitment is one that has already cleared a PJM auction rather than one still working through a bilateral term sheet.

Frequently asked questions

What counts as a Large Load under PJM's new rule?

PJM defines a Large Load as end-use customer demand of 50 megawatts or more of cumulative peak load at a single site, measured across all delivery points within a one-mile radius, according to PJM's July 27, 2026 executive summary filed with FERC.

Does Interim Resource Adequacy Service affect data centers already under construction?

Yes. Any Large Load megawatt not already in service by June 1, 2027 counts as new under PJM's registry rules, and existing loads already running before that date must still register with PJM by March 1, 2027, so both new and existing large data-center customers fall inside the framework.

How is this different from PJM's ordinary emergency load-shedding?

PJM's own emergency-procedures diagram places the new Interim Resource Adequacy Service action ahead of Pre-Emergency Load Management Reductions, meaning large loads without their own contracted capacity are curtailed before PJM applies any of the emergency steps it currently uses to protect other customers.

What happens if a data center signs a power contract but the plant is delayed?

PJM's design documents state that if the contracted Bring Your Own New Capacity supply is delayed past its expected in-service date, the associated Large Load reverts to Interim Resource Adequacy Service curtailment starting June 1, 2027 until the plant, storage system or demand-response resource actually begins operating.

PJM's board just answered a question its own stakeholders had not wanted to answer: when the grid runs short, whose megawatts go first. A two-thirds vote said newcomers should be protected by a backstop everyone pays into. The Board said newcomers without their own contracted supply go first, ahead of everyone else PJM currently protects. For any company building a data center on a PJM interconnection queue slot, the message is no longer about interconnection speed. It is about whether the capacity contract in hand would actually clear a PJM auction, because if it would not, June 1, 2027 is the date that load stops being treated like everyone else's.

PJMFERCInterim Resource Adequacy ServiceBYONCdata centersgrid reliabilityPaula Conboy

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