Grid Plan Shifts Capacity Costs to New Data Centers
PJM's amended auction plan, still pending FERC review, aims to close a nearly 7-GW gap for 2028/29.
Updated on Nov. 1, 2026 in Data Centers
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PJM, the grid operator serving much of the eastern United States, sent federal regulators an amended plan for an emergency capacity auction meant to close a nearly 7-GW supply gap for the 2028/29 delivery year. The proposal is at the planning stage and has not yet been run.
Why it matters
The amended plan responds to regulators' concern that data center demand could shift grid costs onto ordinary ratepayers. Because FERC previously rejected part of PJM's approach, the revised design determines how fast new generation capacity can be secured for fast-growing electricity demand.
The filing targets a nearly 7-GW shortfall in capacity for the 2028/29 delivery year. The source does not provide a comparison figure for prior-year capacity or the total cost of the planned auction.
The players
PJM
The regional transmission organization that operates the electricity grid and wholesale capacity market across much of the eastern United States.
Federal Energy Regulatory Commission
The federal agency that regulates interstate electricity transmission and wholesale power markets and reviews grid operators' market rules.
The details
PJM runs the capacity market that pays power providers to keep enough generation available for future peak demand. Under the amended plan, PJM will allocate auction costs using its most recent load forecasts, so facilities that add demand later are assigned a share that reflects their newer electricity use. This design is intended to prevent older customers from absorbing costs created by new large loads such as data centers. FERC had earlier rejected a separate PJM proposal to curtail large loads that lacked new capacity commitments.
Timeline
Late February 2027: start of the auction, delayed by FERC from its original schedule.
March 2027: PJM's target for kicking off the amended auction.
October 29, 2026: PJM sent FERC its amended plan.
The Tech Race
PJM's amended proposal is a regulatory response to the rapid growth of data center electricity demand rather than a new generation technology. It follows FERC's earlier decision that rejected PJM's curtailment approach, so the competitive question is how quickly grid operators can align capacity procurement with large new loads.
Ratepayers could see the cost of new capacity allocated based on the newest load forecasts, which the amended plan is designed to make fairer. The source does not state the expected effect on individual electricity bills or when any change would appear.
The takeaway
Watch whether FERC approves the amended cost-allocation design before PJM's targeted March 2027 auction kickoff. That decision will show whether grid operators can tie capacity costs to new data center demand without shifting them onto existing customers.
What happens next
PJM aims to kick off the amended emergency capacity auction in March 2027, subject to FERC's review of the revised plan.
Further reading
For more on how facilities like these strain regional supply, see Data Centers coverage.
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