In light of that constraint, this workaround may well be PJM’s “only defensible and sustainable way” to insulate customers from further utility bill spikes driven by its beleaguered energy capacity market, he said.
In a second proposal to FERC, PJM has also laid out a plan for how utilities can help data centers avoid curtailment by securing enough capacity resources in a new emergency “reliability backstop procurement” auction.
As recently as three weeks ago, it appeared this might be PJM’s primary approach to deal with the data center problem. A plan from utilities and the trade group Data Center Coalition was the sole proposal, out of dozens, to win a two-thirds vote from PJM stakeholders in June. That proposal would have potentially forced large loads to pay for the capacity they need.
But PJM’s board of directors didn’t use that exact plan. Instead, the board proposed a limited emergency auction to backfill the 6.8 GW shortfall in its last capacity auction. That may bring in enough new capacity for utilities to cover the power needs of proposed data centers, though it won’t force those data centers to pay for it.
That decision may also be based on PJM’s anticipation of legal challenges to stepping on state authority, said Jon Gordon, a director at clean energy trade group Advanced Energy United. “PJM stakeholders wanted PJM to take more responsibility for this,” he said, “but PJM decided they didn’t want to get into a jurisdictional fight.”
