The Department of Energy issued two emergency orders permitting grid operator PJM Interconnection to curtail data center load and waive certain power plant pollution limits during a severe heat wave that pushed regional electricity demand toward an all-time record of 166,147 megawatts.
The orders mark a shift in how large flexible loads are treated during system emergencies. Data centers have historically been served as firm load, and the authority to curtail them places AI and cloud facilities in a category previously reserved for interruptible industrial customers.
Demand growth explains the pressure. United States data center electricity demand rose from 23 gigawatts in 2023 to 42 gigawatts in 2026. Worldwide data center power demand is forecast to increase 27 percent during 2026 to reach 132 gigawatts, up from 104 gigawatts in 2025. Rack level density has changed alongside the totals, with AI racks drawing 50 to 100 kilowatts against 5 to 10 kilowatts for conventional server racks.
Cost allocation has become the central regulatory fight. PJM capacity prices climbed 833 percent between the 2024 to 2025 and 2025 to 2026 delivery years. The Federal Energy Regulatory Commission issued show cause orders to the six largest United States grid operators, directing them to defend or rewrite interconnection rules governing gigawatt-scale load requests.
Operators have responded by building generation on site. More than 7.5 gigawatts of data center projects with on-site generation are under construction, with over 60 gigawatts in pre-construction, driven partly by interconnection queues running five to seven years.
Source: Utility Dive - https://www.utilitydive.com/news/ai-data-center-growth-utilities-generation-plans/825541/