PJM Interconnection, serving over 65 million customers across 369,000 square miles, confronts mounting pressure over its data center interconnection policies following a federal complaint filed by independent market monitor Monitoring Analytics. The complaint argues that PJM's current approach to approving large data center connections threatens grid reliability by potentially exceeding the system's capacity to serve all customers simultaneously.

The reliability concerns stem from rapid data center growth driving substantial increases in electricity demand and transmission costs. Large data centers have already contributed $16.6 billion in additional capacity revenues through PJM's last two capacity auctions, with costs expected to continue rising. This demand surge particularly affects capacity and energy pricing across PJM's territory, which encompasses major portions of 13 states plus Washington D.C.

PJM's Board of Managers recently held emergency sessions to address data center interconnection issues but failed to reach consensus on appropriate limits. The market monitor's federal complaint seeks regulatory clarity requiring PJM to ensure reliable service for all customers before approving new large load connections. This regulatory intervention could fundamentally change how the grid operator evaluates and approves data center projects.

The timing proves critical as artificial intelligence infrastructure development accelerates under new federal initiatives. The Trump administration's announced $500 billion AI infrastructure investment, combined with industry projections for 100 gigawatts of additional power capacity annually, intensifies pressure on grid operators nationwide. North American reliability assessments already identify data centers as a leading factor in rising winter blackout risks, making PJM's interconnection decisions increasingly consequential for regional energy security.