Data Centers Seek City-Sized Power, US Grid at Crossroads
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- The AI power boom is forcing a once-in-a-generation decision about how America's electricity system should grow, upending decades of utility planning that was built around predictable demand increases.
- Data centers are now seeking amounts of electricity once associated with entire cities, raising questions about who pays for new infrastructure, who gets access to scarce power, and how quickly projects can connect to the grid.
- PJM, the nation's largest grid operator, and the Federal Energy Regulatory Commission (FERC) are at the center of debates over how to accommodate massive new electricity users.
- Some proposals under consideration would let data centers connect directly to power plants or generate their own power on-site, at least initially operating outside the broader electricity grid.
- FERC is expected to issue a key decision on large-load interconnection as soon as this month, with outcomes that will influence electricity prices, reliability, and the pace of AI development.
- The fundamental fork: whether the AI boom accelerates a historic expansion of the shared electric grid or spawns a parallel power system alongside it.
Why it matters: A FERC decision expected this month could lock in whether hyperscale data centers integrate into the shared grid—where other ratepayers absorb infrastructure costs—or build a parallel system around it, with electricity prices, reliability, and AI's buildout speed all in the balance. PJM's footprint makes it the most consequential early test.
