Pallone Urges FERC to Protect PJM Customers with Stronger Data Center Rules

WASHINGTON, D.C. - Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) wrote to the Federal Energy Regulatory Commission (FERC) today urging the Commission to use its authority to approve and strengthen recent proposals put forth by PJM surrounding its handling of data centers.

"Americans are deeply frustrated and concerned that the rapid and unceasing development of data centers is driving up their monthly energy bills. At the end of the day, protecting Americans' power bills is FERC's responsibility," Pallone wrote in his letter to FERC Chairman Laura Swett. "While I support many of the provisions included in the proposals, I am concerned that they do not go far enough and believe [FERC] should use its authority to improve PJM's proposals to protect families across the mid-Atlantic region."

Pallone explained that data centers are responsible for an increase in PJM capacity market costs of nearly $30 billion since the summer of 2024. Meanwhile, demand for electricity over the next decade is expected to explode, with PJM forecasting a roughly four percent increase in peak demand each year driven almost entirely by data centers.

PJM is therefore suggesting it implement three reforms: requiring data centers to pay for new power plants to make PJM's grid reliable, requiring data centers to bring their own new generation capacity online, and creating a registry of data centers within PJM's boundaries.

Pallone writes that while he supports these goals, FERC should impose the following improvements to strengthen them:

• Ensure that data centers are responsible for all the costs they cause, not just for new power plants designed to shore up reliability;
• Make the requirement for data centers to bring their own new generation capacity online permanent; and
• Make the proposed data center registry public so that every American has access to the information they need to protect and empower their communities.

"Last year, my constituents saw an outrageous 20 percent increase in their power bills, fueled by skyrocketing prices in PJM's capacity market. Over 90 percent of the increased demand PJM expects to see on its system by the end of the decade is from data centers," Pallone continued. "If FERC gets this right, then it will have granted American families a measure of protection from the costs imposed by data centers. If the Commission falls short, then American families will pay the price."

Pallone has publicly and repeatedly called for substantial federal guardrails to protect communities against data centers' impact on their air, water, power grid, and monthly utility bills. If Congress fails to adopt strong guardrails, he has said a federal moratorium on data centers should be put in place.

While the guardrails proposed by PJM are not sufficient to fully protect consumers, Pallone writes that they represent important progress, and FERC should incorporate the critical improvements highlighted in his letter and approve them.

The full letter is available HERE.