What happened
PJM Interconnection, the regional transmission organization that operates the electric grid across the Mid-Atlantic — including the DC, Maryland, and Virginia area — and parts of the Midwest, released a board-approved five-year strategy on August 19 that puts data center growth at the center of its planning. The document projects that data centers will account for most incremental electricity demand through 2035 and anticipates system stress through 2031 even if AI-related growth slows. PJM says the proliferation of large loads is creating new reliability and operational risks, pointing to a July 22 transmission fault in Northern Virginia during which nearly 4,000 megawatts of data center load abruptly transferred off the grid. The plan sets a target of connecting new generation within one year, but leaves unresolved the questions regulators and consumer advocates are pressing: who pays for the infrastructure to serve giant new loads, and who absorbs stranded costs if forecast demand never materializes. Federal regulators at FERC have opened their own proceeding on integrating large loads.
Why it matters for your business
For DMV businesses this is a pocketbook story. Northern Virginia is home to the largest data center market in the world, and the cost of generating and moving power in PJM territory flows through to commercial electric bills. How the cost-allocation question gets answered over the next few years will help determine whether data centers pay their own way or whether the buildout is partly carried by other ratepayers — including small businesses. The reliability angle is real too: the July event showed how quickly thousands of megawatts of load can swing during a fault, which affects grid stability for everyone connected to it.
What to do about it
- Budget for continued upward pressure on electricity rates in the region over the next several years.
- If you buy power competitively, consider fixed-rate supply agreements to hedge against rising rates.
- An energy audit is one of the few levers you control; cutting consumption blunts whatever rates do.