--- title: "Will Data Centers Face Power Outages? The U.S. Grid Can't Keep Up" type: "News" locale: "en" url: "https://longbridge.com/en/news/293987125.md" description: "PJM, the largest grid operator in the United States, has warned that the AI boom is causing a surge in electricity demand, potentially leading to mandatory power cuts for data centers unable to secure their own supply as early as 2027. PJM plans to launch an emergency auction in September to fill a gap of approximately 7 gigawatts, with the associated costs borne by data centers. This move clarifies that the power costs of AI expansion will be shouldered by data centers themselves, rather than being passed on to ordinary residents" datetime: "2026-07-28T00:23:14.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293987125.md) - [en](https://longbridge.com/en/news/293987125.md) - [zh-HK](https://longbridge.com/zh-HK/news/293987125.md) --- # Will Data Centers Face Power Outages? The U.S. Grid Can't Keep Up PJM, the largest grid operator in the United States, has issued a formal warning: the artificial intelligence boom is pushing the power grid to a critical point, and data centers may face mandatory power cuts. According to a Bloomberg report on July 28, PJM Interconnection LLC wrote to stakeholders on Monday, **announcing that as early as mid-2027, data centers that fail to secure sufficient power generation supply on their own will be temporarily disconnected from the grid during peak demand periods.** Meanwhile, PJM announced it will launch an emergency power auction this September to fill a projected electricity shortfall of about seven gigawatts starting in June 2028—a previous auction held earlier this month had already failed due to insufficient supply. Paula Conboy, Chair of the PJM Board, was direct in her letter: **"The current trajectory of rapid load growth, tightening supply, and rising capacity costs is unsustainable. Existing consumers should not bear higher capacity costs for large new loads that fail to bring their own or otherwise procure the necessary new supply."** This statement implies that the power costs associated with the expansion of AI infrastructure will increasingly be borne by data center operators themselves, rather than being passed on to ordinary residential users. ## Power Cut Warning Mechanism: Compensation for Cooperation Under PJM's plan, data centers will not face power cuts without warning. The scheme includes a warning mechanism: **before the grid truly enters an emergency state, advance warnings of power restrictions will be issued to data centers, giving operators a certain window to respond.** To mitigate the impact of mandatory power cuts on data center operators, PJM stated that operators accepting power restrictions are expected to receive corresponding compensation to cover their inconvenience and additional expenses. This arrangement effectively integrates data centers into the demand response system, transforming them from passive recipients into active participants capable of contributing to grid regulation. At the same time, PJM will advance a bilateral matching process to help data centers connect directly with power generators, seeking supply-demand matching at the market level. The agency predicts that **by 2038, data centers will add approximately 70 gigawatts to electricity demand.** Earlier this month, demand on the PJM grid surged to 168 gigawatts, breaking a historical record that had stood for two decades—this figure was driven by the combined demand from extreme heat and newly built AI facilities. Meanwhile, since 2022, approximately 15 gigawatts of generation capacity have retired within the area covered by PJM. **The dual pressure of surging demand and shrinking supply has placed significant strain on the grid's resource adequacy.** In its letter, PJM stated, "The Board believes this reliability threat requires decisive action." To address this, **PJM announced it will launch an emergency auction so-called "Reliability Backstop Procurement" in September, aiming to supplement a shortfall of about seven gigawatts for the delivery period starting in June 2028.** Under this plan, the costs associated with this emergency procurement will be borne by data centers. This series of measures by PJM sends a clear signal to the market: **the cost of AI-driven expansion in electricity demand will increasingly be absorbed by data center operators themselves, rather than being shared by existing users.** For technology companies deploying extensively within PJM's coverage area, this means a dual rise in both the cost and uncertainty of securing power. PJM is the largest grid operator in the United States, covering areas including the "Data Center Alley" in Northern Virginia. ## Continued Political Pressure, Growing Calls for Reform Additionally, reports indicate that the pressure PJM faces recently comes not only from the market but also from the political sphere. Several governors, utility companies, consumer rights groups, and even the White House have criticized it, with some voices even calling for the breakup and restructuring of the grid. In January this year, U.S. President Trump and bipartisan governors jointly proposed a plan suggesting that PJM hold a one-time power auction, where technology companies would effectively fund the construction of new power plants by bidding for 15-year contracts. To improve the accuracy of future demand forecasts, PJM also announced it would establish a new data center registration system to track the identity information and electricity usage requirements of each data center, allowing for more precise planning of grid resource allocation. ## Related News & Research - [Largest US power grid moves ahead with plan to meet swelling demand](https://longbridge.com/en/news/294050857.md) - [Grid bosses tried to water down rules before blackout scare](https://longbridge.com/en/news/294105966.md) - [Tories accuse power grid operator of lying over blackout risk](https://longbridge.com/en/news/293828115.md) - [Crackdown on data centres clogging up electricity grid](https://longbridge.com/en/news/294176634.md) - [AI's new North Star: Intelligence per dollar](https://longbridge.com/en/news/293823098.md)