Imagine a massive data center suddenly losing power during a critical AI training run. That might become reality as PJM Interconnection, the biggest US power grid operator, is changing the rules. They now require data centers that consume huge amounts of electricity to either generate their own power or risk being cut off during shortages.
PJM manages electricity across 13 states and the District of Columbia, supplying around 65 million people. The rapid growth of AI-driven data centers has pushed electricity demand beyond what PJM expected when planning the grid. This surge threatens to drive up costs dramatically for everyday consumers unless addressed.
In recent capacity auctions, prices surged from $28.92 per megawatt-day in 2024/2025 to over $329 in 2026/2027, a tenfold jump in just two years. These soaring costs, largely driven by new data centers gobbling up power, would otherwise be passed on to households and small businesses across PJM’s region.
To tackle this, PJM introduced a policy nicknamed “Bring Your Own New Generation” or BYONG. Starting in August 2026, any data center adding 50 MW or more must either install their own power generation or accept the risk that the grid will cut their electricity during tight supply periods. This approach forces big energy users to take responsibility for their additional consumption instead of pushing the burden onto the grid.
Alongside BYONG, PJM rolled out a “Connect and Manage” system that prioritizes power delivery to those who have brought their own generation capacity. Facilities without their own power sources will face cutbacks first when the grid is strained.
This push follows extensive discussions throughout 2025 and has support from both federal and state officials within PJM’s jurisdiction. The move could reshape how hyperscale data centers and crypto mining operations invest in energy infrastructure going forward.
The stakes are high: without such reforms, the rising electricity use by AI data centers threatens to inflate power bills for millions. PJM’s new rules aim to prevent those costs from spiraling out of control, but some operators might find themselves facing outages if they don’t comply.
