The Federal Energy Regulatory Commission (FERC) voted unanimously on February 20, 2025, to initiate a review of co-location issues related to large loads, such as AI-enabled data centers, at generating facilities within the PJM region. This inquiry aims to determine if the PJM tariff requires updates to ensure grid reliability and equitable costs for consumers.
- FERC reviews co-location of large loads
- Focus on PJM, the largest grid operator
- Show cause proceeding initiated for PJM
- Tariff lacks clarity on co-location arrangements
- Exelon Companies' tariff revisions rejected
- Commission emphasizes need for timely action
The review follows a growing number of proceedings in PJM concerning the co-location of generators and large load customers. FERC’s order combines two pending proceedings and directs PJM and its Transmission Owners to respond within 30 days regarding the adequacy of the current tariff.
The FERC’s decision reflects increasing concerns about the implications of co-location arrangements, which are becoming more common as data centers expand. These arrangements can significantly impact grid reliability and consumer costs, prompting the Commission to seek clarity on the existing PJM tariff regulations. The inquiry is particularly focused on how these arrangements are structured and the potential need for updated rules.
During a technical conference in November 2024, stakeholders expressed the urgency for FERC to address these issues. Chairman Mark Christie emphasized the necessity of acting promptly to evaluate co-location arrangements, highlighting the complexities involved. The Commission noted that the current PJM tariff lacks sufficient details regarding the rates, terms, and conditions applicable to co-location, potentially leaving both generators and load customers uncertain about their options.
- FERC’s order combines records from a technical conference and a complaint by Constellation Energy Generation, LLC.
- PJM and its Transmission Owners have 30 days to justify the existing tariff or propose changes.
- FERC rejected Exelon Companies’ proposed tariff revisions, citing overreach in their filing rights.
As the review progresses, the Commission aims to ensure that any necessary changes to the PJM tariff promote both grid reliability and fair consumer costs. The outcome of this inquiry may set important precedents for the treatment of co-located loads in the future.
In summary, FERC’s action to review co-location issues in PJM represents a critical step in addressing the complexities associated with large load customers like data centers. The Commission’s findings will be essential in shaping future regulations to balance grid reliability with consumer interests.
