FERC halts PJM data center power auction as Senate rejects cost bill

Federal regulators halt PJM procurement

The Federal Energy Regulatory Commission ordered grid operator PJM Interconnection on 30 September 2026 to suspend and revise its planned backstop power auction. PJM, which manages the power grid across 13 Mid-Atlantic and Midwest states, had scheduled the emergency procurement to address regional capacity deficits. FERC accepted core elements of the filing but imposed a five-month suspension to open proceedings on cost allocation. Regulators instructed PJM to ensure that large energy users like data centers cover the costs of securing extra electricity.

FERC Chairman Laura Swett described the condition of the regional network in the order.

We are prepared to promptly act on a subsequent proposal that addresses the concerns raised... the region's reliability hangs in the balance.

Commissioner Lindsay S. See supported the directive to shield retail consumers from new infrastructure expenses.

Existing customers should not be left paying costs attributable to new demand.

Legislative deadlock in the Senate

Federal lawmakers also addressed data center electricity costs on Wednesday as the US Senate voted on the Ratepayer Protection Act. The bill required state utility regulators to consider compelling data center operators to finance the grid upgrades built to serve them. The measure failed in a 57 to 43 vote after missing the 60-vote threshold to end a filibuster. Four Democratic senators, Maggie Hassan, Amy Klobuchar, Jon Ossoff, and Raphael Warnock, backed the bill alongside Republicans, following its earlier 417 to 3 passage in the House of Representatives.

Senate Democratic Party leader Chuck Schumer opposed the bill, criticizing its non-binding structure.

We need real action on data centres, and what do Republicans decide all of a sudden to push forward? A bill that is totally optional.

Energy Department commits transmission funds

The US Department of Energy announced funding on 24 September 2026 to expand grid capacity through its SPARK initiative, funded under the 2021 Infrastructure Investment and Jobs Act. The program allocates $1.9 billion in federal grants across 31 transmission projects worth a combined $5.25 billion, with project recipients providing the remaining $3.35 billion.

The projects plan to rebuild more than 1,500 miles of transmission line, add grid-enhancing technology to nearly 21,000 miles, and unlock over 23 gigawatts of capacity. US Energy Secretary Chris Wright stated that the investments will get more out of existing infrastructure. The department plans to finalize awards between October 2026 and January 2027.

Regional power shortfalls and expansion

The regulatory and legislative moves respond to rapid data center expansion across the country. PJM Interconnection faces a regional electricity shortfall exceeding 6,800 megawatts as data center demand outpaces new power connections. PJM spokesman Jeff Shields stated that the grid operator is incorporating the federal instructions.

We remain focused on advancing solutions that maintain reliability, appropriately allocate costs to the customers driving those costs, and protect consumers as the region navigates significant demand growth.

Up to 5,400 data centers currently operate in the United States, concentrated heavily in Virginia and Texas, followed by California, Ohio, and New York. FERC also instructed PJM to improve demand forecasting, noting that speculative interconnection requests complicate long-term utility planning.