Amid high heat, power demand in PJM territory could set records

As a powerful heat wave threatens much of the eastern United States this week, the nation’s largest electric grid is warning of record-high power demand.

Beginning on Tuesday and extending through Friday, the entire 13-state PJM Interconnection grid, which includes Maryland, will be operating under a hot weather alert, with temperatures climbing toward the triple digits in Baltimore and beyond. With the system under increased strain, adverse events such as blackouts are more likely — and short-term energy prices can soar.

On Thursday, PJM is projecting electricity demand that could reach over 166,000 megawatts, which would surpass an all-time record set in 2006, at 165,563 megawatts.

PJM is facing a new era of unprecedented energy demand because of AI data centers, which use immense amounts of power, and are spreading far beyond their Northern Virginia hotbed.

In a filing with the U.S. Department of Energy on Saturday, PJM asked for permission to require data centers and other large customers to rely on their back-up generators during the heatwave, freeing up more power for the grid to prevent residential power loss. In his filing, PJM senior vice president of operations Michael E. Bryson noted that this arrangement had been approved in other regions, and in PJM in the past.

“PJM may need to rely upon this emergency authorization during the upcoming forecasted hot weather conditions,” read the filing from Bryson. “In particular, PJM is forecasting a potential new all-time PJM peak load on Thursday, July 2 and load levels on Wednesday, July 1 and Thursday, July 2 that are forecasted to exceed last year’s peaks.”

Under the hot weather alert, customers in PJM territory aren’t required to take any action, but the grid operator did ask power generators to end any maintenance outages and return equipment to service by Monday.

But Maryland utilities, such as Baltimore Gas & Electric and Potomac Edison, are asking customers to employ various strategies to use less power during the heatwave — and lower the impact on their bills. Those include setting thermostats to higher temperatures, grilling outdoors instead of cooking inside their homes and waiting until the late evening to use high-energy appliances such as ovens, dryers and dishwashers.

The proliferation of power-hungry data centers are making events like this week’s scorching temperatures even more tenuous for grid operators like PJM, said Tom Rutigliano, a senior advocate for climate and energy at the Natural Resources Defense Council.

“If they have a streak of bad luck with power plants going offline at bad times, we could see some problems. But they’re pretty much set to make it through,” Rutigliano said. “But it’s the data centers that got us to that point, that we’re in a place where luck matters.”

While Maryland has some smaller data centers with considerably lower impacts on the grid, large “hyperscale” data centers are in development statewide, including at a hub in Frederick County, as well as vacant lands and defunct power plants elsewhere in the state.

To Katie Mettle, a policy principal for Maryland at Advanced Energy United, an industry group representing renewable energy companies, this week’s heatwave represents the importance of reducing power demand through energy efficiency programs, which subsidize more efficient appliances, insulation work and other methods.

But during the most recent General Assembly session in Annapolis, lawmakers decided to temporarily cut the state’s signature energy efficiency program by about a third, with the goal of trimming power bills, since customers fund the program. Soon, Maryland utilities will make their proposals to regulators about which pieces of the program will be reduced, and how much.

“We have yet to see exactly how this reduction in goals is going to manifest …  and the impact that’s going to have, but I am pretty concerned about what we’re going to end up seeing,” Mettle said.

This week, PJM’s Board of Managers will consider a variety of proposals for addressing data centers’ power demands during periods of high stress for the electric system. After the Board makes a selection, it must seek approval from the Federal Energy Regulatory Commission.

“There’s proposals all over the place. Everywhere from: Just don’t let data centers connect to the grid at all unless they bring their own power plants, up to a very laissez-faire approach,” Rutigliano said.

The NRDC is among the environmental and consumer advocacy groups pushing to protect customers from increased costs and other harms because of data centers — including during heatwaves and other severe weather, when the grid is most vulnerable. They’re pushing for the increased deployment of battery storage technology to support data centers, he said.

“If they don’t bring enough supply, they have to be the ones who get turned off — before prices go through the roof for everyone else,” Rutigliano said.

Even if the high temperatures, paired with the pre-existing strains on the grid from data centers, do not cause black outs, prices will likely still spike on a short-term basis, Rutigliano said. This problem could worsen as more data centers come onto the grid.

“What’s going to happen later this week is going to be a real preview of what the next couple of years are going to look like,” Rutigliano said. “Even if there aren’t blackouts, this could easily be a billion dollar couple of days, if energy prices shoot up really high.”