Data Centers Face Growing Scrutiny
Maryland Governor Wes Moore is calling for reforms to PJM Interconnection, the largest electricity market in the United States, as rising power demand from data centers puts pressure on supply and household bills. His proposals include long-term power contracts and a requirement that data centers pay for the infrastructure needed to serve them.
PJM covers 13 states across the Midwest and Mid-Atlantic and includes the world’s largest concentration of data centers. Over the past two years, demand from Big Tech server facilities has outpaced the addition of new electricity supply, creating a market crunch that has drawn increasing political attention.
Affordability Becomes A Political Issue
Moore said affordability and reliability should not be treated as competing goals. Speaking at PJM’s annual member meeting, he argued that families should not have to face crushing prices today in order to keep the lights on tomorrow.
The comments reflect growing frustration among state officials as utility bills rise across the region. The issue is becoming especially sensitive because data centers require enormous amounts of power, while households and smaller businesses are also exposed to the costs of grid expansion and capacity shortages.
Capacity Payments Have Surged
PJM’s capacity payments, which are designed to ensure electricity is available during periods of high demand, have jumped roughly 1,000% over the last two years. Moore was among a group of governors who pushed successfully last year for a temporary cap on those prices.
The sharp increase has raised questions about whether the current market design is fit for a period of accelerating electricity demand. Investors, utilities and policymakers are now watching how PJM balances reliability, cost control and incentives for new power generation.
Long-Term Contracts Enter The Debate
A central part of PJM’s proposed reforms would involve long-term, fixed-price contracts between power suppliers and data centers. Supporters argue this could provide more certainty for developers while making large energy users bear more of the cost of serving their demand.
Moore and PJM members, including utilities and power plant developers, appear to agree on the broad need for reform. However, they differ over what has caused the current volatility and who should carry the burden of solving it.
Dispute Over The Source Of The Problem
PJM has argued that varying state policies, including clean energy mandates favoring wind and solar over gas and coal, have made investors more cautious about building new power plants. It also said government intervention in power markets has discouraged long-term commitments.
Moore and other governors have taken a different view. They argue that PJM has been too slow to add new generation and has approved expensive transmission projects that do not always provide clear benefits to their states. That disagreement will shape the next stage of reform.
Relief Measures And Grid Investment Ahead
PJM said it recognizes the pressure from rising power bills and is working to speed up the addition of new electricity supply. Spokesman Jeff Shields said the challenge requires coordination among policymakers, grid operators, utilities, generators and large energy users.
Moore is expected to sign Maryland’s Utility RELIEF Act, which aims to provide financial support to utility customers through set-aside funds and other measures, including caps on utility executive salaries. For investors, the debate signals that data center growth is no longer only a technology story. It is also a power market, infrastructure and political risk story.
