{"document":{"slug":"filing-20260928-4001","title":"Comments of U.S. House of Representatives Committee on Energy and Commerce Ranking Member Frank Pallone, Jr. urging FERC to make important improvements, approve amended proposals, etc. re energy costs from data centers,","issued":"2026-09-28","accession":"20260928-4001","docket":"ER26-3380-000","group":"PJM filings","filer":"COMMITTEE ON ENERGY AND COMMERCE","kind":"comments","file":"sources/originals/20260928-4001_01.pdf","url":"https://democrats-energycommerce.house.gov/sites/evo-subsites/democrats-energycommerce.house.gov/files/evo-media-document/ferc.2026.09.28-letter.pdf","sha256":"4d2865873efee72c458a23c7472b6dc3371441577d0be02e221e0ac2198c4d07","pages":4,"tokens":1686,"emptyPages":[]},"pages":[{"page":1,"startToken":0,"endToken":331,"text":"BRETT GUTHRIE, KENTUCKY \nCHAIRMAN \nFRANK PALLONE, JR., NEW JERSEY \nRANKING MEMBER \nONE HUNDRED NINETEENTH CONGRESS \nCongress of the United States \nHouse of Representatives \nCOMMITTEE ON ENERGY AND COMMERCE \n2125 RAYBURN HOUSE OFFICE BUILDING \nWASHINGTON, DC 20515-6115 \n \nMajority  (202) 225-3641 \nMinority  (202) 225-2927 \n \n \n \n \n \n \n \n \n \n \nSeptember 28, 2026 \n \nThe Honorable Laura V. Swett \nChairman \nFederal Energy Regulatory Commission \n888 First Street NE \nWashington, DC 20426 \n \nRE: Docket Nos. ER26-3380, ER26-3515 \n \nDear Chairman Swett: \n \nI write in reference to two recent proposals from PJM designed to help shield Americans \nfrom the skyrocketing energy costs from power-hungry data centers.  While I support many of \nthe provisions included in the proposals, I am concerned that they do not go far enough and \nbelieve the Federal Energy Regulatory Commission (FERC) should use its authority to improve \nPJM’s proposals to protect families across the mid-Atlantic region.  While these proposals are \nnot sufficient by themselves, they represent an important and necessary step to protect \nAmericans’ access to affordable and reliable electricity, and I urge FERC to approve them in \npart, with a few important exceptions. \n \nAmericans are deeply frustrated and concerned that the rapid and unceasing development \nof data centers is driving up their monthly energy bills.  At the end of the day, protecting \nAmericans’ power bills is FERC’s responsibility.  While the Commission has initiated potentially \npromising actions that would impact roughly two-thirds of the nation, it is not enough. \n \nLast year, Energy Subcommittee Ranking Member Kathy Castor and I wrote the \nCommission to warn how data centers could make electricity unaffordable to Americans, and I \nurged FERC to take immediate action to protect ratepayers and ensure that data centers paid their \nfair share.1  Since then, the situation has only worsened.  Data centers are responsible for an \nincrease in PJM capacity market costs of nearly $30 billion since the summer of 2024 – costs \n \n1 Letter from Frank Pallone Jr., Ranking Member, House Committee on Energy and Commerce, to Laura V. \nSwett, Chairman, Federal Energy Regulatory Commission (December 5, 2025)."},{"page":2,"startToken":331,"endToken":858,"text":"The Honorable Laura V. Swett \nSeptember 28, 2026 \nPage 2 \n \nthat my constituents will ultimately have to pay.2  Demand for electricity over the next decade is \nexpected to explode – PJM is forecasting a roughly four percent increase in peak demand each \nyear, driven almost entirely by the massive growth in data centers.3   \n \nUnder PJM’s proposals new data centers would have to pay for their own generation \ncapacity and data centers that do not develop their own new generation capacity would be the \nfirst ones to have their lights shutoff in the face of larger grid issues.  The second proposal is \nprecisely in line with one of the principles I suggested last year to FERC.4  While I have \nconcerns that the specifics of PJM’s proposals are insufficient to grant ratepayers the protections \nthey need, broadly these core concepts are deeply necessary, and FERC should work to \nimplement and improve them as quickly as possible. \n \nI support one key idea across both PJM’s Reliability Backstop Procurement (RBP) and \nInterim Resource Adequacy Service (IRAS) – ensuring that data centers are responsible for \nbringing new generation capacity to the grid.  Data centers are largely responsible for PJM’s \ncurrent reliability and cost crisis.  The only way out is more generation, and the data centers \nresponsible for PJM’s issues should be the ones responsible for finding and incentivizing \ngeneration to fix those issues. \n \nI also want to express my support for PJM’s proposed allocation of costs for its RBP \nauction to wholesale electricity customers.  While FERC largely lacks the authority to allocate \ncosts directly to data centers, it must get as close as it can – by allocating costs not to the entire \nPJM region, but to the zones that are fueling data center growth.  New Jersey ratepayers have not \ncaused PJM’s current reliability issues, and therefore data center owners and operators should \npay to fix the system they are largely responsible for breaking. \n \nRegardless of whether FERC decides to accept the broader IRAS filing, it must retain a \ncritical provision to exclude any future data center load that refuses to procure its own generation \ncapacity from PJM’s capacity auction.  Last year, my constituents saw an outrageous 20 percent \nincrease in their power bills, fueled by skyrocketing prices in PJM’s capacity market.5  Over 90 \npercent of the increased demand PJM expects to see on its system by the end of the decade is \nfrom data centers, and excluding data centers that do not partner with generation capacity will \nhelp prevent my constituents from a future price shock even worse than the one they have \nexperienced over the past 18 months.6  \n \nUnfortunately, PJM’s proposed approaches are incomplete.  The RBP only covers the \napproximately 6.8 gigawatt gap between PJM’s reliability targets and recent generation capacity \n \n2 Monitoring Analytics, LLC, State of the Market Report for PJM: January - June 2026 (Aug. 2026) \n3 PJM Interconnection, 2026 PJM Load Forecast Report (Jan. 2026). \n4 See note 1. \n5 New Jersey Residential Customers Face 20% Bill Hikes, Driven by PJM Capacity Prices: BPU, UtilityDive \nFeb. 13, 2025). \n6  Letter from David E. Mills, Chair, PJM Board of Managers, to PJM Stakeholders (Aug. 8, 2025)."},{"page":3,"startToken":858,"endToken":1461,"text":"The Honorable Laura V. Swett \nSeptember 28, 2026 \nPage 3 \n \nauctions.  It does not cover the broader demand imposed by existing and soon-to-come-online \ndata centers upon PJM’s energy and capacity markets that have caused PJM prices to skyrocket \nsince last June.  It is those data centers that are responsible for the increases in my constituents’ \nelectricity bills over the last few years – not data centers that will not come online until 2028 or \nlater.  I strongly believe the costs for procuring all additional generation capacity for data centers \nshould be allocated to zones with large amounts of data center-driven load growth instead of \nacross PJM as a whole. \n \nSimilarly, provisions of the IRAS proposal do not go far enough to protect consumers.  \nPJM’s requirement that new data centers bring their own new generation capacity effectively \nturns off and resets if PJM can meet its reliability requirement for three years in a row.  Given the \nCommission’s goal of protecting ratepayers and providing American households with a stable \npower grid, letting new data centers off the hook after three years without a crisis does not meet \nthe moment.  If passing data center costs onto other customers is unjust and unreasonable now, it \nwould still be unjust and unreasonable in three years – FERC must reject that part of PJM’s \nproposal.  Likewise, PJM’s proposal to compensate new data centers for their downtime due to \ngrid instability caused by those very same data centers fails to grant ratepayers the protection \nthey need.  I echo the New Jersey Board of Public Utilities’ proposal to strike the compensation \nmechanism from IRAS.7 \n \nWhile I commend PJM on its proposal to establish a registry of large consumers of \nelectricity (including data centers), that registry – or as much of it as possible – must be public.  \nA registry of large consumers of electricity would be invaluable for improving forecasts of \nelectricity demand, which even PJM has noted needs drastic improvement.8  But that is not all.  \nOver the last year, Americans have become increasingly concerned over the air, water, and noise \npollution issues represented by data centers.  Instead of responding with transparency, data center \ndevelopers and utilities have attempted to wield non-disclosure agreements to block information \non data center developments from the public view.  In one instance earlier this month in \nArkansas, a utility attempted to sue a newspaper for publishing information about the utility’s \ninvolvement in a data center project.9  Making PJM’s registry as public as possible, while still \nmandating participation from data centers and other large consumers of electricity, would go a \nlong way in providing the transparency around data centers that we desperately need.  A public \nregistry is also the only way of facilitating public confidence in the many differing commitments \nBig Tech companies have made to not increase residential electricity rates.  The public must have \naccess to data center-specific information on capacity, peak-shaving or demand response \nagreements, and any arrangements a data center has made to bring its own generation capacity.  \n \nFinally, while PJM has gone as far as it can under FERC’s current jurisdiction to ensure \nthat data centers are responsible for the costs they impose upon the grid, the ultimate authorities \n \n7 PJM Interconnection, L.L.C., Supportive Comments and Limited Protest of the New Jersey Board of Public \nUtilities, Docket No. ER26-3515-000 (Sep. 3, 2026). \n8 Letter from David E. Mills, Chair, PJM Board of Managers, to PJM Stakeholders (Jan. 16, 2026). \n9 How NDAs Keep AI Data Center Details Hidden from Americans, NBC News (Oct. 28, 2025); Judge Refuses \nto Block Arkansas News Reporting on Google Data Center Energy Documents, CNBC (Sep. 2, 2026)."},{"page":4,"startToken":1461,"endToken":1686,"text":"The Honorable Laura V. Swett \nSeptember 28, 2026 \nPage 4 \n \nthat make that guarantee are state ratemaking authorities.  FERC must ensure as a part of its \ndecisions in these filings that PJM, load serving entities, transmission owners, and the data \ncenters themselves provide state regulators with enough information to properly allocate any \ncosts resulting from data centers.  If state regulators do not have the right information, then I fear \nAmerican families will be left on the hook for Big Tech’s investments. \n \n \nI urge FERC to make these important improvements to PJM’s proposals and approve the \nproposals as amended as quickly as possible, and to act expeditiously in its related show-cause \norders for grid operators around the country.  If FERC gets this right, then it will have granted \nAmerican families a measure of protection from the costs imposed by data centers.  If the \nCommission falls short, then American families will pay the price.  I hope FERC takes these \nsuggestions for improvements to PJM’s proposals seriously, and I stand ready to work to keep \nelectricity affordable and reliable across the country.  \n \n \nSincerely, \n \n \n \n \nFrank Pallone, Jr. \nRanking Member \n \n \n \n \n \ncc: \nThe Honorable David Rosner \n \nCommissioner \n \nFederal Energy Regulatory Commission \n \n \nThe Honorable Lindsay S. See \n \nCommissioner \n \nFederal Energy Regulatory Commission \n \n \nThe Honorable Judy W. Chang \n \nCommissioner \n \nFederal Energy Regulatory Commission \n \n \nThe Honorable David A. LaCerte \n \nCommissioner \n \nFederal Energy Regulatory Commission"}],"sections":[{"p":1,"at":0,"title":"Pages 1 to 4","method":"page range","endPage":4,"endAt":1569,"startToken":0,"endToken":1686}]}