FERC Launches Investigation of PJM Grid Co-Location of Data Centers

We're still coming to grips with understanding how the power generation market works with respect to providing electricity for AI data centers. Data centers can potentially be huge and important new customers for natural gas---especially Marcellus/Utica molecules, as some 25% of all the data centers currently operating in the country are located in northern Virginia, where they use M-U molecules. Ten days ago, we brought you a post to help you better understand the various scenarios for how powergen gets provided to these data centers (see A Better Understanding of AI Data Centers & On-Site Powergen). We need to add a new category/term to the list---co-location. FERC has just fired off a directive to PJM Interconnection, the country's largest electric grid operator (covering PA, WV, and OH, among other states), asking PJM to explain how it handles co-location. This increasingly popular AI data center electricity arrangement allows the computer warehouses to connect directly to power plants.

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