How Ontario and PJM Are Responding to Data Centre Growth

On August 13, 2026, Ontario (Companion article: Ontario Launches Data Centre Playbook) and PJM each released a proposals responding to rapid data centre growth. The timing was coincidental; the policy contrast is not. Both are trying to protect reliability and existing customers, but they are using different regulatory levers.

Ontario is proposing to decide which data centres represent a sufficiently valuable use of scarce grid capacity, whereas PJM is proposing to let large loads connect if their power needs are supported, or make them interruptible when supply becomes scarce.‍

Same problem, different governance: Ontario proposed Data Centre Playbook [1] would combine a strategic assessment with an electricity-system impact assessment, supported by a new Global Adjustment rate class and a principle of full-cost responsibility.

PJM is a US federally regulated regional transmission organization spanning 13 states and Washington, D.C. It operates wholesale electricity markets and coordinates the regional grid, while states and utilities retain important authority over retail service and cost allocation. PJM therefore cannot simply reproduce Ontario's model of ministerial project selection.

The scale of PJM's demand growth explains the urgency. PJM attributes 30 GW of the 32 GW increase in forecast electricity demand between 2024 and 2030 to data centres. PJMs response has been a package of reliability, planning and generation-supply measures.

‍PJMs Proposed Large-Load Framework: PJM's proposal is the Interim Resource Adequacy Service (IRAS), filed with the Federal Energy Regulatory Commission (FERC) on August 13, 2026. (At the time of this article, the proposal remains subject to FERC acceptance.) Key elements of the proposal include:

• 50MW Threshold: PJM would define a Large Load as an end-use customer with combined peak demand of at least 50 MW at a single site, including demand behind one or more delivery points or points of interconnection within a one-mile radius
  
• Regional Registry:  A Large Load Registry would track existing and new facilities, including their size, location, in-service date and backup generation, subject to confidentiality protections.
• Interim Resource Adequacy Service (IRAS): Developers will have to options, self supply or expect curtailment. The IRAS would apply to new Large Loads whose capacity needs are not supported by new supply or covered through PJM's proposed Reliability Backstop Procurement.
  • PJM would require utilities and other load-serving entities to bring new capacity equal to or greater than the combined peak demand of their new Large Loads. If sufficient capacity is not secured, PJM could direct the affected area to reduce demand during capacity shortages. New unsupported Large Loads would be curtailed before PJM deploys Pre-Emergency Load Management resources, helping protect residential and other traditional customers. States and utilities would determine how the curtailment obligation and associated retail costs apply to individual customers
• Expedited Interconnection Track: The EIT is a fast lane for connecting new generation to the grid, cutting the wait to roughly 10 months It is capped at 10 projects per year across all of PJM and limited to generation with firm build dates and state backing
  • The proposed backstop procurement is intended to address a 6,831 MW capacity shortfall identified for the 2028/2029 delivery year.
• Reliability Backstop Procurement (RBP): A one-time auction (running Sept 30-Oct 21, 2026) in which PJM buys power to cover the 6 GW shortfall. Utilities, load-serving entities and data centers themselves can participate.
• The capacity-market signal: Beginning with the 2029/2030 capacity auction, PJM will stop counting new large loads that don’t bring their own supply when it calculates how much future power to procure
  

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‍WHAT THE COMPARISON MEANS FOR DEVELOPERS AND TENANTS

‍First, 'bring your own power' is becoming a commercial strategy, not a slogan. In Ontario, generation and storage may strengthen the strategic and technical case for approval. In PJM, sufficient new supply can determine whether a large load is firm or exposed to curtailment under IRAS.

Second, power quality and power firmness must be separately. A PJM site may have a path to interconnection but still carry an emergency-curtailment obligation. Developers and tenants should confirm whether the load is registered, how its capacity needs are being supported, who bears the curtailment risk and whether backup generation can sustain the contracted service level.

Third, thresholds matter. Ontario is introducing a new data center rate class “Class C” threshold above 1 MW, while PJM's proposed Large Load framework begins at 50 MW. The difference reflects the policies' different purposes, but it could also shape campus phasing, account structures and competition between existing and new facilities.

Finally, neither framework offers a cost free shortcut to power. Ontario is proposing strategic screening, a separate GA treatment and full-cost responsibility. PJM is pairing a path to connection with new supply obligations, planning treatment and curtailment risk. In both markets, the developer's electricity strategy is moving from technical due diligence to the centre of the business case.

Ontario is asking which data centre projects merit access to scarce grid capacity. PJM is asking how large loads can connect without leaving existing customers with an unfunded reliability obligation. Those are different questions, but they lead to the same practical conclusion: a credible project now requires more than land and a connection request. It requires a defensible plan for supply, cost and system impact.

[1] https://ero.ontario.ca/notice/026-0853[2] https://www.ieso.ca/Sector-Participants/Engagement-Initiatives/Engagements/Technical-Requirements-for-Large-Computational-Loads-Connecting-to-the-Ontario-Power-System

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