Pennsylvania PUC Votes 5-0 to Write Curtail-First Rules for Data Centers, and Sends the Cost Question to a Technical Conference

“It is important that electric distribution utilities do not classify any data center as critical load exempt from curtailment during pre-emergency or emergency events.” That sentence sits near the end of a two-page motion the Pennsylvania Public Utility Commission adopted 5-0 on Thursday, September 10 ^[1,2]. The motion, from Vice Chair Kimberly Barrow, starts the state’s own version of the rule PJM has asked FERC to approve: when the grid runs short, new large loads without their own capacity go first ^[2]. The figure behind it is PJM’s, not Pennsylvania’s: a system-wide reliability shortfall of 6,831 MW in the 2028/2029 capacity auction ^[2].

What the commission voted for

The motion does two things, under Docket M-2026-3064961 ^[1,2].

First, it tells the PUC’s Law Bureau and Bureau of Technical Utility Services to draft a tentative order for the commission’s October 1 public meeting ^[2]. The order would set out amendments that electric distribution companies must make to their tariffs, adding a pre-emergency provision with curtailment protocols, and changes to their emergency load control procedures ^[2]. The authority is 52 Pa. Code § 57.52, the commission’s existing rule on emergency load control, which the motion calls “a basic structure” that can be used to require tariff revisions with “universal specificity on the order, criteria, and applicability of customer curtailment protocols” ^[2]. The schedule in the motion: a 30-day comment period and 15-day reply period after the October 1 vote, then a final order for the January 28, 2027 meeting directing utilities to file tariff supplements ^[2]. “Depending on the development of this docket, a rulemaking may follow,” Barrow wrote ^[2].

Second, it sets up a technical conference this fall on large computational load cost allocation, with a Secretarial Letter to announce it and open a docket for initial and reply comments ^[2]. The commission’s release gives no date ^[1].

The commission’s release puts it in plainer terms: staff will propose “greater clarity regarding the order, criteria and circumstances under which customers may be curtailed” ^[1]. “We need clear and consistent procedures for managing load during pre-emergency and emergency conditions, while also examining how costs associated with large new loads should be allocated,” Barrow said ^[1].

The same meeting approved a separate motion from Chairman Steve DeFrank creating a ratemaking working group on return on equity and rate case transparency, Utility Dive reported ^[6]. That one is about rate cases generally, not large loads.

Where it came from

Barrow’s motion is close to a line-by-line answer to Governor Josh Shapiro’s Executive Order 2026-05, signed August 18 ^[2,3]. The order tells the governor’s Special Counsel for Energy Affordability to push the PUC for rules under which each utility with a data center interconnection request revises its pre-emergency IRAS and emergency procedures “so that utilities curtail data centers prior to any other customer,” unless the data center “has secured incremental electric capacity for the entirety of its demand” ^[3]. The critical-load sentence in the motion tracks the order’s second item almost word for word ^[2,3].

IRAS is PJM’s Interim Resource Adequacy Service, filed at FERC on August 13 in Docket ER26-3515-000, and the motion pairs it with PJM’s Reliability Backstop Procurement, filed July 31 in ER26-3380 ^[2]. As this column reported on September 8, Pennsylvania’s commission was among the eleven state commissions backing IRAS’s curtail-first sequence at FERC. The motion notes PJM’s requested dates: September 30 to start the backstop procurement and October 12 for IRAS to take effect, so that it is available by June 1, 2027 ^[2]. FERC had not acted on either as of the vote.

The commission’s own August report gives the in-state load case. The Electric Power Outlook projects “an industrial increase of 18.56% for the five-year period” across the large distribution utilities, and says the increase is “primarily due to” PPL Electric Utilities’ forecast for larger users such as data centers ^[4]. The same report cautions that PPL’s higher forecast is built into PJM’s capacity planning and “does not by itself indicate potential shortfalls” in PPL or PJM ^[4].

What it settles and what it leaves open

On timing, a Pennsylvania data center that cannot show capacity for its full demand would, under the governor’s framework, sit at the front of the curtailment line in both pre-emergency and emergency events ^[3]. The motion uses the same exception PJM wrote into its tariff ^[2]. What it does not say:

• Size. The motion sets no megawatt threshold. PJM’s IRAS uses 50 MW; the executive order uses “peak demand of over 25 MW” for its environmental permitting track, a separate part of the order ^[3]. Which number the tentative order adopts, if either, is open.
• Which loads. The motion says “new computational large loads” in one place and “large load customer” in another ^[2]. Whether a factory of the same size is treated like a data center is not settled in the text.
• What counts as capacity. The motion’s exception is phrased “as proposed by PJM in its Tariff” ^[2]. If FERC changes PJM’s bring-your-own-capacity rules, the Pennsylvania test moves with them, or has to be rewritten.

Cost allocation is held back on purpose. Barrow called it “a more complex issue” and put it in the technical conference “to vet issues of cost responsibility in a data center driven world” ^[2]. Her motion is not neutral on the direction: “Time is of the essence as costs for energy, capacity, distribution, and transmission are already increasing for ordinary retail customers, largely driven by new large computational load customers” ^[2]. The executive order asks for tariffs that charge data centers the backstop auction costs under whatever procedure FERC approves in ER26-3380, and that keep those costs off other customers even if a data center becomes insolvent ^[3].

Where the sides stand

The governor’s case rests on a number from the PJM market monitor: across the last four base residual auctions, data centers accounted for $29.4 billion in capacity charges to ratepayers, 46% of total auction costs, as the order cites it ^[3]. The order also calls the Ratepayer Protection Pledge, under which large AI companies commit to bring or buy new supply, non-binding ^[3].

The data center industry has not filed in the Pennsylvania docket in the record this column draws on, but its position on curtail-first is on paper at FERC. The Data Center Coalition asked FERC to reject IRAS, arguing that the Federal Power Act leaves retail service to the states and that PJM “should not seek to displace the role of the states by imposing a uniform retail curtailment policy across the PJM region” ^[5]. That argument cuts in an odd direction here. The coalition says states must “take the lead” on retail curtailment priorities and supports state interruptible tariffs ^[5]. Pennsylvania is now taking that lead, toward the outcome the coalition opposed at FERC. One slide attached to the protest anticipates the split: “Pennsylvania illustrates this trend,” it says of states setting their own conditions, adding “BYONC to PJM ≠ BYONC to State” ^[5]. The coalition’s preferred alternative contacts large customers first in an emergency and gives them a chance to curtail voluntarily before broader load shed ^[5].

The coalition also said IRAS gives new large loads “a window of less than ten months to procure new capacity or face curtailment” ^[5]. A Pennsylvania final order on January 28 would leave about four months, by this column’s count, before the June 1, 2027 delivery year begins.

What I’m watching

October 1: whether the tentative order names a megawatt threshold and limits curtail-first to data centers or applies it to all new large loads. And the Secretarial Letter setting the cost allocation conference, which will show whether utilities are asked to file numbers or only views.