(Reuters) - Grid operator PJM Interconnection responded on Tuesday to a complaint from Pennsylvania Governor Josh Shapiro over power market rules, citing concerns about potential power shortages due to the fast-paced expansion of data centers.
Shapiro had filed a complaint with the Federal Energy Regulatory Commission on Monday, arguing that the largest U.S. power grid operator needs to change its market rules to avoid a potential surge in electricity costs.
"We have been warning for over two years of the prospect that parts of our country could run short of power during high demand periods," PJM said in a statement.
"This possibility has been growing, primarily as a result of state and federal policy decisions that are pushing generators to retire prematurely, and also due to unprecedented and rapidly growing data center construction," the grid operator added.
The company has sought permission from federal regulators to lower the market price cap and has proposed faster integration of new generation projects to mitigate issues such as power deficiencies during periods of high demand.
PJM, which serves nearly 65 million people across the U.S., has faced increased public scrutiny since July when it said that its annual capacity auction would lead to record-high payments to power plants within its system.