U.S. Energy Crisis Sparks Data Center Backlash and Regulation

The U.S. Department of Energy granted emergency authorization to PJM Interconnection to require data centers and large-load users to switch to backup diesel generators during a record heat wave from June 30 to July 7, 2026. The order aimed to prevent residential blackouts across 13 states after electricity demand peaked at 168,158 megawatts on July 2. While PJM reported the generators were not ultimately needed, the move triggered backlash from local officials and environmentalists in Pennsylvania who argue that diesel emissions increase health risks for host communities.

In Lackawanna County and Archbald, Pennsylvania, critics have challenged the Wildcat Ridge Data Center Campus, with scientists estimating annual health damages between $3.3 million and $124 million. Local leaders and environmental advocates contend that these generators may produce more nitrogen oxides and particulate matter than coal plants, shifting the industrial burden onto residents.

Parallel concerns regarding infrastructure and costs have reached the New York State Legislature, which sent Governor Kathy Hochul a proposed moratorium on large data centers. The legislature cited rising electricity bills and strained water resources as primary drivers. Former Energy Secretary Janet Granholm has advised New York to avoid a blanket moratorium, suggesting instead that the state negotiate with developers to invest in grid modernization and clean energy generation.