DERs and Data Centers
Margarita Patria is a principal at Charles River Associates. Her work has focused on the intersection of energy economics, market design, and data analytics. She provides market design and analysis solutions. She is leading multiple policy valuation projects as well as successful energy auctions and renewable procurements in multiple states and is responsible for electricity market analysis, bid valuation, and forecast tasks.
Dmitry Balashov is a Principal in Charles River Associates’ Energy Practice with over 17 years of experience in the North American utility sector. He specializes in utility regulation, strategy, distribution planning, asset management, and grid modernization, with deep expertise in distribution utility operations and infrastructure strategy. Mr. Balashov has led and contributed to numerous high-impact projects, offering specialized knowledge in regulatory proceedings, investment planning, and advanced distribution grid technologies.
The rapid rise in data center demand has sharpened policy debate across PJM and other regions, much of it focused on large-load flexibility. Data centers, particularly those paired with on-site generation, are often described as flexible, partially self-sufficient, and capable of curtailment. In theory, these attributes suggest a way to absorb rapid load growth without immediately committing to new generation or transmission. Flexibility promises speed, optionality, and relief from near-term cost pressures.
It is easy to see why the idea keeps returning to the discussion. The industry has been here before. When planning frameworks tighten, operational flexibility often looks like a way to buy time. History suggests it rarely does so for long.
FERC Order 2222 provides a useful reference point. Issued in September 2020, the order required RTOs and ISOs to open wholesale markets to aggregated distributed energy resources. The objective was straightforward: allow flexible, distributed resources to compete alongside traditional capacity and reduce pressure on the system. On paper, the order succeeded. Each RTO ultimately filed compliant tariffs, many after extended revisions and negotiation.
See Figure One.