Firm vs. Interruptible Electric Service for Data Centers

Every service agreement answers one question: under what conditions can the utility stop delivering power to you? With firm service the answer is “only in emergencies the system was not planned to withstand.” The utility and its transmission planner study the grid so that your contracted load can be served through normal contingencies, such as the loss of a line or transformer. That is why firm service for a large load often waits on network upgrades and new generation, and why it is the bottleneck behind most interconnection delays.

Non-firm service starts from a different promise: you get power when the system has room. In FERC’s December 2025 order on co-located load in PJM, the non-firm contract demand service it described is an as-available service with curtailment priority below firm customers.⁴ Interruptible and curtailable service are the retail-rate versions of the same idea, usually written into a tariff rider with a credit, a notice period and a cap on hours.⁷

The terms overlap and utilities use them loosely. In this guide, “non-firm” and “conditional” refer to service granted before the grid is fully built to support the load, and “interruptible” refers to a rate option a customer chooses for a discount. The legal definition in your own agreement is what counts, so read it, and confirm with the utility how it applies.

The most important development for site selection is conditional service as a bridge. The logic is simple: the transmission system may have spare capacity in most hours today, even though it cannot yet serve a new load firmly under every contingency. Rather than make the customer wait years for upgrades, the grid operator connects the load now and keeps the right to cut it when the system is stressed.

SPP’s Conditional High Impact Large Load Service (CHILLS) is the clearest example. FERC approved it on June 5, 2026.¹ Under CHILLS, SPP provides transmission service using available transmission capacity for up to seven years while the large load acquires firm service, and SPP can cut service when the system is constrained or under emergency conditions.¹ The seven-year limit is meant to push customers to obtain designated resources or complete the upgrades needed for firm long-term service through existing tariff processes.⁵

At the distribution level, Pacific Gas and Electric’s Flex Connect program offers faster connections in exchange for curtailment agreements while local upgrades are completed.⁹ A flexible connection of this kind typically pairs a firm portion of the load with a conditional portion that relies on on-site or co-located resources during limited periods of system stress.¹⁰

For a developer the question is not only whether conditional service exists, but whether there is a credible, dated path to firm service at the end of it. Ask what upgrades are assumed, who is funding them and what happens if they slip. Our guide to transmission upgrades and cost allocation covers the funding side.

PJM has moved on two tracks. For loads co-located with generation, FERC in December 2025 directed PJM to create three new transmission service options: an interim non-firm service while upgrades are built, a firm contract demand service and a non-firm contract demand service.¹¹⁴ FERC found that PJM’s tariff lacked services reflecting co-located loads “willing and able to limit their energy withdrawals from the transmission system under certain conditions.”¹¹ Our guide to co-locating data centers with power plants covers that configuration.

For grid-connected large loads, the PJM Board’s January 16, 2026 decision on the Critical Issue Fast Path process for large load additions paired a voluntary “bring your own new generation” track with expedited interconnection, and a “connect and manage” framework for new large loads that do not bring generation.² Under that framework, curtailment is expected to occur before pre-emergency demand response is deployed, and the Board described it as an interim solution while new load outpaces new capacity.² PJM forecasts roughly 70 GW of new large-load demand by 2038, alongside about 15 GW of generation retired since 2022.²¹²

FERC has since widened the scope. On June 18, 2026, it issued show cause orders to all six FERC-jurisdictional RTOs and ISOs, requiring each to show that its tariff adequately addresses large-load interconnection or to propose reforms, with responses due by August 17, 2026.¹³ Expect more non-firm and conditional products to emerge from those filings. The PJM site selection guide and the ISO and RTO guide explain how market rules shape siting.

Texas took a statutory route. Senate Bill 6, enacted in 2025, defines large loads as 75 MW or more (the PUCT may lower the threshold) and ties curtailment authority to firm load-shed emergencies rather than ordinary peak conditions.⁶ Key provisions for site planning:

• Non-critical large loads interconnecting on or after December 31, 2025, must have remote-disconnect capability for emergency load shedding.⁶
• Large loads with on-site backup generation able to serve at least 50% of their demand must disclose those facilities to the utility and ERCOT.⁶
• ERCOT may issue emergency notices directing large loads with backup generation to reduce load or deploy that generation.⁶
• The PUCT and ERCOT must develop new demand-response and reliability services, including a competitively procured program in which participants receive 24 hours’ notice before a curtailment request.⁶

The PUCT adopted its implementing interconnection rule for ERCOT loads of 75 MW or more on September 18, 2026.¹⁴ In practice every new large load in ERCOT now carries some exposure to emergency curtailment, whether or not it signs up for anything voluntary. Our guide to Texas Senate Bill 6 covers the law in detail, and ERCOT site selection covers the market.

Long before data centers, utilities offered interruptible rates to industrial customers who could shut down a process for a few hours in exchange for a lower bill. These riders still exist and some data center operators look at them, but they were not designed for 100 MW-plus loads.

The pattern is common: a size ceiling below what a hyperscale campus needs, a program cap, or a closed enrollment.⁷⁸ Where a rider does fit, the terms that matter are the credit, the notice period, the maximum hours per event and per year, and the penalty for failing to curtail. A large-load tariff may also include its own curtailment or minimum-bill terms; see large-load tariffs and electric service agreements.

Accepting non-firm service is an operating decision as much as a contract term. A data center has three ways to ride through a curtailment: reduce IT load, shift work elsewhere, or run on-site power. The first two are covered in our guide to flexible data center loads and demand response. The third is constrained by air permits.

Under Clean Air Act rules, certain stationary emergency engines may run without an hourly limit in true emergencies but are limited to 100 hours a year for non-emergency operation, of which up to 50 hours may be used under certain demand response arrangements.³ EPA’s May 2025 guidance set out five conditions for that 50-hour use, including dispatch by the local balancing authority or transmission and distribution operator to avoid interruption of local supply.³¹⁵

That is why a site that plans to accept meaningful curtailment usually needs permitted prime or bridge power, not just emergency diesel. Gas supply, emissions permits and generator footprint then become part of the land question. See on-site generation and bridge power and microgrids and battery storage.

1. 01What triggers a curtailment: system emergency, local constraint, price, or operator discretion?
2. 02What notice is given, and what is the maximum duration per event and per year?
3. 03Is the curtailment full or partial, and what portion of the load stays firm?
4. 04What upgrades or resources convert the service to firm, on what date, and who pays if they slip?
5. 05What penalties apply if the load does not curtail on time?
6. 06What on-site generation may run during curtailment under the site’s air permit?

Get the answers in writing and have counsel and an electrical engineer review the agreement. A parcel near a constrained substation can still be a good site if conditional service is available and the site can carry the backup it implies. If you want to know where a parcel stands, get a site reviewed.