** Shares of U.S. power producers decline premarket after grid operator PJM Interconnection unveiled a plan to manage surging power demand from data centers that Big Tech needs for its AI expansion

** PJM late on Friday said it plans to require new large power users to either bring their own power generation or enter into a connect and manage framework subject to early curtailment

** After the news, brokerage Jefferies said PJM's decision will make investors question the earnings, cash flows, probability of above-market contracts, and valuation multiples in earnest for the first time in some time

** Constellation Energy CEG.O down 2.8%, Vistra Corp VST.N declines 2.8% and Talen Energy TLN.O falls 3.7%

** NRG Energy NRG.N slips 2.7%

** "We think U.S. power producers' stocks are overvalued as investors underestimate regulatory risk and potential pressure on long-term margins," Morningstar said on Friday

(Reporting by Sumit Saha in Bengaluru)

((Sumit.Saha@thomsonreuters.com;))