PJM auction adds billions in power costs as data centers drive demand

PJM Interconnection’s latest capacity auction cleared at the FERC-approved cap of $329.17 per megawatt-day across its entire 13-state footprint and the District of Columbia, a result that could push some customers’ bills up 1.5% to 5% year over year. The regional grid operator serves about 65 million to 67 million people in the Mid-Atlantic and Ohio Valley, and the higher wholesale price is already being framed as a household bill problem as much as a power-market story.

PJM said the 2026/2027 auction procured 134,311 megawatts of generation resources, but the price still rose from $269.92 per megawatt-day in the prior 2025/2026 auction. Monitoring Analytics, PJM’s market monitor, found that 11,993 megawatts of existing and forecast data center load in the 2026 peak-load forecast lifted auction revenues by $7.27 billion, or 82.1%, compared with what the auction would have produced without that load. The monitor also said data center demand was responsible for 63% of the price increase in the 2025/2026 auction, adding about $9.3 billion in capacity costs.

That is the core fairness dispute now moving through the region: capacity charges are spread across all customers in PJM territory, not just the data centers driving the demand. Consumer advocates and energy researchers say that leaves households and small businesses paying for an infrastructure buildout tied to artificial intelligence and cloud computing before new generation and grid upgrades catch up.

The pressure is especially visible in Northern Virginia’s Data Center Alley, one of the world’s largest concentrations of data centers and a major driver of load growth inside PJM’s service area. In Pennsylvania and other PJM states, the politics are turning toward who should bear the cost of keeping the lights on as power-hungry server farms keep expanding.

The scale of the market helps explain why the auction outcome matters. The 2025 auction brought in $16.1 billion in revenue, and the latest round added another wave of costs at a time when electric demand is rising faster than the region’s supply buildout. The New York Times estimated the auction would add $6.3 billion in additional charges to consumers and businesses because of data-center electricity needs, underscoring how quickly the burden can scale when wholesale prices reset at the cap.

State lawmakers and regulators are beginning to respond, with some jurisdictions moving to shift more of the cost onto large data centers and away from ordinary households and smaller businesses. Those fights are likely to intensify as PJM’s next auctions reflect a grid being reshaped by a data-driven power boom.