PJM, the nation’s largest electrical grid operator, on Tuesday released results of an electricity auction that would add $6.3 billion in costs to the bills of millions of households and businesses within the next three years, an increase driven by the power demands of data centers.
During the annual auction, power companies supplied prices that they were willing to accept to supply electricity to PJM at times of peak demand. Those prices are then factored into the electricity rates that are eventually charged to the grid’s customers in 13 Eastern states and the District of Columbia.
In a statement, PJM said data centers were increasing electricity demand throughout the region.
“These auction results show that demand for electricity continues to grow faster than electricity supply,” David Mills, president and chief executive at PJM, said in an announcement of the auction results. “We are working with government and industry leaders on multiple fronts to restore that balance by bringing on new generation as fast as possible and managing the growth of new load on the grid.”
Over the last few years, individuals and politicians have grown frustrated with PJM’s operations as electricity prices have steadily increased. At the same time, anger over data centers has spread nationwide. New York on Tuesday announced the nation’s first statewide moratorium on construction of the giant facilities, a one-year pause to assess their impact on the environment and energy use.
The PJM grid supplies electricity to 67 million people from Virginia Beach to Chicago. The network of power systems includes the world’s largest cluster of data centers, in Northern Virginia.
“Demand growth is not going away,” said Patrick Cicero, a former state-appointed consumer advocate for Pennsylvania who is now counsel for the Pennsylvania Utility Law Project, which assists low-income consumers. “The bottom line is high prices are going to remain in place.”
In its role as a regional grid manager, PJM effectively sets a significant portion of retail electricity rates, but governors and their appointed regulators have little sway over it. PJM is regulated by the Federal Energy Regulatory Commission, not state lawmakers.
PJM’s annual auctions help determine the electricity costs for the two years after the auction. Since 2024, the auctions have added in total about $29 billion in costs to all utility customers in the PJM region because of data centers, according to Monitoring Analytics, PJM’s independent market monitor. The market monitor also produced the estimate of $6.3 billion in additional costs from the latest auction, which was held on June 30.
The high costs have so angered Gov. Josh Shapiro, the Pennsylvania Democrat, that he sued PJM in December 2024. Mr. Shapiro and PJM reached a settlement that capped the price set by the auction, saving consumers billions of dollars.
The PJM grid has often had only a thin buffer of excess power during extreme weather such as the recent heat dome that sent temperatures soaring across the East.
Mr. Shapiro and other governors have complained that PJM has been too slow to connect more power plants, solar and wind farms, batteries and other resources that would have helped lower prices and eased strain on the grid.
PJM’s grid serves all or part of New Jersey, Pennsylvania, Delaware, Maryland, Virginia, West Virginia, North Carolina, Tennessee, Kentucky, Ohio, Indiana, Illinois and Michigan, as well as the District of Columbia.
