Data Centers Devour 40% Of PJM’s $16.4 Billion Capacity Costs, Driving Price Surge

While tech giants keep building massive server farms across the PJM grid region, regular electricity customers are getting stuck with the bill. Data centers are now gobbling up a whopping 40% of PJM’s $16.4 billion capacity costs, pushing prices through the roof for everyone else. Shocker, right?

The numbers are staggering. PJM’s most recent capacity auction saw prices skyrocket by a factor of ten. That’s an $7.2 billion increase, with data centers responsible for 63% of that surge. Those “phantom” data centers – ones that were projected but haven’t even been built yet – accounted for $6.2 billion in the December auction. Talk about paying for someone else’s electricity habit.

Your electric bill is feeling the pain. Residential customers in D.C. are seeing monthly increases of $21, with half of that from capacity prices alone. Western Maryland? Up $18. Ohio? Another $16. All told, regular folks are paying $9.3 billion more annually because tech companies need somewhere to store their data. Great.

It gets worse. The forecast shows 20,000 MW of data center growth in the Dominion Zone by 2037. PJM’s peak load is expected to jump by 32,000 MW by 2030, almost entirely from these digital warehouses. That means more transmission lines – $12 billion worth – that you’ll be paying for. Northern Virginia has become Data Center Alley, housing the largest concentration of these energy-hungry facilities in the nation.

The environmental impact isn’t pretty either. CO2 emissions are projected to increase by 1,014 million short tons, a 35% jump. More inefficient, expensive power plants running more often. Wonderful.

Meanwhile, data centers enjoy rate discounts between 10-30%, which adds another $1.50 to $8.40 to your monthly bill. The capacity market has hit its price cap imposed by PJM which prevented even higher increases during the recent auction. Regulators are scrambling to develop new tariff structures, but the stakeholder process hasn’t reached consensus.

The future? Without intervention, expect capacity bills to hit $27-30 billion annually from 2028-2032. That’s $163 billion total. Hope those cat videos are worth it.