Ratepayers and Power Prices

Who pays for new generation and grid · Flagship: the PJM capacity auction

Data centers are the largest new source of electricity demand in a generation, and households want to know whether it shows up on their bills. PJM's capacity price rose ninefold in one auction and has sat at the cap since, its market monitor puts nearly half the cost on data center load, and six states have created separate rate classes so large loads pay their own way.

PJM capacity auction clearing prices by delivery year: $28.92 per MW-day for 2024/25, $269.92 for 2025/26, then the price cap of $329.17, $333.44 and $325 for the next three years; the market monitor attributes $29.4 billion of the $63.6 billion total of the last four auctions to data center load PJM CAPACITY PRICE, $/MW-DAY, BY DELIVERY YEAR 0 100 200 300 400 $28.922024/25 $269.922025/26 $329.172026/27 $333.442027/28 $3252028/29 Price cap FOUR AUCTIONS, 2025/26 TO 2028/29: $63.6 BILLION Data centers $29.4B (46%)All other load $34.2B Market monitor's estimate; PJM does not publish a data center share.
PJM jump
9x
At cap
3 auctions
Data center share
46%
US bills, 2025
+5%
Hub
Society

What it is

Who Pays for the Grid Data Centers Need

A data center campus can add as much load as a city. The question is whether the cost of the new power plants, transmission lines and substations lands on the data center or on every other customer on the grid.

  • Bills: US residential prices rose 5% in 2025 and the EIA forecasts nearly 5% more in 2026, to 18.2 cents per kWh. In PJM states, retail increases from June 2025 ranged from 10% to 20% in New Jersey and Pennsylvania.
  • The case that data centers raise rates: PJM's market monitor attributes 46% of four years of capacity costs to data center load. A Carnegie Mellon and NC State study estimates data centers could raise US generation costs 8% by 2030 and more than 25% in northern Virginia. Harvard's Electricity Law Initiative argues special contracts shift costs to households.
  • The case that they need not: Lawrence Berkeley National Laboratory found states with the fastest load growth generally saw real prices fall, because fixed grid costs are spread over more sales, though LBNL noted sudden load spikes can raise prices in the near term. An Amazon-funded study by E3 found its data centers covered their cost of service.
  • Tariffs: Ohio, Virginia, Georgia, Indiana and Oregon now put large loads in their own rate classes, with minimum-payment contracts so households are not left with stranded costs; Texas's SB 6 sets cost-sharing and curtailment rules for loads of 75 MW and up.
  • Politics: power prices were a central issue in the 2025 Virginia and New Jersey governor races, and more than $45M in 2026 campaign ads mentioned data centers, split almost evenly between the parties.
  • China: households pay less than industry, and western provinces sell data centers power at about half the eastern price under regional subsidies.

Flagship

PJM: The Capacity Auction That Made It a Bill Issue

  • Market: PJM runs the grid for 13 states and Washington, DC, and buys capacity three years ahead through an annual auction.
  • Jump: the 2025/26 auction cleared at $269.92 per MW-day, about nine times the prior year, for a total of $14.7B. The next three auctions all hit the price cap, near $330.
  • Attribution: the market monitor, Monitoring Analytics, attributes $29.4B of $63.6B across the four auctions to data center load, much of it for data centers not yet built. PJM does not publish its own figure.
  • Response: after a January 2026 statement from the White House and all 13 governors, PJM extended the price cap and filed for a backstop auction to buy about 6.8 GW on long contracts, with costs aimed first at utilities serving new data centers. FERC suspended it pending review.
  • Still short: the 2028/29 auction cleared 6,831 MW below the reliability requirement.

Cases

Tariffs, Auctions and Pledges

Data center electricity cost cases
CaseWhatDate
PJM capacity auction 2025/26$269.92/MW-day, up from $28.92; $14.7B totalJuly 2024
PJM capacity auction 2028/29$325/MW-day at the cap; 6,831 MW short of the reliability requirementJuly 2026
PJM Reliability BackstopAbout 6.8 GW on contracts up to 15 years; FERC suspended it to February 2027Filed 2026
AEP Ohio data center tariffLoads over 25 MW pay for at least 85% of subscribed demand for up to 12 yearsJuly 2025
Dominion GS-5 rate class, VirginiaSeparate class for large loads; 14-year contracts with minimum demand chargesNovember 2025
Oregon POWER ActData center class: residential rates down 1.3%, data center rates up 29% at PGEJuly 2026
Texas SB 6Loads of 75 MW and up share grid costs and can be curtailed in emergenciesJune 2025
FERC show-cause ordersAll six FERC-regulated regional grid operators must justify or reform large-load rules; ERCOT is not coveredJune 2026
White House Ratepayer Protection PledgeSeven AI companies pledge to pay for new generation and grid upgrades; not bindingMarch 2026
China, East Data West ComputingWestern data center power about 0.35 yuan/kWh against 0.6+ elsewhere under regional subsidiesSince 2022
IrelandData centers used 23% of metered electricity; new sites must bring their own generation or storage2025

Record

Dataset Record

Dataset
PJM capacity auctions, large-load tariffs, rate studies and China power pricing
Sources
PJM, Monitoring Analytics via Utility Dive, FERC, PUCO, Virginia SCC, Georgia PSC, Oregon PUC, Lawrence Berkeley National Laboratory, EIA, Harvard EELP, Carnegie Mellon, E3, NJ BPU, Axios, NPR, Caixin, CSO Ireland, CRU
Last verified
October 2026