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Soaring Electricity Bills: Biggest US Power Grid Sets Power Costs At Record High To Feed Artificial Intelligence
Prepping & Survival

Soaring Electricity Bills: Biggest US Power Grid Sets Power Costs At Record High To Feed Artificial Intelligence

Jimmie Dempsey
Last updated: July 24, 2025 12:36 pm
Jimmie Dempsey Published July 24, 2025
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Very soon, if you want AI (artificial intelligence) (and even if you don’t), you won’t be able to afford AC.

Just this morning we warned readers that America’s largest power grid, PJM Interconnect, which serves 65 million people across 13 states and Washington, DC, and more importantly feeds Deep State Central’s Loudoun County, Virginia, also known as ‘Data Center Alley‘ and which is recognized as one of the world’s largest hubs for data centers…

… had recently issued multiple ‘Maximum Generation‘ and ‘Load Management‘ alerts this summer, as the heat pushes power demand to the brink with air conditioners running at full blast across the eastern half of the U.S.

But as anyone who has not lived under a rock knows, the deeper issue is that there’s simply not enough baseload juice to feed the relentless, ravenous growth of power-hungry AI server racks at new data centers. 

“There is simply no new capacity to meet new loads,” said Joe Bowring to Bloomberg, president of Monitoring Analytics, which is the independent watchdog for PJM Interconnection. “The solution is to make sure that people who want to build data centers are serious enough about it to bring their own generation.”

Well, there is another solution: crank up prices to the stratosphere.

And that’s precisely what happened. As Bloomberg reports, business and households supplied by the largest US grid will pay $16.1 billion to ensure there is enough electricity supply to meet soaring power demand, especially that from a massive buildout in AI data centers.

The payouts to generators for the year starting June 2026 topped last year’s record $14.7 billion, according to PJM Interconnection LLC, which operates the grid stretching from the Midwest to the mid-Atlantic. That puts the capacity price per megawatt each day at a record $329.17 from $269.92.

In  response to the blowout payout, shares of Constellation Energy and Talen Energy surged in late trading in New York on Tuesday.

As millions of Americans will very soon learn the hard way, AI data centers are driving the biggest surge in US electric demand in decades, leading to higher residential utility bills. That’s a key reason why PJM’s auction, once only tracked by power traders and plant owners but now increasingly a topic for general consumption as electricity bills are about to hit an all-time high, has also become closely watched by politicians and consumer advocates.

As Bloomberg notes, this is the first auction that included both a price floor and cap, setting the range at $177.24 to $329.17, which, of course, was the clearing price level reached in this auction. Why even bother pretending there is an auction: just set the price at the max and be done with it. Last year’s 600% jump in capacity prices set off a political firestorm, resulting in PJM reaching a settlement with Pennsylvania Governor Josh Shapiro to essentially cap gains for two years and make auction prices more predictable after wild swings in recent years.

Despite the increase in costs across the grid, the price cap trimmed costs for consumers who saw the biggest hikes in the last auction. Exelon’s Baltimore area utility reached a $466 last time, while Dominion Energy’s Virginia territory came in at about $444.

Payouts to generators stayed at high levels due to surging demand from big data centers coming online swiftly, said Jon Gordon, policy director of non-profit clean energy advocacy Advanced Energy United. New facilities are consuming as much power as towns or small cities, coinciding with a wave of older power plants shutting down and lagging investment in new supplies and grid upgrades, he said.

The per-megawatt price exceeding the 2024 auction, and well closing at an all-time high, is bullish for independent power producers, including NRG, Talen, Constellation, and Vistra, Barclays analyst Nick Campenella had forecast. These generators have spent more than $34 billion so far this year on deals to mainly buy up power plants fueled by natural gas to feed the AI boom, especially in PJM.

Read the full article here

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