Marylanders and residents in surrounding states should brace for rising power bills due to capacity constraints on the regional power grid and the increasing peak load from new AI data centers (read: here). This combination creates a perfect storm of continued utility bill inflation, which will only pressure cash-strapped households in the years ahead.
On Friday, Goldman published a note about Tuesday’s PJM Interconnection power capacity auction for the 2025-26 planning year (June 1st, 2025, to May 31st, 2026). The note revealed a massive surge in capacity prices:
“The price across the RTO (see map below) was $269.92/MW- day. This is more than an 800 percent increase from the most recent auction (which cleared at $28.92/MW-day), and also a new record (the previous high was $174.11/MW-day for the 2010- 2011 planning year).”
“In addition to procuring the required capacity across the PJM RTO region, PJM’s auction also sets targets for specific zones or LDAs (Locational Deliverability Areas) based on transmission limitations. The auction failed to procure the required level of capacity in two zones (Dominion or “DOM” and Baltimore Gas and Electric or “BGE “) which cleared at the applicable caps of $444.26/MW-day (DOM) and $466.35/MW-day (BGE). PJM has not yet published the extent of the shortfall in the two zones.”
The critical point from the report:
“After a series of auction delays and relatively low clears (see chart below), PJM capacity prices appear to have finally caught up with the generative AI data center load growth story that has been central to parts of PJM.”
Hellbound and Down 