{"id":639321,"date":"2026-07-22T02:35:00","date_gmt":"2026-07-22T02:35:00","guid":{"rendered":"https:\/\/buglecall.org\/?p=639321"},"modified":"2026-07-22T02:35:00","modified_gmt":"2026-07-22T02:35:00","slug":"data-centers-were-responsible-for-46-of-pjms-last-four-capacity-auction-costs-3","status":"publish","type":"post","link":"https:\/\/buglecall.org\/?p=639321","title":{"rendered":"Data Centers Were Responsible For 46% Of PJM’s Last Four Capacity Auction Costs"},"content":{"rendered":"

Data Centers Were Responsible For 46% Of PJM’s Last Four Capacity Auction Costs<\/span><\/p>\n

\n

By Ethan Howland of UtilityDive<\/a><\/em><\/p>\n

Data centers are responsible for $6.3 billion, or 38%, of the $16.4 billion in charges from the <\/span><\/span><\/span><\/span><\/span><\/span>PJM Interconnection\u2019s just-held capacity auction<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>, Joseph Bowring, president of Monitoring Analytics, said in an email to Utility Dive. Monitoring Analytics is the grid operator\u2019s independent market monitor.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

\"\"<\/a><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

In PJM\u2019s last four base capacity auctions, data center-driven capacity charges totaled $29.4 billion \u2014 46% of the $63.6 billion in total capacity charges in that period<\/strong>, Bowring said. Monitoring Analytics plans to publish its analysis of the most recent auction in a few weeks, he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

PJM isn\u2019t fully grappling with the ramifications of data center development, according to Bowring. \u201cPJM is continuing to act like it\u2019s business as usual,\u201d he said in an interview on Friday. \u201cYou have to open your eyes and recognize that it is really a paradigm shift, and failing to do that imposes costs on other customers.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

Ratepayers in PJM are not only paying capacity charges for existing and potential data centers, they are paying for higher energy and transmission costs data centers have caused, according to Bowring.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

PJM\u2019s capacity auctions and the price of electricity has become a major political issue in the grid operator\u2019s footprint, which includes 13 Mid-Atlantic and Midwestern states and the District of Columbia. In September, <\/span><\/span><\/span><\/span><\/span><\/span>governors from PJM states formed a collaborative<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> to advocate for their interests with the grid operator.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

On March 4, <\/span><\/span><\/span><\/span><\/span><\/span>Google, Meta, Microsoft and other data center companies<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> pledged at the White House that they would protect consumers from price hikes due to data center energy and infrastructure requirements.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

However, meeting that pledge is impossible in PJM under its current rules, according to Bowring.<\/strong><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

\u201cThere\u2019s only one way to do what hyperscalers agree is the right thing to do, and that is to run a separate auction,\u201d Bowring said. \u201cThat\u2019s good for the hyperscalers \u2026 because it allows them to get capacity and be served reliably, and it\u2019s good for other customers because it separates out the impact from the data center.\u201d<\/strong><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

First, data centers and other large loads should contract for their own generation, according to <\/span><\/span><\/span><\/span><\/span><\/span>a proposal the market monitor made<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a> last month as part of PJM\u2019s fast-track stakeholder process for a backstop reliability auction. For those that can\u2019t bring their own generation, PJM should hold separate auctions to procure their capacity supplies under 15-year contracts, Bowring said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

PJM buys capacity ahead of time \u2014 normally three years in advance \u2014 based on its demand forecast. However, it is unclear exactly how much data center load will materialize, adding uncertainty to the forecast.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

While PJM has tried to make its data center forecasts more accurate, there is growing opposition to data centers<\/a> across the United States, with some major projects getting canceled,\u00a0<\/span><\/span><\/span><\/span><\/span><\/span>Morningstar DBRS said in a report released Monday.<\/p>\n

\u201cAs states consider new taxes, restrictions, and moratoriums on data center growth, escalating stakeholder opposition could become a material credit factor, potentially weakening data center project credit quality by reducing development visibility, increasing regulatory risk, and challenging assumptions around the pace and certainty of future AI-driven capacity expansion,\u201d the credit ratings agency said.<\/p>\n

Under Monitoring Analytics\u2019\u00a0auction proposal, removing data centers \u2014 and the uncertainty around their future loads \u2014 from the base capacity auction ensures ratepayers won\u2019t pay for unneeded capacity.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

PJM\u2019s board is developing a backstop auction proposal for data centers that it aims to file with the Federal Energy Regulatory Commission this month so the auction can take place in September.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

Under a plan that received the most support in the stakeholder process, utilities and other load-serving entities, and potentially data centers themselves, would ask PJM to buy a specific amount of capacity in a one-time auction. PJM staff proposed that it would procure in a one-time auction the shortfall from its last base capacity auction \u2014 about 6.8 GW.<\/strong><\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 07\/21\/2026 – 22:35<\/span><\/p>","protected":false},"excerpt":{"rendered":"

Data Centers Were Responsible For 46% Of PJM’s Last Four Capacity Auction Costs By Ethan Howland of UtilityDive Data centers are responsible for $6.3 billion, or 38%, of the $16.4 billion in charges from the PJM Interconnection\u2019s just-held capacity auction, Joseph Bowring, president of Monitoring Analytics, said in an email to Utility Dive. Monitoring Analytics… Continue reading Data Centers Were Responsible For 46% Of PJM’s Last Four Capacity Auction Costs<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":639298,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[17,22,13],"tags":[],"class_list":["post-639321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-border-security","category-immigration","category-immigration-reform","entry"],"_links":{"self":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/639321","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=639321"}],"version-history":[{"count":0,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/posts\/639321\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=\/wp\/v2\/media\/639298"}],"wp:attachment":[{"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=639321"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=639321"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buglecall.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=639321"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}