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PJM Capacity Costs Up 398%. The Monitor Calls It Irreversible.
Two consecutive PJM capacity auctions cleared at the FERC price cap, with Monitoring Analytics attributing $16.6 billion in added capacity revenue to data center load growth. FERC has not acted on the monitor's request to block new connections, and per Introl's modeling, the average household faces roughly $70 more per month by 2028.
PJM's wholesale electricity price hit $136.53 per megawatt-hour in Q1 2026, up from $77.78 a year earlier, on demand growth the grid was never built to absorb.
Capacity costs drove most of the increase. Monitoring Analytics' Q1 State of the Market report found the capacity component of PJM bills rose 398% year over year. In the 2024/2025 delivery year, the capacity auction cleared at $28.92 per megawatt-day; the following year jumped to $269.92 before the last two hit the FERC cap.
The last two Base Residual Auctions, for the 2026/2027 and 2027/2028 delivery years, cleared at the FERC-approved cap: $329.17 per megawatt-day and $333.44. Monitoring Analytics attributed $16.6 billion in additional capacity revenue across both auctions to data center load growth specifically. Per Introl's modeling, households face roughly $70 more per month by 2028.
The 2027/2028 auction cleared just 774 megawatts of new generation and uprates against 5,250 megawatts of new load forecast, nearly all from data centers. Total capacity procured fell 6,623 megawatts short of PJM's reliability standard, the first time the entire grid has missed it.
PJM paused new generator applications in 2022, at peak data center expansion. The resulting interconnection backlog kept Three Mile Island's restart from full grid delivery rights until 2030. The capacity shortage now showing up in prices is the four-year result.
"The price impacts on customers have been very large and are not reversible," Monitoring Analytics wrote. Near-term costs "will be even larger...unless the issues associated with data center load are addressed in a timely manner."
Pennsylvania Governor Josh Shapiro threatened publicly to pull the state from PJM if prices keep rising. AEP chairman and CEO Bill Fehrman raised leaving the grid as a possibility on the company's May 6 earnings call, citing delays connecting new generation in PJM.
What the Monitor Is Asking For
Monitoring Analytics filed a complaint with FERC in November 2025, asking that data centers be barred from connecting to the grid unless PJM can reliably serve them. FERC Chair Laura Swett has not ruled on the complaint. The commission did separately direct PJM in December 2025 to establish new transmission services for data centers that generate their own power on site.
That December order lets co-located data centers reduce how much they draw from the shared transmission grid. It does not address the load already on the system, or the auctions that cleared at the cap before the order existed.
The cap-clearing auctions reveal a cost structure locked in 2022, when PJM froze generator applications and the data centers kept coming. The deferred cost now runs through every household bill in a 13-state grid.
PJM's 2028/2029 Base Residual Auction is scheduled for June 2026. If it clears at the cap a third consecutive time, the question shifts to whether FERC raises the ceiling for the following delivery year, and at what price.