What PJM's Monitor Called Irreversible Is Now on Customer Bills

Monitoring Analytics told regulators May 15 that wholesale power prices on the nation's largest grid, up 76% year-on-year to $136.53 per megawatt-hour, will not come back down.

Monitoring Analytics published its Q1 2026 assessment warning that "price impacts will be even larger in the near term" unless data center load issues are addressed. Data centers drove 63% of the 2025/2026 capacity price increase, and across PJM's last two delivery auctions, data center load added $13 billion in customer costs.

The December 2025 base residual auction cleared at $333.44 per megawatt-day, the FERC-approved ceiling for both delivery years spanning 2026 through 2028. PJM's own no-collar simulation shows the unrestrained clearing price would have been $529.80 per megawatt-day.

Multiply 134,479 megawatts by $333.44 per day by 365 days: $16.4 billion in annual capacity obligations committed in a single auction. Ratepayers absorb the majority of that total; self-supply and bilateral contracts reduce individual exposure but do not eliminate it.

Constellation Energy cleared 17,950 megawatts at the capped price and will collect roughly $2.2 billion in capacity revenue for the 2027/2028 delivery year.

The grid came up 6,625 megawatts short of its reliability target at December's auction, the first time PJM has missed the one-in-ten-year reliability standard. Most of the demand projection driving that gap came from data centers not yet built. Monitoring Analytics called those load forecasts unprecedented in their uncertainty.

AEP Considers the Exit

AEP operates in five PJM states, Ohio, Indiana, Michigan, West Virginia, and Virginia, and has secured 16 gigawatts of contracted new large load in the region, more than twice the shortfall December revealed. CEO Bill Fehrman used the May 6 earnings call to say the utility is weighing whether to leave PJM, pointing to a generation interconnection backlog the grid cannot clear at its current pace.

PJM paused interconnection applications in 2022, later reopened the queue to more than 800 requests totaling 220 gigawatts, and has not cleared the backlog. The same ceiling that pushed xAI to run 46 trailer-mounted turbines in Memphis without air permits is what Fehrman named as structural. "If something is not done now," he said, "I expect we could still be having these same conversations in 10 years."

Back-to-back cap clearings change the math on every investment decision in PJM's queue. The $196-per-megawatt-day gap between the FERC ceiling and PJM's own no-collar simulation is what new generators would need to justify committing to a queue already 6,625 megawatts short. Regulators erased it.

The 2026/2027 delivery year begins June 1, with $329.17 per megawatt-day in capacity charges flowing to those 67 million ratepayers. Watch for an AEP exit filing, which would force FERC to rule on whether a grid that missed its first reliability target can hold its membership structure.