Consumer Group Warns Data Center Demand Is Driving Record Power Prices

PJM Interconnection, the nation’s largest regional grid operator, announced Dec. 17 the results of its latest capacity auction, which determines how much consumers will pay power generators to ensure enough electricity is available during periods of peak demand. The auction set a price of $333.44 per megawatt-day for the 2027–2028 delivery year — the third straight year of record-breaking prices.

Capacity costs make up about 20 percent of the electricity supply price paid by customers of Commonwealth Edison and other utilities within PJM’s footprint, which spans 13 states and the District of Columbia and serves about 67 million customers. While ComEd has not yet announced how the new price will affect bills, consumer advocates warn the increase could significantly raise household costs in the coming years.

“This is the worst of all worlds for consumers,” said CUB Executive Director Sarah Moskowitz in a statement. “Customers are paying much more money while electric reliability actually declines, and existing generators receive a windfall.”

According to PJM’s Independent Market Monitor, rapid growth in proposed data centers — which require enormous amounts of electricity — is the primary driver behind the surge in capacity prices. Many of these projects are seeking to connect to the grid, while PJM’s interconnection queue remains clogged, delaying new power generation from coming online.

The recent auction again hit a temporary price cap negotiated by Pennsylvania Gov. Josh Shapiro, a cap that is set to expire after this auction. Without it, consumer advocates say prices could climb even higher in future years.

Capacity prices have risen sharply in just a few years. The price for the 2024–2025 period was $28.92 per megawatt-day. It jumped to $269.92 for 2025–2026, then climbed again to $329.17 for 2026–2027, before reaching the current record of $333.44.

The Natural Resources Defense Council estimates that without reforms, capacity costs across the PJM region could total $163 billion between 2028 and 2033. For northern Illinois alone, that could mean $21.4 billion in added costs, translating to an average household increase of about $70 per month by 2028.

CUB and other advocates are urging PJM and state regulators, including Illinois officials, to take swift action. Among their recommendations are extending the lower price cap, eliminating minimum price floors, fixing delays in the interconnection process, and improving forecasting so customers are not paying for “phantom” data centers that may never be built.

The group also argues that large data centers should bear responsibility for the costs they impose on the grid. Proposed reforms include requiring data centers to bring their own new clean energy supplies, operate with maximum energy efficiency, reduce demand during peak periods, and pay for local utility infrastructure upgrades through separate rate classes.

“Data center companies are among the wealthiest in the world,” Moskowitz said. “It’s unconscionable for everyday customers to foot the bill for their massive energy use.”

Without changes, CUB warned, the region could face both escalating electricity bills and a growing risk of rolling blackouts within the next several years, making grid reform a pressing issue for regulators and policymakers alike.