PANDORA’S BOX EVERYTHING GOT OUT. THE HOPE IS AT THE BOTTOM. |
THE ONE-WAY DOOR Why data center demand is showing up in household power bills One grid operator covers 13 states and Washington, about 67 million people. Its own market monitor has put a number on what the data centers added. |
About $16 a month. That is what Maryland’s Office of People’s Counsel estimated one auction result would add to a residential BGE bill. |
It put the same increase at about $18 in the Potomac Edison zone and about $14 at Pepco. |
Read those carefully. They are estimates, not billed totals. They cover an increase that began in June 2025. And they apply to residential customers in those Maryland zones only. |
Who else is exposed to the same mechanism. Anyone on the PJM grid. |
PJM Interconnection runs the power grid for 13 states and Washington. That is Virginia to Illinois, New Jersey to Ohio. About 67 million people live inside it. |
Once a year it runs something called a capacity auction. Capacity is not electricity. |
It is a payment to power plants for promising to be available on the day demand peaks. Customers pay it whether or not the plant ever runs. |
It reaches a household through the supply part of the bill, not the usage part. |
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Now the prices, with a baseline first. |
For the 2024 to 2025 delivery year, capacity cleared at $28.92 per megawatt day. Treat that as the comparison point. It is not one of the four auctions below. |
For 2025 to 2026 it cleared at $269.92. For 2026 to 2027, $329.17. For 2027 to 2028, $333.44. |
For 2028 to 2029 it cleared at $325, which was that year’s price cap. Lower than the year before, and still at the ceiling. |
| $29.4BN OF $63.6 BILLION, FOUR AUCTIONS, 2025/26 TO 2028/29 | → | The grade applies to that $29.4 billion, which is contracted. It does not say your whole bill can never fall again. |
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That figure comes from Monitoring Analytics, the independent market monitor PJM pays to watch its own market. |
Its estimate is that data center demand accounts for $29.4 billion of the $63.6 billion in capacity costs across those four auctions. |
The monitor describes that increase as irreversible. The word covers money already committed in auctions that have closed. |
It is not a forecast that electricity prices can only rise from here. |
Demand is not easing. Amazon’s Andy Jassy says AWS capacity is sold out for this year and largely booked for 2027. |
He adds that a good chunk of 2028 is gone too. |
There has been an attempt to change who pays. PJM filed a plan aimed at very large new electricity users, which it defines as 50 megawatts and above. |
They would have had to bring their own new generation, or be first in line to be cut off in an emergency. |
On October 9 the Federal Energy Regulatory Commission rejected most of that plan. |
Two pieces survived and took effect on October 12. The 50 megawatt definition, and a registry listing those users. Neither changes who pays. |
PJM is expected to file a revised version of a separate plan around October 29. A follow up filing on the rejected one is due in early November. |
On October 7 the Energy Department asked that the cost of serving new large users not be unfairly shifted onto existing customers. |
Separate what is settled from what is not. |
Those four auctions have cleared. The prices are set and the capacity is contracted. Nothing filed this month reaches them. |
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What is being argued now is the rules for auctions that have not happened. |
We are not going to name the delivery year an October filing would reach. PJM has been compressing its auction calendar, and the 2028 to 2029 auction already ran this July. |
Three honest limits before the move. Capacity is one line on a bill, not the bill. |
Retail rates are set by state regulators, so the same auction lands differently in Ohio than in Virginia. |
And fuel, transmission and weather move the same bill. A higher total on its own proves nothing about data centers. |
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EVERY LEAD PASSES BEFORE IT RUNS The One-Way-Door Test |
01 | Can it be undone? Not the four auctions that have cleared. The market monitor calls that $29.4 billion irreversible. | |
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02 | Who is already repositioning? PJM. A revised filing is expected around October 29, covering auctions that have not been held. | |
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03 | What does being late cost? Nothing on the bills already priced. The open question is the auctions still ahead of us. | |
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THE MOVE · TEN MINUTES, ONE NUMBER Put this October’s bill next to last October’s. The same month both times. Then compare the supply or generation charges, not the total. Many bills show no separate capacity line. If yours does not, call the number printed on it and ask where capacity costs sit in your supply charge. That is the question that gets a useful answer. A bigger total does not prove data centers caused it. Fuel, transmission and weather move the same bill. The supply charge is the only place the auction shows up. |
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ALSO GOT LOOSE TODAY | Trump signed an executive order on October 22 directing agencies to cut mortgage insurance and refinance costs. Freddie Mac had the 30 year fixed at 7.32 percent that week. | HOUSING |
| Moody’s held France’s credit rating steady as the country’s debt turmoil kept hitting markets. | WORLD |
| The Nasdaq fell 2.60 percent on Thursday to 26,009. Gold ended the week near $4,041 an ounce. | MONEY |
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WHAT’S LEFT AT THE BOTTOM You cannot vote on a capacity auction. You can read your own supply charge, and after ten minutes you will know what the last four did to it. WE WATCH THE BOX. |
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