Electricity demand from rapidly expanding data centers is expected to add approximately $6.3 billion to wholesale power costs across Maryland, 12 other states and the District of Columbia, according to an analysis of PJM Interconnection’s latest capacity auction.
PJM, which operates the nation’s largest regional electric grid, announced Tuesday, July 14, 2026, that its auction secured 138,318 megawatts of generating capacity and demand-response resources for the June 2028 through May 2029 delivery year.
The total value of the capacity cleared through the auction was $16.4 billion.
Joseph Bowring, president of Monitoring Analytics, PJM’s independent market monitor, estimated that approximately $6.3 billion of that amount was attributable to existing and projected data-center electricity demand.
The costs will ultimately be recovered from utility customers across the PJM territory, although the effect on individual electric bills will vary by state, utility and customer. Capacity charges are only one component of a retail electric bill, along with the cost of producing electricity, transmitting it across the grid and delivering it to homes and businesses.
PJM serves more than 67 million people in all or portions of Maryland, Delaware, Illinois, Indiana, Kentucky, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia, along with the District of Columbia.
The region includes Northern Virginia, which contains the world’s largest concentration of data centers. The facilities support cloud computing, online services and artificial-intelligence systems, but can consume as much electricity as small cities.
PJM said data centers continue to be added to the forecasts used to determine how much power the region will require during periods of peak demand.
“These auction results show that demand for electricity continues to grow faster than electricity supply,” PJM President and CEO David Mills said. “At the same time, PJM recognizes how this supply-and-demand imbalance impacts the reliability of the system and costs for consumers.”
Auction Reaches Federally Approved Price Cap
The auction’s capacity price reached the federally approved maximum of $325 per megawatt-day across the entire PJM region.
That price was approximately 2.5% below the $333.44-per-megawatt-day cap established for the previous auction. However, the lower figure does not mean the region’s underlying power-supply problem has been resolved.
PJM said price caps and floors can reduce volatility but do not create the additional power plants and other resources needed to keep pace with increasing demand.
Maryland Gov. Wes Moore’s administration said the cap prevented substantially higher auction costs and saved customers throughout the PJM region an estimated $13.3 billion.
Without the cap, the auction price could have increased further as utilities competed for a limited amount of dependable power.
PJM Falls Short of Reliability Requirement
Despite clearing more capacity than the previous auction, PJM fell 6,831 megawatts short of the amount it says is needed to meet its one-event-in-10-years reliability standard.
It marked the second consecutive auction in which PJM’s entire regional system failed to secure enough capacity to meet that requirement.
PJM was approximately 6,500 megawatts short during the previous auction for the 2027-2028 delivery year.
The shortfall does not necessarily mean the electric grid will experience blackouts. It means the system could operate with a smaller cushion of backup power and face greater risk during extreme heat, severe cold, unexpected power-plant outages or other emergencies.
PJM said the system is still expected to have a reserve margin of approximately 14.7% during the 2028-2029 delivery year.
The grid operator plans to seek approval from the Federal Energy Regulatory Commission to conduct a special backstop procurement in September in an attempt to obtain additional power resources.
Data Centers Driving Rapid Growth in Demand
PJM’s projected peak demand for the 2028-2029 delivery year increased by approximately 2,000 megawatts compared with the forecast used in the previous auction.
Although PJM did not attribute every additional megawatt to data centers, the grid operator said the auction continued a trend in which large data-center projects are being added to its demand forecast.
Monitoring Analytics has estimated that existing and projected data-center growth added more than $23.1 billion to capacity-market revenues during the three auctions covering the 2025-2026, 2026-2027 and 2027-2028 delivery years. When the estimated $6.3 billion from the latest auction is included, the cumulative effect approaches $30 billion.
The concern is not simply that data centers use large amounts of electricity. The facilities are being planned and connected faster than new generating facilities can be constructed and approved.
PJM has faced criticism from governors, consumer advocates and energy developers over delays in connecting new natural-gas plants, solar and wind projects, battery-storage facilities and other generating resources to the grid.
At the same time, older coal and other power plants continue to retire, reducing the amount of dependable generation available during periods of high demand.
Costs Will Not Appear Equally on Every Bill
The $6.3 billion estimate should not be interpreted as a separate data-center fee that will immediately appear on every customer’s monthly bill.
The auction purchased capacity for a one-year period beginning in June 2028. Utilities and electricity suppliers will determine how those costs are incorporated into future rates.
Some utilities own generation, purchase electricity through long-term contracts or use other arrangements that reduce their exposure to PJM’s auction price. Others are more directly affected.
State utility regulators will also review rate requests before certain costs can be passed on to customers.
However, consumer advocates warn that the auction results demonstrate that elevated electricity prices are likely to continue unless the region adds generating capacity or changes how the cost of serving large data centers is allocated.
PJM Considering New Rules for Large Power Users
PJM said it is pursuing several measures intended to increase electricity supply and prevent large new users from weakening grid reliability.
One proposal, known as “Connect and Manage,” would allow large customers such as data centers to connect to the system while agreeing to reduce their electricity use when the grid is under stress.
PJM is also developing a backstop procurement program, accelerating the approval of certain power projects and attempting to clear its backlog of proposed generating facilities.
The organization has also begun facilitating long-term agreements between large electricity users and power producers. Those contracts could require data centers and other major customers to directly support new power plants, energy-storage systems or demand-response resources rather than relying entirely on supplies financed through charges spread across all customers.
“All of these initiatives are critical to keeping the lights on while allowing states to protect their everyday electricity customers,” Mills said.
The latest auction secured a capacity mix consisting primarily of natural gas, nuclear and coal resources. Approximately 46% came from natural gas, 20% from nuclear plants, 18% from coal, 5% from demand response, 4% from hydroelectric facilities, 2% from wind, 2% from oil and 1% from solar.
PJM’s next capacity auction, covering the 2029-2030 delivery year, is scheduled for December.
The results will provide another indication of whether new generating resources are entering service fast enough to keep pace with the region’s expanding data-center industry — and whether households and businesses will continue paying a portion of the cost.
Governor Wes Moore Media Press Release on July 15th, 2026 – Governor Moore announced the PJM capacity auction results saved $13.3 billion for ratepayers across the region. Governor Moore secured the capacity market price cap after joining a coalition of governors from across the PJM region calling for urgent action to protect families and businesses from rising energy costs driven by explosive data center growth.
“Our administration refuses to allow corporations to pad their pockets while Marylanders shoulder the cost with no return on investment,” said Gov. Moore. “These savings are a direct result of our aggressive actions to make energy more affordable and put money back in the hands of hardworking families across our state – because no one should have to choose between paying their electricity bill and putting food on the table.”
The 2028/2029 Base Residual Auction (BRA) secured over 138 GW of generation to meet projected electricity demand for the PJM footprint, which covers Maryland, twelve other states, and the District of Columbia. The price was set at the administrative cap of $325/MW-day, which prevented $13.3 billion of excess costs for the region, which filters down to Maryland customers’ utility bills.
“Yesterday’s result demonstrates why state action is necessary to manage regional energy prices,” said Maryland Energy Administration Director Kelly Speakes-Backman. “We know that more still needs to be done as Marylanders face high energy bills this summer. That’s why we’re incentivizing new generation resources, modernizing the grid, and supporting energy efficiency for homes and businesses – even as we call for these PJM reforms, which will insulate against high costs and help control them in the first place.”
MEA continues to help implement landmark legislation passed by the Maryland General Assembly and signed by Governor Moore to reduce electricity costs. The Utility RELIEF Act is expected to lower residential electric and gas bills by hundreds of dollars per year. Maryland is among the most active states in the country on energy affordability in 2026.
Governor Moore has made energy affordability and reliability a defining priority of his administration. Over the past two years, the Moore-Miller administration has helped deliver hundreds of dollars in immediate relief to families struggling with utility costs across the state, including $200 million in direct rebates last year and $100 million in direct relief through the Utility RELIEF Act. Additionally, the administration is delivering longer term relief by helping to build new generation through a $100 million clean energy auction, reforms to protect ratepayers from paying for data center impacts, and the removal of unjustified utility incentives providing $20 million in ratepayer savings annually. Governor Moore also issued a December 2025 executive order to support energy affordability and address anticipated shortfalls in energy generation.
The governor remains a driving force behind the PJM Governors’ Collaborative. In May, the governor delivered remarks directly to PJM executives at their annual meeting, calling on the organization to take more accountability for how their actions have driven increased rates. In April, Governor Moore joined a coalition of governors from across the PJM region calling for urgent action to protect families and businesses from rising energy costs driven by explosive data center growth.
