How AI is driving up electricity prices across the US
PJM Interconnection, which keeps the lights on for 13 states and DC, is raising its capacity prices to $329.17 per megawatt-day for 2026-27—a noticeable jump from last year's $269.92.
The main reason? AI data centers are using way more electricity, pushing total payments to power generators to a record $16.1 billion.
Regulators set price floor and cap
To prevent wild price swings after a massive spike last year, federal regulators set a price floor of $177.24 and a cap of $329.17 per megawatt-day.
Thanks to these changes, some places like Baltimore are seeing lower wholesale rates compared to last year's peak.
AI-driven demand and slow grid upgrades
With AI ramping up demand, companies like Constellation are investing billions in new natural gas plants.
But because older plants are retiring and grid upgrades are slow, there's still not enough new capacity coming online—so high prices aren't going away just yet.