Source: Fortune
Summary
PJM Interconnection, the largest grid operator in the US, announced its capacity auction for 2028-29 cleared at $325 per megawatt-day, the maximum allowed under its price cap. This is the third auction in a row to hit the ceiling, indicating a squeeze on the grid. Data centers are driving demand growth, with about $6.3 billion in total capacity charges directly attributable to data center demand. Moody’s Ratings has flagged that the cost of building new supply is being borne by all customers, rather than the new entrants.
Our Reading
The numbers tell one story. PJM’s capacity auction for 2028-29 cleared at $325 per megawatt-day, the maximum allowed under its price cap. Data centers are driving demand growth, with about $6.3 billion in total capacity charges directly attributable to data center demand. Moody’s Ratings has flagged that the cost of building new supply is being borne by all customers, rather than the new entrants. The cost of building new power plants to serve data centers is being spread across every household and small business on the grid. Someone is paying for the AI revolution’s power hunger, and increasingly, it isn’t the companies building it.
Author: Evan Null
