There isn’t enough energy for you and data centers
So who gets it?
Tuesday, January 6, 2025 — PJM Interconnection, the regional power grid operator, just published the results of its December Capacity Auction for the 2027-2028 year. Oh boy, it’s a doozy.
No surprise that the auction reached the price cap that PA Governor Josh Shapiro negotiated last year: $333.44/MW-day for a total of $16.4 billion bill for Pennsylvania. But the catch this time, the electricity producers (mostly gas plants) fell short of their energy reliability requirement. This means there is a risk that the electricity we need, particularly during winter storms or other extreme weather, might not be there. Pennsylvania is 6,629 MW short, so should we expect black outs?
Now for data centers—both existing and planned—we, PA households, are subsidizing their transmission costs and will be paying more for our own electricity for the foreseeable future.
Understanding the numbers
Expect your electricity bills to keep soaring each year. PJM stated its peak load for this auction was 5,250 MW higher than the 2026-27 auction—and it notes that 5,100 MW of this demand is projected data center usage. So, data centers appear to account for almost 77% of the projected electricity shortage.
PA households paid an additional $491.7 million to subsidize data center transmission costs in 2024. PennFuture anticipates this number will be higher in 2025.
The time to worry is now
Currently, there are no price caps for the auction scheduled for the 2028/29 auction. That auction will be this June.