> Based on actual auction clearing prices and quantities and uplift MW, inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenue for the 2025/2026 BRA, the 2026/2027 BRA, and the 2027/2028 BRA of $23,100,955,341.
This is the increase in revenue to PJM from adding datacenter customers, and includes both the amount that datacenters paid as well as the amount that other customers paid due to higher prices from datacenters. So Fortune calling it an increase to "the public" means that they didn't read the report they are using as their source and are probably just repeating what they thought someone else meant.
Bloomberg in the past worded it as "data centers will add at least $23 billion to customer bills" in April and "added a minimum of $23 billion to customer bills" in February. Which while technically correct (datacenters are customers) seems meant to be misleading. And now that's the number that's getting thrown around as the increase to "the public".
The part I don't get is that the journalists could just give the actual number for the quantity that they are referring to (the amount that non-datacenters paid due to higher rates due to datacenter loads): when I calculated it a few months ago I think it was something like $16 billion rather than $23 billion. I feel like the story would have the same impact if the headline number was $16B as $23B, but $16B has the benefit of not being a misrepresentation of the situation.
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Also I would definitely recommend checking out the PJM BRA report. It's a bit dense but not too hard to follow, and my personal takeaway was that the PJM market is just very dysfunctional and they are blaming the datacenters instead. I thought SemiAnalysis had a good analysis of it: https://newsletter.semianalysis.com/p/are-ai-datacenters-inc...
With this, we pay extra to lose our jobs.
https://www.anthropocenemagazine.org/2025/04/new-study-compa...
Not the political hill to die on
Or did I read this wrong and somewhere it said only datacenters running inference or training for LLMs?
Compare this to most of Europe (and Texas if I understood correctly) where the detacenters buy their electricity from the same market as everyone else (in Europe the spot market or futures) meaning they effectively pay the same price as everyone else.
It’s when they do some back room deal with the local public utility to get 50% off and offload the real costs to the public when people get angry.
Okay but this is a policy choice. It doesn’t have to be that way.
All those costs go into the price of the houses built there.
And this is also part of why building "affordable" houses rarely happens. All the infrastructure costs the same whether the houses cost $100K or $1 million.
Always wondered why the county didn't require the road work, or money for it, up front.
You know what you do if you want an affordable car? You buy used. I think most people understand Ford is never going to build another a car that costs $10k brand new, and the last new car near that price barely sold because it was so stripped.
When everything is built huge you don’t end up with homes that are cheap to heat, cool, or maintain. That’s why building affordable houses is actually a real issue.
What’s really dumb is the average number of people living in a house has tanked over time but the median new home just keeps getting larger. In an efficient market you’d expect new homes to match what buyers want, but regulatory capture has severely distorted the market.
So if you have a big family or multigenerational needs then often you have to do significant remodeling or sell anyway.
And the car analogy is n9t fitting, unless we talk about cars bundled with the parking spot. But then they would not depreciate that much, and the banger with a parking spot in Manhattan would cost more than the Ferrari that could only park in shitsville.
But in reality neither has to depreciate, just stop growing at these insane rates. Below the cost of inflation, until the average worker can afford a home again.
Do you really need a conspiracy by "moneyed interest" when the general public is perfectly happy to support similarly bad policies like rent control?
Grid upgrade costs are frequently socialized onto existing customers, especially for larger upgrades. Your central premise that interconnect charges cover everything is false.
But, if it turns out to be a reward, people will revolt that for-profit company is making excess profit from something as basic as utilities.
> "concluded that expected power demand from data centers was _a_ primary reason for $23 billion in customer price increases "
Also, it's weird that he describes PJM as "the organization that monitors the PJM market" when they describe themselves as "a regional transmission organization (RTO) that coordinates the movement of wholesale electricity" [0]. So are they monitors of the market or are they the market themselves?
I don't know... maybe I'm being picky, but the article just seems off. The whole bit about how data centers could maybe game the system by using less power during peak times also doesn't make sense - that's when they also have the highest demand. Pointing to cryptominers just makes me think he doesn't get what they do, which is basically arbitrage. Of course they stop when power costs go up, it eats up all of their profits and they can simply start back up when the costs go down.
You also had the de-industrialization of the US happening at the same time, which also took pressure off the transmission grid.
We basically had a few things offset population growth to allow us to use our grandparents electric grid investments for far beyond their expected lifetime. We’ve finally just caught up after a free ride over the past 4-5 decades.
I overall agree with you strongly, just surprised that more efficient lighting would have that much impact on grid demand.
I will note- the actual generation is left to market economics. I have much more faith in that working out equitably than regulating the grid. Even so, they've had significant consumer level grod connection fee increases- which I think reflects the end of various easy houshold effeciency gains (eg: incandecent -> CFL -> LED, P4 -> 14th gen, and HVAC. mainly lighting) and privatized profits more than anything.
$18B to provide redundancy and not have to require schools and local government to limit electricity use and provide a bit more slack in the powergrid is a burden that all the users get to share. Lucky them. Yes, all users benefit, but lucky break for those datacenters, getting all that redundancy for power, without a $500M/ea bill.
It's not a huge power multiplier (P = VI, so linear), but in principle I do love the idea that if you are going to have these massive transmissions lines we ought use the conductor well, at good high voltages.
China has been doing 1MV and 1.1MV lines for a while now, which is so excellent to see. https://www.bbc.co.uk/future/article/20241113-will-chinas-ul... https://en.wikipedia.org/wiki/Ultra-high-voltage_electricity...
And I mean this as in, local government ostensibly representing the community are also the land owners and contractors selling to developers, who can't be voted out of office until next year at the earliest and whose contracts and permits can't be revoked by a subsequent administration.
How exactly are you supposed to stop that?
The total revenue for electricity generation was $514b in 2024. So this was a 4-5% increase in costs. And if it is being invested in better generation and our aging infrastructure, that seems fine.
Like, don't get me wrong, if we want to start talking about more centralized organization of the economy that operates on the calculated total benefit it provides to people in general, I am personally all for that. But something tells me that is not quite the argument you are wanting to make here, right?
If you mean from 4% to 8%, then that's actually raising by 100%
…spread over an entire country.
I can't find anything breakdown in the article. But from what I have heard, you either live somewhere with a high concentration of new data centers and see a massive price increase of as much as 50%, or more likely you don't see any increase at all.
Overview article with links to actual studies: https://cityjournal.substack.com/p/data-centers-arent-raisin...
Also IMHO, we are building way too many data centers right now. It reminds me a lot of the Y2K dot.com crash, and all of the residual dark fiber.
I spotted this article today that claims it's all in our imagination.
https://www.city-journal.org/article/data-centers-arent-rais...
Perhaps I'm just spoiled because I live in the PNW, where are best use for overcapacity was to ship power off to California. But in the past, cheap hydro attracted aluminum production that then attracted also attracted a whole airplane production industry.
I think most people are just debating whether the extra demand generated by AI is worth it, they weren't necessarily debating the same thing when it came aluminum or airplane production (albeit in the 1930s).
https://en.wikipedia.org/wiki/Tax_abatement
(Yes, in general, they'll pay some tax. Some. But they also add a wide variety of direct and indirect expenses, both fiscal and social.)
When my apples are expensive, I don't generally grumble about all the demand from pie makers. If they demand more apples, new suppliers should come in to restore the price, right?
If the answer to these questions was yes, yes, and yes then I think you would grumble.
[1] or whatever other "superfood" that explodes in popularity
It’s really just a question of saliency.
They just run to the local store after manually grinding it in their machines, and get peanuts for a bag that would sell for >$100 in the US.
https://www.investigate-europe.eu/posts/big-tech-data-centre...
https://www.politico.eu/article/europe-choose-ai-climate-goa...
I'm 100% on board with charging data centers more for their power usage. They can afford to pay the extra costs. They would much rather pay in dollars vs. in time.
PJM’s market monitor estimates data-center demand added $23.1 billion to regional wholesale capacity costs across three delivery years through 2028.
Oregon approves PGE’s 29.7% rate hike for data centers under landmark law
https://www.opb.org/article/2026/07/07/oregon-data-center-ge...
The problem is, there are insane and dumb regulatory barriers to adding power plants or interconnects. THESE ARE THE SAME PROBLEMS FACTORIES FACE WHEN RESHORING PRODUCTION, you should treat datacenters as the face of reindustrialization. Instead of complaining about using resources, we need to focus on solving our inability to provide infrastructure needed to support economic growth.
More jobs is good, but if we're going to look at this through the lens of industry returning, it's a lousy return, even before factoring in that we probably lost a lot more factories than we're gaining datacenters.
But local negative impact on community is not remotely comparable to most industrial development. Everything from traffic, noise, pollution, etc. A few bad projects aside, these things are glorified warehouses typically sited in suburban industrial parks or the middle of nowhere.
It all really just comes down to the electricity needs they demand. Otherwise it’s about as close to as free money to a community as you can get.
The most problematic thing to me with this whole deal are local tax abatements. Those should be outright illegal though for any development.
Yeah. I'm going to need a source on this claim.
Pretty much no facility operator wants to also pay for and operate their own power plant. They are small and expensive to operate compared to combined cycle natural gas or other sources, and lack of access to a wider grid means even more additional expenses like a additional on-site redundancy.
If they could simply pay for grid interconnect that is ready by the time facility construction is completed they would do so, in the vast majority of cases.
The money is in getting things online ASAP. Builders are effectively throwing unlimited buckets of money at all aspects of these builds at people who can get shit done fast. Power interconnect would be no exception.
I think folks have become numb to these huge numbers being thrown around in terms of how large this investment cycle/bubble is. Those numbers mean real things - like operators writing basically blank checks to jump the queue on networking equipment, wiring harnesses, etc. Those in the industry who are not these giant hyperscalers are kind of shut out of everything from cabling, network gear, HVAC, optics, etc. For any price - since our volumes are a joke compared to these huge contracts. There is a reason you see unprecedented margins for every company selling critical parts and equipment for these builds.
Heck, standard power cables have gone up about 8x in cost on us in the past 12mo. It’s been crazy to watch and hear from suppliers how they give insane quotes to these companies which get approved same-day.
It’s all a giant race, cost is currently not a primary concern if money can be used to speed anything up.
Absent regulation, every operator would happily do the same thing to make the problem go away.