US Grid Cracks Under AI Demand with 22% Spike in Capacity Auction Pricing
America’s power grid just flunked its AI stress test, and consumers are footing the bill. Grid operator PJM Interconnection announced Tuesday that securing electricity supplies through its annual capacity auction will cost $329.17 per megawatt-day across 13 states and Washington, D.C. — a 22% jump from last year’s already eye-watering levels. Congratulations are in order for power producers, who are set to receive a $16.1B total payout from this ordeal.
- Power producers celebrated the auction results, with Talen EnergyTLN, NRG EnergyNRG, and Constellation EnergyCEG rising 8.2%, 4.3%, and 1.9%, respectively, yesterday.
- From the auction results, companies like Constellation, VistraVST, and Talen are set to earn $2.2B, $1.2B, and $805M, respectively.
Burning out: Exelon’s Calvin Butler warned that the latest capacity auction is driving up costs, with rising demand, shrinking supply, and aging infrastructure straining the grid. Last year’s 800% price surge had already pushed PJM and state governments to intervene, but it wasn’t enough. PJM’s Stu Bresler now says residential bills could rise up to 5% starting June 2026 — a sharp contrast to Trump’s pledge to cut energy costs by half, especially with prices already up 5.6% over the past year, per Labor Department data.