Data centers are responsible for $6.3 billion, or 38%, of the $16.4 billion in charges from the PJM Interconnection’s just-held capacity auction, Joseph Bowring, president of Monitoring Analytics, said in an email to Utility Dive. Monitoring Analytics is the grid operator’s independent market monitor.
In PJM’s last four base capacity auctions, data center-driven capacity charges totaled $29.4 billion — 46% of the $63.6 billion in total capacity charges in that period, Bowring said. Monitoring Analytics plans to publish its analysis of the most recent auction in a few weeks, he said.
PJM isn’t fully grappling with the ramifications of data center development, according to Bowring. “PJM is continuing to act like it’s business as usual,” he said in an interview on Friday. “You have to open your eyes and recognize that it is really a paradigm shift, and failing to do that imposes costs on other customers.”
Ratepayers in PJM are not only paying capacity charges for existing and potential data centers, they are paying for higher energy and transmission costs data centers have caused, according to Bowring.
PJM’s capacity auctions and the price of electricity has become a major political issue in the grid operator’s footprint, which includes 13 Mid-Atlantic and Midwestern states and the District of Columbia. In September, governors from PJM states formed a collaborative to advocate for their interests with the grid operator.