The Numbers First

Wholesale electricity prices on the PJM Interconnection — the largest grid in the U.S., covering 13 states from Illinois to New Jersey — hit $136.53 per megawatt-hour in 2025. That's up from $77.78 the year before. A 76% increase in one year.

Monitoring Analytics, PJM's independent market monitor, published those numbers on May 14, 2026, according to TechCrunch. The watchdog did not mince words: "The price impacts on customers have been very large and are not reversible."

NERC Rings the Loudest Alarm Bell It Has

A week earlier, on May 8, 2026, the North American Electric Reliability Corporation — the federal watchdog overseeing grid reliability across the U.S., Canada, and parts of Mexico — issued a Level 3 Essential Action Alert. That's the highest alert level NERC has. According to Business Insider, this was the agency's third warning about data centers in nine months, but the first to hit Level 3.

NERC's finding: AI training workloads, crypto mining operations, and large data centers are causing sudden, massive power swings that happen in seconds. Grid operators have, per NERC's own language, "little or no room for real-time responses."

The agency told grid operators to file risk mitigation plans by August 3, 2026.

What Is Actually Causing This

AI workloads don't consume electricity at a steady rate. They spike. They crash. They do it fast. When a massive data center suddenly dumps or draws hundreds of megawatts in seconds, it sends shockwaves through the grid.

Northern Virginia — the densest concentration of data centers on the planet — sits squarely inside the PJM grid. Monitoring Analytics was direct: without surging data center demand, "the capacity market would not have seen the same tight supply-demand conditions, the same high prices observed." According to TechCrunch, the watchdog added that "the current supply of capacity in PJM is not adequate to meet the demand from large data center loads and will not be adequate in the foreseeable future."

PJM Made This Worse

In 2022 — right as data center construction was accelerating — PJM paused all new applications for generating sources. A backlog prompted the freeze. PJM only recently started accepting new requests again.

Monitoring Analytics also called out PJM for lacking transparency in decision-making and for delaying critical software upgrades "by multiple years" with "no firm expected implementation date."

PJM released a white paper suggesting three paths forward. One of the region's biggest utilities, AEP (American Electric Power), rejected all of them and has threatened to leave the PJM grid entirely, according to TechCrunch. Monitoring Analytics also rejected PJM's white paper, accusing the grid operator of using the crisis "as a pretext" for dismantling the existing market structure. The watchdog said the core market design "remains robust" — the problem is mismanagement, not the architecture.

The Institutional Breakdown

The core failure here is regulatory and institutional. PJM had years of lead time and froze new generation applications during the most critical window. NERC has now issued three warnings in nine months without forcing action after the first two. Grid operators lack basic processes to handle computational loads.

This is also a fiscal matter. Wholesale prices up 76% eventually hit consumers. Businesses pass costs through. Working families in the mid-Atlantic and Midwest are already paying for a problem created by trillion-dollar tech companies building AI infrastructure without accountability for grid impact.

What Happens Now

NERC's August 3 deadline for mitigation plans is a starting point, not a solution. Filing a plan differs from fixing the grid. With PJM years behind on software upgrades and AEP threatening to exit, the immediate outlook is uncertain.

Monitoring Analytics said price impacts "will be even larger in the near term" unless data center demand issues are addressed quickly. Prices are expected to climb. Grid reliability is expected to decline.

Every AI query, every crypto transaction, every model training run draws on a grid built for a different era. The infrastructure bill is coming due — and it won't be paid by the companies that created the problem.