The biggest US power grid is under strain from AI - and no one is happy

PJM Interconnection, the independent grid operator that serves 13 states and the District of Columbia in the eastern United States, manages electricity delivery for roughly one in five Americans. Its territory wraps around Northern Virginia's Data Center Alley, one of the densest hyperscale corridors anywhere in the world. Facilities built for AI training and inference have driven peak demand far above the trajectory utilities planned for three years ago.

PJM has unveiled a reform package that rewires its capacity market. The plan accelerates investment in new transmission lines, offers extra incentives to delayed generators and queues data center interconnection requests. After capacity prices jumped roughly tenfold at the previous auction, household concerns about hundreds of dollars in additional yearly bills became concrete.

Regulators in New Jersey, Maryland and Pennsylvania argue PJM's governance structure shifts data center costs onto residential ratepayers. Environmental groups worry the overhaul will postpone the retirement of natural-gas plants. Generators counter that new wind and solar projects sit in the interconnection queue for years. PJM's chief executive has pledged to deliver the redesign by early 2027.