America’s largest power grid is under strain, and its operators are passing on the costs to the consumer.
PJM Interconnection provides power to about 67 million Americans on the East Coast, servicing Illinois, Michigan, New Jersey, Ohio, Pennsylvania, and more.
Other states that rely on PJM’s power, like Maryland and Virginia, are also home to some of the biggest data centers in the country. These data centers, which often service large online companies that operate artificial intelligence programs and chatbots, are allegedly at the center of power price increases that PJM says might be here to stay.
‘Prices will remain high as long as demand growth is outstripping supply.’
PJM’s prices went up by 800% in 2024 after auctions proved the demand for power was greater than the supply. According to Reuters, prices for the power plants went from $28.92 per megawatt-day to $269.92 per megawatt-day.
“Prices will remain high as long as demand growth is outstripping supply — this is a basic economic policy,” said PJM spokesman Jeffrey Shields, per Reuters. “Right now, we need every megawatt we can get.”
While PJM blames outside sources, Pennsylvania Governor Josh Shapiro (D) has threatened that his state would abandon the power provider if it could not find a way to lower costs.
In June, Shapiro told Reuters that leaving PJM is definitely on the table, with the outlet reporting that according to over two dozen members of the industry (including power developers and regulators), PJM has made the situation worse by delaying auctions and pausing applications for new plants.
While the real answer is likely somewhere in between, PJM did stop processing new applications for power plants in 2022, all while the industry is revitalizing itself around them.
Last September, Microsoft announced it would reopen Pennsylvania’s Three Mile Island to power its data centers.
Amazon said in October it was building small modular nuclear reactors in Virginia for its cloud computing and AI.
Oracle also announced three reactors of its own, while the state of Texas announced $50 billion worth of nuclear upgrades in November.
It seems both facts are true: PJM is being outpaced by private industry, and the quest for power is indeed very real.
“We’ve been underinvesting in American power infrastructure for about 50 years due to bad industrial policy and environmental laws,” Isaiah Taylor, founder of Valar Atomics, told Blaze News.
“It’s a five-alarm fire,” the nuclear reactor manufacturer continued.
Taylor explained that energy demands in the United States have been kept low by exporting manufacturing power to China, while restricting power consumption domestically.
“Both have been terrible for America,” he said. “We now have a weakened industrial base, nerfed ‘energy efficient’ consumer products, and a 50-year-old grid.”
The Department of Energy agrees. A new government report analyzed by The Hill noted that 104 gigawatts’ worth of power will go offline by 2030. The report suggested that the annual outage time for consumers could increase from eight hours per year to a shocking 800 hours per year if the problem goes unaddressed.
“This report affirms what we already know: The United States cannot afford to continue down the unstable and dangerous path of energy subtraction previous leaders pursued, forcing the closure of baseload power sources like coal and natural gas,” Energy Secretary Chris Wright said in a statement to The Hill.
“In the coming years, America’s reindustrialization and the AI race will require a significantly larger [power] supply of around-the-clock, reliable, and uninterrupted power,” Wright added. “President Trump’s administration is committed to advancing a strategy of energy addition, and supporting all forms of energy that are affordable, reliable, and secure.”
The solution, according to Valar Atomics, is to rapidly deregulate and “unleash capitalism.”
So far, that solution has seemingly worked for private industry, even for states like Texas. On the East Coast, however, a nuclear nudge would need to come sooner rather than later.
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The post ‘A five-alarm fire’: AI is making your electric bill skyrocket — and you’re caught in the middle appeared first on TheBlaze.
