According to a report Tuesday by Monitoring Analytics, PJM's independent market monitor, the rapid expansion of data centers connected to the PJM Interconnection has resulted in a $9.4 billion increase in electricity costs. PJM Interconnection is the largest power grid operator in the United States, serving 65 million customers from Chicago to New Jersey. These increased costs will appear on consumer utility bills starting this month.

The report shows that the overall cost for procuring electricity supplies on the grid rose by 180%, reaching a record $14.7 billion. Without the growing demand from data centers, costs would have been closer to $5 billion. The largest cost increases occurred in Virginia and Maryland, where many data centers are located.

The surge in data center energy needs is the primary driver of tight supply and demand conditions, leading to higher prices in the PJM capacity market. The grid operator projects that summer peak power consumption could rise to 220 gigawatts within 15 years, exceeding both historical highs and current generation capacity.

These findings add to ongoing discussions about whether deregulated power markets can effectively manage rapid demand growth, integrate renewable energy, and maintain affordable and reliable service. At a recent industry event, Brian George, Google's head of global energy market development and policy, acknowledged that data centers are imposing significant costs on the grid.

Source: energyconnects.com