What caused the record $1 billion in uplift payments to power plants on the PJM grid in Q1?

The record $990 million in uplift payments was driven by a winter cold snap—specifically Winter Storm Fern in January—that caused spot natural gas prices to spike above $100 per million British thermal units (mmBtu), far exceeding the monthly average of less than $8/mmBtu; this forced PJM to compensate power plants for fuel costs they couldn’t cover through wholesale electricity market revenues, even though those plants were dispatched to maintain reliability during extreme demand, low temperatures, and higher-than-usual generation outages.

Why are these uplift payments significant for consumers and grid reliability?

These payments will ultimately be borne by ratepayers through their power bills, highlighting growing instability on an aging grid struggling to meet surging demand—especially from AI-driven data centers—while PJM’s reserve margin is nearly 40% below its target; analysts warn this reflects a fundamental mismatch between rapidly growing load and the pace of new supply infrastructure, increasing vulnerability to extreme weather, outages, transmission congestion, and fuel disruptions.

US Grid Pays Record $1 Billion to Loss-Making Power Plants in Q1

May 20, 2026

PJM Interconnection paid nearly $1 billion in uplift credits to cover power plant losses during a winter cold snap that spiked natural gas prices. Analysts warn this signals grid instability due to surging data center demand and aging infrastructure.

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US Grid Pays Record $1 Billion to Loss-Making Power Plants in Q1

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