What caused PJM to pay up to $28,000 per megawatt for electricity balancing during last week's heat wave?

According to the news, the $28,000-per-megawatt price spike occurred due to a combination of surging electricity demand from extreme heat-driven air conditioning use, an all-time record unrestricted peak load of 168 gigawatts, reserve deficits, and massive congestion on transmission lines supplying power to greater Baltimore, Delaware, and northern Virginia — home to the world's largest data center hub.

How do these extreme balancing costs affect electricity consumers in PJM's region?

These costs are 'ultimately passed on to homes and businesses through electricity bills', as stated in the body; PJM spent $217 million on regulation service in the first quarter — up 215% year-over-year — and capacity prices have risen over 1,000% since 2024, imposing 'billions of dollars in additional costs on customers'.

Largest US Grid Paid Up to $28,000 Per Megawatt to Balance Electricity During Heat Wave

Jul 9, 2026

PJM paid up to $28,000 per megawatt to balance electricity during a heat wave, exposing grid strains from overloaded lines and surging data-center demand. Costs spiked over 100 times the average, imposing billions in additional costs on customers.

reuters

2026-05-20

US Power Firms Rally as PJM Accelerates Data-Center Grid Connection Timeline

2026-07-09

Largest US Grid Paid Up to $28,000 Per Megawatt to Balance Electricity During Heat Wave

Largest US Grid Paid Up to $28,000 Per Megawatt to Balance Electricity During Heat Wave

FAQ