The largest US power grid is now cutting power to data centers during heat emergencies, and the operators who saw this coming built their own generation before the rules forced them to.
On June 30, with temperatures rising across the mid-Atlantic and a Department of Energy emergency order already in effect for emission relief through July 3, PJM Interconnection is managing the most consequential stress test yet for AI's relationship with the American power grid. The grid operator serving 67 million people across 13 states and Washington D.C. received federal approval on May 18 to curtail data centers and other large loads with backup generation as a last resort before rolling blackouts. It's already used that authority. The era of unlimited, unconditional power access for hyperscalers in the Eastern US is over.
The numbers behind that shift are stark. Capacity prices on PJM have gone from $28.92 per megawatt-day in the 2024/25 delivery year to $329.17 per megawatt-day in 2026/27, an 11-fold increase in two years. PJM's own Market Monitor found that data centers drove 63% of that increase in the 2025/2026 auction alone, translating to $9.3 billion in costs now being recovered from ordinary ratepayers in higher electric bills. Across three consecutive capacity auctions, the Market Monitor estimates data center demand added a combined $23.1 billion to capacity market revenues. Wholesale electricity on the PJM network averaged $136.53 per megawatt-hour in Q1 2026, up 76% from $77.78 in Q1 2025, according to market data. The grid math doesn't work anymore, and regulators have run out of patience.
PJM's framework is now brutally simple: if you didn't bring your own new power supply, you're the first to lose power when the grid is stressed. The board's January 2026 proposal made this explicit, establishing that data centers without co-located generation would be curtailed ahead of residential and commercial customers during emergencies. That's not a future threat. It's the operating policy that went into effect this summer. FERC, meanwhile, directed PJM to complete uniform interconnection rules for large loads of 20 megawatts or more, with action expected by the end of June 2026, covering how those loads connect to the transmission system and who pays for grid upgrades.
Frankly, the operators who are best positioned didn't wait for any of this. Talen Energy's restructured deal with Amazon Web Services, finalized in June 2025, is worth $18 billion over 17 years and delivers up to 1,920 megawatts of carbon-free electricity directly from the 2.5-gigawatt Susquehanna nuclear plant in Pennsylvania, with transmission reconfigurations completing in spring 2026. Constellation Energy's 20-year agreement with Microsoft reactivated Three Mile Island's Unit 1, an 835-megawatt plant that came back online in late 2024. Both deals were structured before PJM's curtailment authority existed in its current form. Both operators now hold something genuinely scarce: firm, carbon-free baseload power that doesn't depend on a congested grid.
That scarcity is the real competitive moat, and it's reshaping where AI infrastructure gets built. Power certainty has become the primary differentiator in data center site selection across the PJM region, displacing the older logic of cheap land, fiber proximity, or state tax incentives. A hyperscaler choosing between two otherwise equivalent sites in Virginia or Pennsylvania now has to weigh whether one of them comes with a power agreement that survives a summer curtailment order. The answer increasingly determines the deal.
The $100 Billion Bill Lands on Ratepayers
None of this resolves the underlying tension, which is that the costs of building out generation and transmission capacity to serve AI's appetite are being socialized across PJM's 67 million customers while the benefits accrue to a handful of technology companies. PJM projects data center demand will require over 30 gigawatts of new peak capacity by 2030. If current trends hold, consumers across the region could be paying more than $100 billion in cumulative additional electricity costs through 2033, per PJM's own estimates. Starting this June, ratepayers began collectively absorbing an additional $1.4 billion per year in capacity market costs driven primarily by data center demand.
Several PJM member states have already pushed back. A November 2025 stakeholder vote on new interconnection rules failed to reach the two-thirds threshold needed to pass, with utilities, consumer advocates, and data center operators unable to agree on who should pay for the new transmission the AI buildout requires. That impasse handed the question back to the PJM board and to FERC, which have been tightening the rules unilaterally ever since.
For AI startups and infrastructure investors, the lesson from PJM this summer is that the Eastern US power grid has shifted from an open-access utility into something closer to a constrained resource with explicit priority rules. Co-locating generation, whether nuclear, gas peakers, or eventually large-scale storage, is no longer a premium option for operators who want to avoid regulatory risk. It's the baseline for being an uninterruptible tenant on a grid that has now shown it will pull the plug.
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