• THE GRID
The 41% Split
I was reading the EIA's October energy outlook when one line stopped me.
Wholesale electricity prices in PJM — the grid that covers 13 states and 67 million people — are set to jump 41% this year.
I scrolled further. The Pacific Northwest? Prices there are falling 23%.
Same country. Same report. Same year.
|
PJM Wholesale Prices
+41%
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Pacific NW Prices
−23%
|
|
|
U.S. Avg Wholesale
$52/MWh
|
2026 Generation
4,368 TWh
|
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The national headline looks tame. Wholesale power averages $52 per megawatt hour across the U.S. in 2026. That's 11% above 2025. The EIA points to weather. Winter storm Fern. A hot summer.
But weather doesn't create a 64-point gap between two regions. Something structural does.
Data centers.
PJM is the heart of the AI buildout. Virginia. Pennsylvania. Ohio. Michigan. The servers pull power around the clock. They never throttle back. They never take a maintenance break.
And when the grid tried to take one this week, it nearly broke.
"This order will help ensure millions of American families and businesses across the mid-Atlantic have access to affordable, reliable and secure electricity."
Secretary Wright signed an emergency order for PJM on October 12. An October heat wave caught the grid mid-maintenance. Sixty-one thousand megawatts offline. Reserves within 900 MW of the margin.
The Northwest doesn't face this. Hydro. Wind. Far fewer data centers. Its prices are dropping.
Two halves of the American grid. Moving in opposite directions. For utilities in PJM, the 41% jump means more revenue, bigger rate cases, and more cash to spend. For families paying the bill, it means another squeeze.
This is what a structural repricing looks like. Weather bounces. Weather passes. A 41% surge driven by constant, always-on data center load doesn't reverse. It compounds.
And the load keeps spreading. DTE Energy in Michigan reported over 8 gigawatts of data center requests. Oracle signed a nuclear deal in Wisconsin. Google locked up power in Wayne County. The buildout has moved well beyond Virginia.
The EIA raised its generation forecast to a record 4,368 billion kilowatt hours this year — up 2.2% from 2025. Data centers and manufacturing drive nearly all of that growth.
Yet the national number hides the pain. It blends PJM's 41% spike with the Northwest's 23% decline and calls it 11%. Investors who watch only the average will miss the trade. The real story lives in the regional data.
The electricity market is splitting in two. Where the data centers land, prices surge. Where they don't, prices fall. That divergence is the most important signal in energy right now.
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• VOLTAGE
The World's First SMR Heats Up — in China
China loaded no fuel. It ran no turbine. But this month, it crossed a line the rest of the world hasn't reached.
The Linglong-1 — China's ACP100 small modular reactor — recently began hot functional testing at the Changjiang nuclear site in Hainan Province. Hot testing pushes the coolant to real-world heat and pressure. No fuel yet. Just proof the pipes, pumps, and valves can take it.
It's a 125-megawatt reactor. If it reaches commercial operation, it will be one of the first purpose-built SMRs to feed power to a grid. It was due in the first half of this year. It's late. But even late, China is years ahead of the rest.
Cold testing finished a year ago. Hot testing is the last big hurdle before fuel loading. The reactor will produce about 1 billion kilowatt hours a year — enough for over half a million homes.
Meanwhile, Czech utility ČEZ filed an environmental review last week for a Rolls-Royce SMR at Temelín. The plan: up to 3 gigawatts across three sites. Ninety percent of each module gets built in a factory, not on-site. Rolls-Royce signed an early works contract with ČEZ in April. Europe is treating factory-built nuclear as a real answer to power demand.
In the U.S.? NuScale has fallen 87% from its peak. No American SMR is close to producing a single watt.
The global SMR race has a front-runner. It speaks Mandarin. And the market hasn't priced it in.
• WIRED IN
The Whole Chain Is Moving
Quanta Services set its Q3 2026 earnings release for October 29. The grid builder crushed Q2 with $9.56 billion in revenue — up 41% from a year ago. Adjusted earnings hit $4.24 a share, well above the $3.31 consensus. Two weeks until the next print.
One company fueling that demand pipeline: Oracle. It committed $300 million to absorb rising costs at Wisconsin's Point Beach Nuclear Plant. The deal with We Energies powers Oracle's data center with nuclear and shields over 1 million ratepayers from price hikes. Demand meets nuclear — and the ratepayer gets a break for once.
The demand keeps spreading. DTE Energy in Michigan reported a data center pipeline above 8 gigawatts. The utility proposed two new gas plants costing $6.4 billion to meet the load. Michigan is quietly becoming the next major data center state.
Those gas plants need fuel. Energy Transfer agreed to buy Vaquero Midstream for $2.63 billion, adding roughly 300 miles of gas gathering in the Delaware Basin. More pipes feeding more power plants.
Every link in the chain — pipeline, gas plant, nuclear reactor, transmission wire — is bidding up at once. The AI buildout isn't one trade. It's an entire supply chain.
