THE GRID
The Ten-Times Jump
$329.17.
That's what utilities paid to reserve one megawatt of power per day in PJM's latest capacity auction.
A year ago, the same auction cleared at $28.92.
One year. Ten times higher.
I've been watching capacity markets for a while. A move like this gets my attention.
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PJM runs the grid for 65 million Americans across 13 states and D.C. When its capacity prices spike like this, the market is delivering one message. Power is getting scarce.
Data centers are the main driver. U.S. data center demand is now pegged at 41 gigawatts for 2026 — up from 31 GW in 2025. That's 10 gigawatts of new demand in a single year. The grid has never had to absorb load growth at this pace.
Data centers now consume 6% of all electricity in the United States. More than 700 new facilities are under construction across 38 states.
The capital response is massive. S&P Global projects nearly $1.3 trillion in U.S. utility capital spending from 2026 through 2030. Morningstar has taken to calling this an investment "super-cycle." That phrase usually lives in mining reports. Not electricity rate filings.
The problem is physics and permitting. Transmission lines need environmental reviews. New transformers carry 18-month lead times. Interconnection queues in some regions stretch four to five years. No amount of money speeds that up overnight.
What does a 10x jump in capacity prices tell you? That the market sees a real, widening gap between what the grid can deliver and what the economy is demanding.
That gap is the investment thesis of this decade. And it's just getting started.
VOLTAGE
The Collapse in Virginia
Two years ago, 69% of Virginia voters said they'd be comfortable with a new data center in their community.
A Washington Post–Schar School poll released April 15 put that number at 35%.
Virginia is the world's largest data center market. AWS, Microsoft, and Google have poured tens of billions into the state. And the people living there just turned against it — fast.
79 data center projects were rejected or restricted across the U.S. in the first four months of 2026. All of 2025 saw 49. The pace is nearly doubling. At least $64 billion in projects is now blocked or delayed due to local opposition, according to Data Center Watch.
The anger isn't hard to explain.
U.S. electricity rates have risen 21% over five years. The average household now pays 18.05 cents per kilowatt-hour, up from 14.92 cents in 2022. About 4 million households lost power last year because they couldn't pay the bill.
In North Carolina, a bill called the Ratepayer and Resource Protection Act advanced through committee this month. It would require large-scale data centers to cover the cost of their own energy and water infrastructure. Duke Energy told state regulators that data centers may account for as much as 80% of all the new power it needs to add for economic development in the coming years.
The political stakes are rising beyond state capitals. CNBC reported in April that the backlash is now threatening Republican incumbents in Pennsylvania ahead of the November 2026 midterms. When a zoning fight becomes an election issue, it's no longer a zoning fight.
The political window for easy, no-strings data center approvals is closing. Projects that looked certain a year ago are heading back to committee.
WIRED IN
Two Risks the Market Hasn't Priced
NERC put three regions on elevated summer risk. The North American Electric Reliability Corporation's 2026 Summer Reliability Assessment flagged New England, SaskPower's territory in Canada, and the Pacific Northwest as facing elevated risk of supply shortfalls under above-normal heat. The grid has added more than 58 GW of new capacity since last summer — including 16.4 GW of solar and 14.7 GW of battery storage. That's real progress. But extreme heat is now arriving in months that used to be mild. One bad heat dome in the wrong region, and those margins shrink fast.
AI training loads are a risk class nobody has modeled properly. When a large language model trains, its power draw can swing by hundreds of megawatts in minutes. NERC and E&E News have both flagged this as a "high likelihood, high impact" threat. Grid operators were designed to manage gradual load shifts. A 300-megawatt spike that appears and disappears in an instant is a different problem entirely. One badly timed training run, in an at-risk region, during a heat event — and you have a cascading failure the market didn't see coming.
