# PJM grid strain, capacity auctions and data center impact > Live situation record from CLSTR: https://clstr.news/situations/pjm-grid-price-surge-from-data-centers > Updated: 2026-08-14T08:00:37.000Z. Sources: 26. Developments: 9. In July 2026, PJM Interconnection faced extreme grid strain during a heat wave. In Northern Virginia, wholesale electricity prices surged past $2,000/MWh, and a sudden 3 GW loss in the region caused flickering lights and voltage disturbances. This instability prompted emergency demand-reduction orders and highlighted the impact of data centers on grid reliability. A July 14 capacity auction cleared at the federal price cap of $325/MW-day, reflecting a 6.8 GW supply shortfall and a record peak demand of 168.2 GW on July 2. The auction is expected to increase electricity costs by approximately $6.3 billion for customers across 13 states, a cost driven primarily by AI-driven data-center loads. In response to these pressures, FERC convened a technical conference to discuss PJM governance reforms, including calls for a more independent and transparent board. On July 28, PJM announced it may begin temporarily interrupting electricity supply to data centers and large industrial consumers (50 MW or more) starting in June 2027 to prevent blackouts. Recent developments show a shifting landscape: Exelon reported a 40% drop in its data-center load as it focuses on transmission security, while research suggests a rise in off-grid, natural-gas-fired power to bypass grid bottlenecks. Meanwhile, PJM has accepted 201.5 GW of proposed power projects into an updated interconnection process to address a forecasted demand increase of up to 70 GW by 2038. On August 14, the New Jersey Board of Public Utilities (BPU) released a study calling for significant reforms to the PJM capacity market, noting that the current Reliability Pricing Model may no longer deliver electricity at the lowest cost following a 20 percent increase in New Jersey electricity bills. The BPU recommended that large new users, such as data centers, be required to provide new generation resources to support their own demand. ## Claims - PJM Interconnection announced it may temporarily interrupt power to data centers and other large consumers during peak demand to avoid blackouts. (corroborated by 2 sources) - U.S. data center electricity consumption is projected to quadruple by 2035 compared with current levels. (corroborated by 2 sources) - The curtailments will apply only to data centers with a power demand of 50 MW or more, starting in June 2027. (single source) - An earlier auction to increase generation capacity for the PJM grid failed to meet expected results. (single source) - More than 200 entities launched lobbying campaigns on data‑center energy issues between April and June 2026, up from fewer than 100 the prior year. (single source) - President Donald Trump promoted a non‑binding declaration supported by hundreds of companies to limit electricity price increases. (single source) - The Federal Energy Regulatory Commission (FERC) is examining new regulations to ensure large installations are safely integrated into the grid. (single source) - PJM is conducting a new auction for additional generation capacity to address grid deficits. (single source) ## Timeline ### 2026-08-14: New Jersey BPU calls for PJM capacity market reforms The New Jersey Board of Public Utilities is calling for reforms to the PJM electricity capacity market to curb rising costs and improve reliability following a 20 percent spike in state electricity bills. 3 sources. https://clstr.news/cluster/new-jersey-bpu-calls-for-pjm-capacity-market-reforms ### 2026-08-12: PJM Interconnection reviews 201 GW of power projects amid rising demand PJM Interconnection is reviewing 201.5 GW of new power projects amid surging demand, while considering new rules for data centers after a 3.8 GW load drop caused by onsite generation triggered a grid event. 2 sources. https://clstr.news/cluster/pjm-interconnection-reviews-201-gw-of-power-projects-amid-rising-demand ### 2026-08-03: Exelon reports 40% drop in data center load as off‑grid gas power demand soars Exelon’s data‑center load fell 40% to 11 GW, while off‑grid gas‑powered data‑center capacity is projected to add 62 GW by 2030, especially in Texas and the PJM region. 2 sources. https://clstr.news/cluster/exelon-reports-40-drop-in-data-center-load-as-offgrid-gas-power-demand-soars ### 2026-07-28: PJM Interconnection to Impose Temporary Power Cuts on US Data Centers PJM Interconnection will temporarily cut power to US data centers drawing 50 MW+ from June 2027 to avert blackouts amid rapid demand growth, while lobbying and regulatory actions intensify. 4 sources. https://clstr.news/cluster/pjm-interconnection-to-impose-temporary-power-cuts-on-us-data-centers ### 2026-07-23: PJM auction hits price cap as AI data centers surge demand PJM’s 2028‑29 capacity auction hit the $325/MW‑day cap as AI‑driven data centers push demand, leaving a 6.8 GW supply gap and raising consumer costs. 2 sources. https://clstr.news/cluster/pjm-auction-hits-price-cap-as-ai-data-centers-surge-demand ### 2026-07-22: FERC advances PJM grid reforms for greater transparency and independence FERC held a conference on PJM grid reforms, urging greater board transparency, longer terms, and more state input to address power shortfalls and rising prices. 5 sources. https://clstr.news/cluster/ferc-advances-pjm-grid-reforms-for-greater-transparency-and-independence ### 2026-07-21: PJM Grid Faces Massive Power Drop and Emergency Curtailments A sudden 3‑GW drop hit PJM Interconnection’s grid on July 22, causing voltage disturbances across the eastern U.S., while earlier emergency demand‑reduction orders were issued to prevent blackouts as demand ne​ 5 sources. https://clstr.news/cluster/pjm-grid-faces-massive-power-drop-and-emergency-curtailments ### 2026-07-14: PJM auction adds $6.3 billion to electricity rates in 13 states PJM’s latest capacity auction will add $6.3 billion to electricity rates for customers in 13 Eastern states and D.C., driven by rising data‑center demand, prompting state scrutiny and a settlement to cap prices 3 sources. https://clstr.news/cluster/pjm-auction-adds-63-billion-to-electricity-rates-in-13-states ### 2026-07-04: PJM emergencies drive $2,000/MWh electricity prices for Virginia data centers PJM issued emergency alerts as extreme heat drove Virginia data‑center demand to record levels, pushing wholesale electricity prices above $2,000/MWh and prompting cost‑increase warnings for local users. 2 sources. https://clstr.news/cluster/pjm-emergencies-drive-2000mwh-electricity-prices-for-virginia-data-centers --- Cite as: PJM grid strain, capacity auctions and data center impact. CLSTR, https://clstr.news/situations/pjm-grid-price-surge-from-data-centers