Wholesale electricity prices on PJM Interconnection, the largest U.S. power grid, have jumped to nearly double over the past year, an independent monitoring body said in a report. TechCrunch reported on May 15 that data centers were the cause.

The wholesale price per megawatt-hour rose to $136.53 from $77.78 in the same period a year earlier, the report said. Crain's Chicago Business first reported the figures.

Monitoring Analytics, an independent market monitor that oversees the PJM grid, cited data centers and PJM's failure to respond properly to surging demand as the cause.

Monitoring Analytics warned that "the price shock to customers is very large and irreversible" and that "if problems related to data center load are not resolved at an appropriate time, the price shock will be bigger in the short term."

In 2022, as data center construction began in earnest, PJM had suspended applications for new generation resources, citing a backlog built up over several years. It only recently resumed taking new applications. In the meantime, data center power demand increased sharply. The PJM grid includes Northern Virginia, where data centers are concentrated in the United States.

The price surge is also exposing a more fundamental problem. The U.S. power grid was not designed for the electricity demand required by an AI-driven economy, and the gap is widening between grid supply capacity and industrial demand. Monitoring Analytics said "PJM's current capacity supply is not sufficient to meet large data center demand and will not be sufficient in the foreseeable future."