The largest grid operator in the United States failed for the first time to secure enough power to meet projected demand, driven almost entirely by the expansion of artificial intelligence data centers. PJM Interconnection's December 2025 capacity auction procured 145,777 megawatts for the 2027-2028 delivery year, falling 6,625 megawatts short of reliability requirements.
Ninety-four percent of the new load growth came from data center demand. Capacity prices hit the auction ceiling of $333.44 per megawatt-day for the second consecutive year.
PJM serves more than 65 million people across 13 states and the District of Columbia. Beginning in summer 2027, the region may operate below reliability standards for the first time, increasing the risk of rolling blackouts during heat waves and winter storms.
Nationally, data centers consumed about 4.6% of total electricity in 2024, a share projected to nearly triple by 2028. Morgan Stanley Research forecasts that data center demand could reach 74 gigawatts by 2028, with a shortfall of roughly 49 gigawatts in available power access.
Companies are racing to build capacity. NTT Global Data Centers announced on March 19 that it would double its worldwide capacity to 4 gigawatts within two years, with 34 projects underway and contracts secured for more than 70% of them. Siemens committed more than $165 million to expand manufacturing in North and South Carolina for data center power equipment and partnered with Fluence Energy to deploy battery storage that can make data center sites viable in power-constrained locations within months rather than years.
Meta disclosed plans for 10 gas-fired power plants at its 2,250-acre Hyperion campus in Louisiana, representing 7.5 gigawatts of generation capacity and a 30% increase to the state's grid.
The question of who pays for the infrastructure is intensifying. Within PJM's territory alone, utility customers paid $4.4 billion in 2024 to build new transmission serving data centers. Retail electricity prices have risen 42% since 2019, outpacing the 29% increase in the Consumer Price Index.
Senators Josh Hawley and Elizabeth Warren sent a letter on March 26 urging the Energy Information Administration to require mandatory annual energy reporting from data centers. California has proposed legislation requiring separate tariffs to shield ratepayers from data center transmission costs.
Environmental commitments are strained. Google's emissions jumped nearly 50%, Meta's rose more than 60%, and Microsoft's increased over 23%, all driven by data center expansion. Renewables currently supply 27% of electricity consumed by data centers, while fossil fuels account for 56%. The International Energy Agency projects global data center electricity consumption will exceed 1,000 terawatt-hours in 2026 and double by 2030. Transformer lead times of two to four years and permitting timelines that can stretch a decade compound the bottleneck.
