PJM Interconnection's annual capacity auction concluded with wholesale electricity prices climbing 22% above 2024 levels, marking another record-breaking year for power costs. The grid operator, serving 67 million customers across 13 states from the Midwest to the Atlantic Coast, identified data center expansion as the primary driver behind escalating electricity demand in its territory.

The price surge reflects broader structural changes in U.S. power consumption patterns, with electricity demand projected to grow 2.5% annually through 2035 after a decade of minimal increases. PJM's territory encompasses Northern Virginia's Data Center Alley, the world's largest concentration of data facilities, along with rapidly expanding markets in Ohio and other states where artificial intelligence infrastructure is driving unprecedented power requirements.

Residential and commercial customers will bear the financial impact of this demand surge through higher monthly bills, with increases potentially reaching 5% in the coming year. State regulators and consumer advocates are raising concerns about wealth transfers from residential customers to large corporations, as utility companies invest heavily in infrastructure to support data center growth while passing costs to ratepayers.

The PJM auction results serve as a national indicator for electricity pricing trends, given the operator's significant market footprint and role in regional power markets. Utility bills are already rising faster than inflation rates, and this trajectory appears likely to continue as the technology sector's power demands intensify across major metropolitan areas and industrial corridors.