Data center power demands drive record power auction prices with varying impacts on Maryland customers
BALTIMORE – Many Maryland households are likely to see costs slightly increase for the 2026/2027 delivery year—on top of the 2025/2026 delivery year's much more substantial increases from the 2024/2025 delivery year—but customers of Baltimore Gas and Electric could see slight bill decreases after accounting for certain credits, following the regional power system operator’s (PJM) capacity market auction released this week. (See bill impact details below.)
The auction, which is designed to ensure reliable electric service across the region for the year starting June 1, 2026, set an all-time record high clearing price of $329 per megawatt-day, up from last year’s PJM-wide capacity auction clearing price of $270/MW-day, which itself was a nine-fold increase from the previous year and will affect utility bills this year.
“The auction results further demonstrate the extraordinary costs being imposed on Maryland residential customers to support the massive power demands of data centers—mostly located outside of Maryland,” said Maryland People’s Counsel David S. Lapp. “Residential customers are not causing these excessive costs and should not be paying for them.”
Several changes to the capacity market auction rules—advocated for by the Office of People’s Counsel—helped increase the amount of electric supply bidding into the market, but those increases were still insufficient to offset increases in demand. Most increases in demand originated from data centers, totaling more than 5,400 MW of increased demand from the level of demand that cleared just one year ago. The price cleared at a “cap” resulting from the settlement of a complaint brought by Pennsylvania, which was supported by Maryland Governor Wes Moore, other governors in PJM, OPC, and other state consumer advocates. The clearing price would have been $389/MW-day without the cap.
Despite improvements in last year’s auction rules, which artificially restricted supply included in the auction, PJM’s rules still understate the amount of supply available in the region, according to a pending complaint filed by OPC now before federal regulators.
For the first time in several years of capacity market auctions, the price for the BGE zone cleared at the same price as the overall PJM regional price, due to including the Brandon Shores and Wagner (so-called reliability must-run or RMR) power plants near Baltimore as supply in the auction. Those plants were excluded from last year’s auction, driving the auction results up by as much as $5 billion, according to an OPC report released last August. Following that auction, OPC called on PJM to account for those units in the auction. PJM initially called the request “counterproductive,” but, under significant pressure, eventually changed course for future auctions. OPC has filed a complaint with federal regulators challenging last year’s auction results and seeking refunds for customers.
The extraordinary costs from PJM’s capacity market auctions are just one category of costs that data centers are imposing on residential customers. Data centers also increase energy costs and transmission costs for Maryland customers. Maryland customers are unfairly being required to pay hundreds of millions of dollars for transmission projects that are driven by data center load growth occurring in Northern Virginia, according to several OPC filings before federal regulators.
“We are witnessing a massive transfer of wealth from residential utility customers to large corporations—data centers and large utilities and their corporate parents, which profit from building additional energy infrastructure,” Lapp said. “Utility regulation is failing to protect residential customers, contributing to an energy affordability crisis.”
Lapp authored an opinion piece published this week explaining how PJM has wrongly blamed the State for increased costs. Lapp’s piece explains the need for PJM leadership changes that will tackle the data center problem and other issues.
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The chart below shows initial estimates of the impacts of the July 2025 capacity market auction for the energy delivery year June 1, 2026, to May 31, 2027, relative to last summer’s auction (delivery year June 1, 2025, to May 31, 2026) and the previous auction (delivery year June 1, 2024, to May 31, 2025). The impacts will be reflected on customer bills next year. The results are rough estimates and depend on the level of customer energy consumption. The exact timing of the increases will depend on regulatory decisions about when the wholesale costs are approved to be included in retail rates.
Estimated Maryland Residential Monthly Bill Increases From July 2025 Capacity Market Auction for 2026/2027 Delivery Year
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Cumulative impact of last two capacity auctions (increase from 2024/2025 delivery year)
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Impact of most recent capacity auction (increase from 2025/2026 delivery year)
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Baltimore Gas and Electric
After credits (see explanation below)
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$16.49
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$0.83
(-$3.36)
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Pepco (Maryland) and SMECO
After credits (see explanation below)
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$17.68
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$3.34
$2.50
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Delmarva Power (Maryland)
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$10.43
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$5.24
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Potomac Edison (APS-Maryland)
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$20.81
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$3.21
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The table above shows the capacity market auction clearing price increases. Some Maryland customers, however, will receive a credit that reduces their bill as a result of rule changes related to payments for RMR units. Specifically, BGE and Pepco customers will see their capacity market cost increases wholly or partially offset. We estimate BGE customers will see an average credit-related reduction of approximately $4.20/month and Pepco customers $0.85/month for 2026/2027 delivery year. This means that, overall, for costs related to the capacity market increases and RMR credits, BGE customers will see an estimated bill decrease of $3.36/month, and Pepco customers an increase of $2.50/month. The rule changes were urged by OPC and others and adopted by PJM.
The bill-increase impacts from the most recent capacity market auction are lower in BGE's service territory than those in other utility service territories because BGE's customers already were paying higher capacity market prices. Last year, the BGE zone’s price was $466/MW-day compared to the regionwide clearing price of $270/MW-day. Although the clearing price for this month’s auction for the BGE zone ($329/MW-day) is less than last year’s clearing price for the BGE zone, the BGE zone receives credits related to imports of lower cost power, bringing the capacity cost from the last auction to the BGE zone down to $307/MW-day, less than the current auction’s clearing price.
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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