Data center power demands again drive record power auction prices
BALTIMORE – Maryland households will continue to see high electric capacity market costs through the 2027/2028 delivery year, the year beginning June 1, 2027, following the regional power system operator’s (PJM) capacity market auction today. The costs, due to the PJM capacity market, will remain largely unchanged from the 2026/2027 delivery year set in PJM’s last annual capacity market auction held this past summer, reflecting already high capacity market costs that most Maryland customers started seeing on their electric bills in September this year, which reflected a major increase above last year’s costs. The auction also cleared short of PJM’s reliability requirement, meaning a degradation in service reliability notwithstanding the high clearing prices.
The auction, which is designed to ensure reliable electric service across the region for the year starting June 1, 2027, again set an all-time record high clearing price of $333 per megawatt-day, up from the PJM-wide capacity auction clearing price of $270/MW-day in the current delivery year, which runs through May 31, 2026, and $4 higher than the $329/MW-day price for the delivery year starting June 2026. The current year’s price was a nine-fold increase from the price for the delivery year that ended May 31 this year.
“We continue to see capacity market auction results that reflect the extraordinary costs being imposed on Maryland residential customers—and PJM customers across the region—for the massive power demands of data centers,” said Maryland People’s Counsel David S. Lapp. “Hardly any of these data centers are located in Maryland, and residential customers should not be paying for these costs.”
A notable difference from the auction held last summer (for the delivery year starting June 1, 2026) is the market’s failure to secure sufficient capacity to meet the rising demands of data centers. The auction fell short of PJM’s reliability requirement by about 6,600 megawatts (about the entire peak demand for Baltimore Gas & Electric).
The financial results this week largely track the results of the auction held last summer for the previous delivery year, starting June 1, 2026. Those results reflect several changes to the capacity market auction rules—advocated for by the Office of People’s Counsel— that helped increase the amount of electric supply bidding into the market. Those increases, however, continue to be insufficient to offset increases in projected data center demand. Increases in demand from data centers largely explain the auction’s reported short-fall of approximately 6,600 MW in meeting PJM’s reliability requirement. The price cleared at a “cap” resulting from the settlement of a complaint brought by Pennsylvania, which was supported by other governors in PJM, OPC, and other state consumer advocates. That cap is just a few dollars more than the cap for the auction held last summer. Without the cap, the clearing price would have been $530/MW-day.
For the second auction in a row, the price for the BGE zone cleared at the same price as the overall PJM regional price. OPC has filed a complaint with federal regulators challenging the current delivery year’s auction results and seeking refunds for customers.
Earlier this month, OPC filed a protest with federal regulators explaining that high capacity prices cannot be competitive and are therefore unlawful when new resources are unable to enter the market in sufficient quantity in time to meet PJM’s reliability requirement.
PJM’s capacity market auctions are just one category of extraordinary 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.
“This is the third capacity market auction in a row where we are witnessing a massive transfer of wealth from residential utility customers to large corporations—data centers, for not paying for the cost increases they are causing; existing generators who benefit directly from the higher prices; and large utilities which profit from building additional energy infrastructure driven by data center demand,” Lapp said. “Utility regulation needs to catch up to the practical realities that data center power demands are unlike anything this country has seen. Regulation is failing to protect residential customers, contributing to an energy affordability crisis, and exposing residential customers to new reliability risks.”
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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