ICYMI: How PJM’s Clean Energy Delays Are Costing Customers Amid Extreme Heat

Contact: Miles Cunning

New reporting from E&E News highlights how PJM’s continued slow-rolling of renewable energy projects is raising electricity prices for customers during the climate-driven extreme heat waves that have blanketed the country this summer. 

As a heat dome settled over the Mid-Atlantic last month, PJM prices spiked to $2,000 per megawatt-hour (MWh) near peak demand on July 2. Texas’s grid, ERCOT, saw just $29/MWh during a similar heatwave. The difference: renewable energy accounts for 50% of installed capacity in ERCOT, compared to just 13% in PJM. Data centers—concentrated heavily in PJM’s territory, including Virginia, which hosts the world’s largest concentration of data centers—are driving electricity demand even higher as companies across the country continue to accelerate AI development.  

PJM has taken nearly four years to reopen its interconnection queue and clear the backlog of cheap, clean energy projects waiting to come online. Customers are now paying for that delay in record prices, during record heat, on a grid that keeps falling short. 

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E&E News: Extreme heat offers sneak peak of grid’s data center challenges

August 4, 2026

By: Benjamin Storrow 

Key Points:

• A sizzling summer is breaking power consumption records across the country, offering a potential preview of the challenges facing America’s artificial intelligence boom in the era of climate change.
• Three grids — serving the mid-Atlantic, the Great Plains and Texas — have seen power demand surge to historical highs during extreme heat. Prices soared last month in the PJM Interconnection, while last week, the Southwest Power Pool had to implement emergency measures across parts of the Great Plains.
• Their struggles stood in stark contrast to the Electric Reliability Council of Texas, which managed to ride out a mid-July heat wave that shattered its demand record without a jump in prices or any emergency actions.
• The big difference: ERCOT has lots of solar and batteries; PJM and SPP do not.
• Two of those grids — PJM and Texas — are at the center of the country’s data center boom.
• Climate-induced heat waves are baking the country, sending electricity demand higher as people seek refuge in the safety of their air conditioning. At the same time, energy-hungry data centers are placing new demand on the grid as technology companies rush to develop AI.
• PJM was the first region this summer to see extreme heat send power demand to near record levels. The grid operator said power consumption last month would have broken a 20-year-old record if not for conservation programs that throttled demand.
• On July 22, ERCOT saw the largest leap in demand during a heat wave that sent temperatures in Dallas and Houston above 100 degrees. Demand reached 91 GW, shattering the previous record set in August of 2024 by 5.5 GW.
• Wind, solar and batteries account for 13 percent of installed power plant capacity in PJM, according to EIA data. That ranks PJM tied for last, alongside the New York Independent System Operator, among the country’s seven wholesale power markets.
• Wind, solar and batteries account for 50 percent of installed power plant capacity in ERCOT, which ranks second to California’s grid operator — and only by a hair (51 percent). That helps explain why wind and solar ranked as ERCOT’s second- and third-largest sources of power generation through the first six months of the year, and why power prices were so low during the day.
• The struggles of PJM and SPP make the relative ease with which ERCOT navigated the heat even more notable, [GridStatus.io analyst Abby] Lestina said. “I think that’s a huge story that’s kind of being glossed over,” she said. “Where were prices? Prices were not talked about, and that’s the big story within itself. We’re hitting these load highs in the summer and the grid was well supplied.”
• “Despite the record peak, power prices remained modest at $100-200/MWh for a couple of hours on consecutive peak and near-peak days. This is because of the growth of solar and storage, which have continued to be built at large scale in the ERCOT region,” [ICF energy analyst Patrick Milligan] wrote in an email.

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