NORTHERN VIRGINIA — Wholesale electricity prices on the PJM Interconnection grid rose 76% over the past year, according to a report from independent market monitor Monitoring Analytics. The report attributed the increase to surging demand from data centers and to operational shortcomings at PJM, the largest electrical grid in the United States.

The price for one megawatt-hour of electricity on the PJM grid climbed to $136.53, up from $77.78 at the same time last year. Electricity demand from data centers has risen sharply across the PJM footprint.

"The price impacts on customers have been very large and are not reversible. The price impacts will be even larger in the near term unless the issues associated with data center load are addressed in a timely manner," Monitoring Analytics said in the report.

The report also pointed to a lack of transparency in PJM's decision-making and delays in needed software upgrades. Those upgrades have been delayed by multiple years and have no firm expected implementation date, the market monitor said.

In 2022, PJM paused applications for new generating sources because of a years-long backlog. It has since resumed accepting new requests for generating sources.

PJM released a white paper examining the future of its grid and suggesting three paths forward. American Electric Power has threatened to leave the PJM grid.

The market monitor said the current supply of capacity in PJM is not adequate to meet the demand from large data center loads and will not be adequate in the foreseeable future. The capacity market would not have seen the same tight supply demand conditions without rising demand from data centers, the report said. The core elements of the PJM market design remain robust, however, and the solution starts with the recognition that the source of the current issues is data center load, according to the report.