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The heat dome is a problem for the largest US power grid, beyond data center boom

The largest U.S. grid PJM prepared for record-breaking consumption spurred on by a 'heat dome' and a boom in data centres on Thursday. They did this by re-routing traffic on power lines, and dispatching expensive fossil fuel plants to avoid outages.

PJM predicted that a scorching heat of up to 100 degrees Fahrenheit would break the 20-year record for demand at 6 p.m. Thursday EDT. The forecast for peak electricity consumption is 166.2 gigawatts, which would surpass the previous record of 165.6 GW. PJM claims it can meet the challenge.

According to the 'latest report' from PJM’s independent market monitor, despite the strain on PJM’s grid caused by power-hungry, data-intensive data centers, the operator's total cost of operating a system that serves 67 million users has increased more than 16 billion dollars, or nearly 70%, this year.

Monitoring Analytics estimates that the surge in demand for wholesale power across the grid accounted for $3.8 Billion, or 23%, of the $16.25 Billion increase year-over-year.

According to the report of the market monitor, PJM's wholesale power cost was $40 billion for the first five month of this year. This is up 68% compared to $23.8 billion the previous year.

According to Monitoring Analytics, the costs of keeping PJM’s overloaded grid’s reserve coal and natural gas plants operational nearly?doubled during the first five month period of 2026. The so-called “uplift payments” rose to $1.1 billion from $531 million a few months earlier.

PJM has said that it will work with state and federal officials to increase generation capacity, while balancing the addition of new data centres and other large loads on the system. This is done without unfairly affecting consumers.

The grid operator said that "PJM has taken a series of coordinated actions in order to bring new resources on line faster, maintain reliability, while supporting economic growth and improve how we plan for growth demand."

Analysts at global consultancy firm ICF said that PJM will not be able to meet new demand after next year. Analysts at global consulting firm ICF said that NYISO (the power grid operator of New York State) could face similar constraints in the next few years.

According to PJM data, this week's heavy power-line congestion in Northern Virginia, the home of?the largest collection?of?data centers in the entire world, contributed to price spikes exceeding $2,000 per Megawatt Hour.

These costs are not immediately reflected in the monthly bill for residential customers. If wholesale prices remain high for several months or even years, the electric utilities will cover these higher wholesale costs by increasing their retail rates and/or supply charges.

According to the U.S. Federal Energy Regulatory Commission, 66% of U.S. consumers of electricity are exposed to power bought through wholesale markets.

When the country's largest grid operator flags price spikes while also warning of record demand, it's a sign that homeowners cannot ignore, said Trevor Guilday. He is an expert in energy conservation and the founder of EcoGen America.

Upgraded insulation, energy-efficient appliances or residential solar panels are no longer just "green" choices. These are practical financial defences against a grid under strain. (Reporting by Tim McLaughlin, Editing by Nick Zieminski).

(source: Reuters)