Wholesale electricity prices across America’s largest power grid jumped 76 percent in the first quarter of 2026, driven by surging demand from AI data centers, according to Monitoring Analytics, the independent market monitor for PJM Interconnection.

The cost of wholesale power across the 13-state PJM grid rose from $77.78 per megawatt-hour in Q1 2025 to $136.53 in the same period this year, a $58.75 increase in 12 months. PJM’s footprint covers 13 eastern states plus the District of Columbia, supplying power to roughly 67 million customers.

Monitoring Analytics called the impacts “significant and irreversible,” warning they will grow unless the grid addresses data center load directly. The monitor singled out Northern Virginia, home to the densest concentration of data centers in the world, as a primary pressure point on the system.

The report recommended that data centers be required to bring their own generation capacity rather than drawing power from the shared grid, a policy shift that would force the AI industry to internalize costs it currently offloads onto residential and commercial ratepayers.

The cost breakdown inside that number is stark. Capacity costs alone surged 398 percent in Q1 2026, compared to roughly 5 percent for transmission.

The two most recent PJM capacity auctions factored in data center demand projections that collectively added $13 billion to customer bills across the grid. That figure lands on ratepayers, not on the technology companies whose facilities generated it.

The report has accelerated an already volatile political situation around PJM. Pennsylvania Gov. Josh Shapiro has publicly raised the prospect of withdrawing Pennsylvania from the grid operator entirely if prices kept climbing.

On a recent earnings call, the CEO of American Electric Power, the Ohio-based utility, said leaving PJM was an option the company was considering. FERC Chair Laura Swett and governors across the region have pushed PJM to overhaul its market structure.

In response, PJM imposed a cap on future capacity prices through 2029 and released a white paper outlining three market reform options, including requiring utilities and suppliers to make longer-term capacity commitments.

Beyond the BYO-generation requirement, Monitoring Analytics recommended that PJM create a dedicated interconnection queue that would only connect new data centers when adequate generation capacity exists to serve them, a direct check on the current model, in which data centers can secure grid access before the power supply needed to serve them is built. PJM spokesperson Jeff Shields said rising prices accurately reflected tightening supply and demand conditions and that the grid operator was working with states and member companies to extend market caps, authorize transmission expansion projects, and reform wholesale market rules.

The Q1 2026 state of the market report is the clearest accounting yet of unchecked data center expansion costs at a grid level. PJM has long warned that load growth projections are climbing faster than new generations can come online. The monitor’s language, “irreversible,” signals that the window for low-cost mitigation may already be closing.

What happens next depends largely on whether regulators treat data center power demand as a grid emergency or continue processing it through ordinary interconnection queues.