Monitoring Analytics, the federally mandated independent watchdog that keeps an eye on the critical PJM Interconnection that distributes power around the U.S., said in a new report [PDF] that a massive 75.5% increase in power costs in the largest region of the U.S. has been directly caused by data centers, and it also blamed the regional market operator for failing to keep up with the rising demand. The price increases have been steep; wholesale electricity prices went up from $77.78 per MWh in the first quarter of 2025 to $136.53 per MWh in the same period of this year.

“The price impacts on customers have been very large and are not reversible,” the watchdog said in the report. “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, prior to the next BRA (base residual auction), scheduled for June 2026.” Monitoring Analytics says that PJM Interconnection is trying to rewrite the rules for the capacity market and bake in data center demands into its forecasts. The watchdog is critical of this proposal as it will raise the prices for all electricity consumers, putting an unnecessary burden on households and small businesses.

There is a possible solution to this problem: make data centers and other major consumers negotiate directly with power producers instead of mixing that demand with the BRA. This auction is where capacity is sold some three years ahead of when it’s needed, and including data center demand in the BRA will push prices up for everyone. In fact, the report says that without the AI infrastructure built out, the PJM Capacity Market would not have seen the high prices we’re experiencing now. So, by making data centers negotiate directly with power producers, this will ensure that the expanded capacity is solely shouldered by these large consumers and help keep utility bills stable for everyone else.

However, this is not within the interests of PJM Interconnection. After all, by keeping massive data center loads baked into the general capacity forecast, the power auction would result in higher prices as demand moves up, but supply stays at relatively the same level. This higher cost, in turn, would then be passed on to transmission operators and local utilities, eventually making its way into the bill of the individual consumer.

The increasing backlash against data center development, particularly its impact on electricity prices, has caught the attention of the federal government. In March of this year, President Donald Trump gathered some of the country’s biggest AI hyperscalers in the White House and made them promise that they would “pay their own way” when it comes to AI infrastructure costs. This is, in principle, what Monitoring Analytics is pushing for: have tech companies pay for their own power — both the electricity they consume, and the infrastructure needed for it.

Unfortunately, the “ratepayer protection pledge” is nothing but a promise, and it cannot force institutions like PJM Interconnection to not pass on the burden of cost to the average American unless Congress passes a federal law that forces the Federal Energy Regulatory Commission (FERC) to prevent cost-shifting.

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Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics.