(Bloomberg) - Electricity costs on the largest US grid more than doubled in January as a deep freeze drove up heating demand and operators shored up supplies to keep the lights on.
Total wholesale power costs on the grid operated by PJM Interconnection LLC, which serves about a fifth of Americans, jumped to $15.38 billion in the first month of the year, up from $7.34 billion in January 2025, according to Joe Bowring, president of the system’s independent watchdog, Monitoring Analytics LLC.
The preliminary data offers an early snapshot of how the storm could translate into higher consumer bills, as electricity affordability has become a more pressing election issue after playing a key role in gubernatorial races last year. Power costs surged alongside a rally in natural gas prices, which climbed to multi-year highs on the East Coast and hit records in parts of the country as frigid weather swept large swaths of the US.
PJM, already home to the largest concentration of data centers in the US, is also seeing demand growth accelerate as utilities add power capacity to support artificial intelligence, further straining grid supplies.
Power grids holding up during the severe cold was a “happy surprise,” Judy Chang, a member of the Federal Energy Regulatory Commission, said at the National Association of Regulatory Utility Commissioners’s winter summit in Washington on Monday. “We are not over it yet, but I’m hoping that the next week, too, we will survive. It’s a severe situation.”
Energy itself was the primary driver of costs, accounting for $12.47 billion in January, up from $5.67 billion a year earlier, according to a report from the independent market monitor. Costs for shoring up power supplies — including bringing generators online that typically don’t operate and paying for fuel, known as uplift charges — also more than doubled to $849 million.
By Naureen S. Malik
