There is always a bill. That is the part the economic-development cheerleaders somehow forget while they are polishing the scissors for the next ribbon cutting.
Utility Dive reports that wholesale power costs in the PJM Interconnection jumped 46 percent to $56.7 billion through the first seven months of 2026, up from $38 billion during the same period last year. Even more interesting, PJM’s independent market monitor says existing and forecast data-center demand accounted for 9 percent of the wholesale power price, or $10.48 per megawatt-hour, through July. And that figure comes through the capacity market. It does not include other data-center-related increases in electricity or transmission costs.
Now, before somebody fires up the outrage machine, PJM is not Colorado. Different market. Different grid. Different regulatory setup. Got it. But arithmetic travels just fine across state lines, and Colorado would be foolish to ignore the warning flare while politicians, utilities and developers keep admiring giant server warehouses like they are economic-development unicorns that eat nothing and poop tax revenue.
The Bullet Point Brief
- PJM’s wholesale power bill is exploding. Costs hit $56.7 billion through July, a 46 percent increase from the same stretch of 2025. Apparently, electricity has discovered the same inflationary magic as groceries, insurance, and everything else normal people have to buy.
- Data centers are no rounding error. Existing and forecast data-center load represented 9 percent of PJM’s wholesale power price through July, according to the market monitor. When one class of customer starts showing up that prominently in the math, perhaps we should stop pretending its appetite is somebody else’s problem.
- And that is not even the whole tab. The market monitor says the 9 percent figure comes through PJM’s capacity market and does not include data-center-related increases in electricity or transmission prices. In other words, this may be the appetizer, not the steak dinner.
- The capacity-market impact is already enormous. Across PJM’s last four capacity auctions, existing and projected data-center growth produced a combined $29.4 billion increase in capacity-market revenues. The market monitor warned that total will keep growing until the issues surrounding large data-center loads are addressed. That sounds less like a tech boom and more like somebody frantically looking for a bigger electrical panel.
- Colorado should pay attention before signing the guest check. Again, PJM is not Colorado. But physics remains stubbornly bipartisan. Large new loads require generation, transmission, capacity and infrastructure. Calling those costs “innovation” does not make them disappear. It just determines whose mailbox eventually gets the invoice.
My Bottom Line
I am not against data centers. I am against stupid deals.
If a company wants to come to Colorado, invest billions, employ people and buy enormous quantities of electricity, terrific. Welcome aboard. But before elected officials start throwing tax incentives around and utilities start promising the moon, somebody needs to answer one brutally simple question: Who is legally and financially obligated to prove that existing residents and small businesses will not subsidize the damn feast?
Because there is no free lunch on the electric grid. A massive new customer does not materialize next to a substation with a magical sack of electrons. Somebody builds generation. Somebody upgrades transmission. Somebody reserves capacity. Somebody pays financing costs. And when the spreadsheet gets complicated enough, government and corporate America have developed a marvelous habit of discovering that “somebody” looks suspiciously like the family trying to keep its electric bill under control.
PJM is giving Colorado a warning, not a blueprint. The warning is simple: when enormous new electrical loads arrive quickly, costs move. Before Colorado turns the data-center gold rush into another round of taxpayer-funded economic-development theater, policymakers should demand clear, enforceable protections showing exactly who pays for the infrastructure these projects require. If the data-center operators can make the economics work while carrying their own weight, great. If the business model only works after the public quietly picks up part of the power bill, that is not innovation. That is a subsidy wearing a server rack.
Source: Utility Dive