PJM monitor attributes US$6.3bn auction charges to data centres

• Monitoring Analytics says data centres represented 38% of the US$16.4bn value of PJM’s 2028–2029 capacity auction

• The monitor wants new data-centre demand backed by generation or procured separately through 15-year contracts

The fact

Monitoring Analytics, the independent market monitor for PJM Interconnection, estimates that data centres were responsible for US$6.3bn, or 38%, of the US$16.4bn in charges from PJM’s capacity auction for the 2028–2029 delivery year. Monitoring Analytics President Joseph Bowring told Utility Dive that data-centre-related charges totalled US$29.4bn across the last four base auctions, equal to 46% of the US$63.6bn total. The monitor plans to publish its full analysis of the latest auction within weeks.

PJM said the auction cleared at the FERC-approved cap of US$325 per MW-day and procured 138,318MW of capacity. Even after adding capacity secured outside the auction, the region remained 6,831MW short of its reliability requirement. PJM also cautioned that the US$16.4bn auction total is not the final cost to customers, because some capacity needs are covered through self-supply or bilateral contracts.

Monitoring Analytics has proposed requiring new data centres to secure new generation through 15-year contracts. Load-serving entities whose data-centre customers lack qualifying contracts would obtain capacity through a separate backstop auction. PJM is preparing its own backstop proposal for submission to FERC.

The assessment

Monitoring Analytics is not proposing to remove data-centre demand from PJM's reliability planning. It wants new large loads backed by generation or procured separately, rather than included in the base auction while their scale and timing remain uncertain. The monitor argues that this would keep costs associated with delayed or cancelled projects from being spread across the wider customer base.

PJM has not adopted the monitor's model. Its own backstop design could assign costs and obligations differently, and the final filing to FERC will determine whether data centres face separate procurement or remain in the base auction.

For BTW readers, if adopted, the proposal would add a separate capacity-sourcing step to data-centre development. Developers would need a dedicated generation contract or face separate procurement for their load, rather than leaving that demand in PJM's base auction.

What to watch

Watch PJM’s filing with FERC for whether data-centre demand remains in the base auction, which loads enter the backstop procurement and how costs are assigned if demand or generation is delayed. Monitoring Analytics’ forthcoming report should also explain how it calculated the US$6.3bn estimate. A September auction would require FERC approval.