* Background is here if you need it. Bloomberg…

The outcome of what was, until recently, an obscure US power market auction will be the subject of intense interest this week for electric generators, regulators and consumers alike.

The results due late Wednesday will confirm what PJM Interconnection LLC — the nation’s largest grid operator, serving millions of Americans from Chicago to Washington, DC — will pay power generators to secure capacity starting in 2027. The bill is expected to reach $17 billion, according to a Bloomberg survey of grid experts, policymakers and traders. That would mark the third consecutive year of record-breaking costs, as the swift build-out of data centers is adding billions of dollars to household utility bills.

The PJM auction has emerged as a barometer of US energy inflation, with this week’s results likely to stoke increasingly heated public discourse about affordability. Surging utility bills are already shaping up to be an issue in the congressional midterm elections next year: Despite President Donald Trump saying electricity prices would be halved within a year of taking office, costs have increased. Just last month, Democrats won elections in New Jersey and Virginia — two states within the grid’s territory — as well as in Georgia, after campaigning to lower power bills.

While the so-called capacity auction is just one component of total electricity costs to consumers, it’s one of the fastest growing due to skyrocketing demand from artificial intelligence that’s straining power supplies. Data center electricity consumption accounted for 45% of the price tag in the last auction, according to Monitoring Analytics LLC, PJM’s official independent watchdog.

* Speaking of data centers, the Data Center Coalition sent me a statement today about this week’s state report citing a growing likelihood of power shortages in Illinois and throughout much of the country significantly due to data center growth and retirement of fossil fuel plants (many of which were uneconomical and aging out anyway)…

The U.S. data center industry provides significant benefits to Illinois and communities across the state where data centers operate— creating thousands of high-wage jobs, providing billions of dollars in economic investment, and generating significant local and state tax revenue that helps fund schools, transportation, public safety, and other community priorities. Data centers support more than 115,000 jobs and generate $1.8 billion in tax revenue in Illinois, according to PwC. Data centers are also the backbone of the 21st-century economy, with unprecedented growth in demand from individuals and businesses for the digital services that data centers enable.

The Data Center Coalition is currently reviewing the 2025 Resource Adequacy Study. While grid planning and management are ultimately the responsibility of utilities, grid operators, and regulators, the data center industry is committed to leaning in as an engaged partner to help ensure we collectively meet this critical moment. Data centers are also playing a leading role in advancing clean energy; in 2024 alone, data center companies were responsible for half of all corporate clean energy procurement nationally. DCC members are also investing in innovative solutions including nuclear power, carbon capture, and other sustainable approaches.

The data center industry remains committed to paying its full cost of service for the energy it uses. Reports from states like Virginia and Arizona confirm we’re delivering on that commitment, and a new report from Lawrence Berkeley National Laboratory shows that adding data centers and other large load customers to the grid can even help lower energy costs for other customers.

We look forward to continued engagement with the Illinois Commerce Commission, utilities, grid operators, and other stakeholders in advancing a reliable and affordable grid for all customers.

* Meanwhile, in New York, here’s Politico…

New York officials solidified a major shift toward energy affordability and reliability Tuesday — and moved away from a focus on achieving ambitious climate targets.

The State Energy Planning Board, controlled by Gov. Kathy Hochul’s appointees, approved the 2025 state energy plan at their meeting Tuesday morning. It’s New York’s first energy plan in a decade and has served as a vehicle for Hochul’s pivot toward an “all of the above” strategy.

“An all of the above energy approach isn’t simply a choice, it’s our reality,” Rory Christian, chair of the New York State Public Service Commission, said during the planning board meeting Tuesday. “New York recognizes the need for investments in infrastructure to keep the system stable during this transition, and we must do so affordably.” […]

The 2025 energy plan doesn’t foresee hitting 70 percent renewables until sometime between 2036 and 2040. New York’s 2019 climate law calls for 70 percent by 2030.

Similarly, the new plan doesn’t envision meeting the overall emissions reduction targets set in the 2019 law. That called for a 40 percent reduction in emissions from 1990 levels by 2030 and net zero, with an 85 percent actual reduction, by 2050.

* Illinois Manufacturers’ Association…

“We didn’t need a 222-page report to tell us what we already know – Illinois is facing an energy crisis resulting from the forced closure of dispatchable baseload generation and growing demand. If skyrocketing power bills were not warning enough, this new report is a flashing red sign that Illinois needs to act immediately. With electricity demand only expected to increase, we simply cannot risk the chaos that would be caused by the premature closure of baseload generation plants as required under current law,” said Mark Denzler, president & CEO of the Illinois Manufacturers’ Association. “We urge the General Assembly and the Governor to repeal these closure dates and work instead to bring more generation facilities online, including nuclear, gas, and renewable energy, invest in transmission lines, and support technologies like battery storage. If Illinois is to maintain safe, reliable and affordable energy crucial to businesses and families, it will require an all-of-the-above approach that recognizes the seriousness of this moment.”

* The Illinois Clean Jobs Coalition…

“While the results of the Resource Adequacy Study report show challenges ahead, we foresaw these trends emerging and are thankful the Illinois legislature took the first of two necessary actions to address these challenges by passing the Clean and Reliable Grid Affordability (CRGA) Act this fall. Illinois will begin completing an Integrated Resource plan next year – a critical energy planning tool that will help the state develop a responsible energy plan to meet these challenges with new, cost-effective clean energy.

“The next critical step is to pass commonsense guardrails for data centers – the primary driver of the unprecedented energy demand that is saddling Illinois consumers with rising utility bills while dirty energy companies make record profits. ICJC looks forward to working with legislative leaders and stakeholders in the spring legislative session to ensure data center developers, not Illinois consumers, pay for the disproportionate energy burden big tech is bringing to our power grid and keep in line with Illinois’ national leadership on climate by powering these facilities with clean energy.”

Discuss.