Aftab Khan

Stories

AI data centers are rebuilding – and stress-testing – the U.S. power grid

As of May 2026: Warning that exponential data center development could outpace available capacity

Since late 2022, U.S. regulators and utilities have warned that AI-optimized data centers could reshape national power demand, ending an era of flat electricity consumption and forcing rapid buildout of generation and transmission. By early 2026, those warnings have crystallized into concrete challenges. PJM Interconnection's December 2025 capacity auction hit the $333.44/MW-day price cap and failed to meet reliability requirements for the first time in its history. Data centers accounted for $6.5 billion—or 40%—of the auction's $16.4 billion in costs.

Updated May 10

Notable Quotes

Khan said the 2025 forecast “captures the dramatic increases in future energy demand, as evidenced by the last two years when data center development has grown exponentially.”

from AI data centers are rebuilding – and stress-testing – the U.S. power grid · Updated May 10

PJM warned that starting summer 2026, the grid will have 'just enough power to keep the grid reliable,' and if nothing changes, 'starting in June 2027, the region may fall below reliability standards.'

from AI data centers are rebuilding – and stress-testing – the U.S. power grid · Updated May 10