Wholesale electricity in the PJM Interconnection region is on course to cost 41% more in 2026 than it did in 2025, the largest regional jump among the markets the U.S. Energy Information Administration follows. The number sits in the agency’s October Short-Term Energy Outlook, released Oct. 6 after a forecast completed Oct. 1.
Nationally the picture is far milder. EIA expects wholesale prices to average $52 per megawatthour across the 11 trading hubs it tracks in 2026, about 11% above 2025, while the Northwest’s Mid-Columbia hub is projected to fall 23%. PJM is the outlier, a grid coordinating power for more than 67 million people in 13 states and the District of Columbia, from New Jersey and Virginia west to Illinois.
Winter Storm Fern and July Heat Behind the PJM Jump
In the electricity chapter of its latest outlook, EIA says wholesale prices in the PJM region this year will increase by 41% compared with 2025, and it ties the 2026 spikes to weather, naming winter storm Fern and high July temperatures. The text gives no PJM-specific dollar figure per megawatthour, so the 41% is a percentage change rather than a stated price level. Prices at most other hubs have stayed relatively stable this year, which is why one region dominates the October forecast.
The outlook also carries a reversal. PJM, ISO-NE and NYISO, the three regions with the highest 2026 wholesale prices, are expected to see declines in 2027, about 7% at PJM and 14% at NYISO, on the assumption that winter temperatures return to near average after the cold of last winter. Because a 7% drop applies to the elevated 2026 base, PJM prices in 2027 would still sit roughly 31% above 2025 by simple arithmetic on EIA’s two percentages.
Capacity Auction Costs Sit Outside the 41%
EIA’s wholesale figure tracks energy prices at trading hubs. The charges that guarantee future supply run through a separate capacity market, and that is where the data-center argument has concentrated. The grid operator’s 2027/2028 Base Residual Auction, held Dec. 17, 2025, cleared at $333.44 per megawatt-day, the FERC-approved cap, across the entire footprint, and finished 6,623 MW short of the reliability requirement, the first auction in which the whole footprint fell short. Forecast peak load for 2027/2028 came in about 5,250 MW above the prior delivery year’s forecast, with nearly 5,100 MW of the rise attributed to data centers.
Stu Bresler, PJM’s executive vice president of market services and strategy, said the auction “leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply.” EIA’s passage on PJM, by contrast, credits weather for the 2026 spike and does not mention data centers there; the agency’s only reference is a national one, with commercial demand, which includes data centers, forecast to grow 2.8% in 2027.
Market Monitor Tallies Run Higher Than the Hub Forecast
PJM’s independent market monitor, Monitoring Analytics, measures a broader basket: the total price of wholesale power, capacity included. Through July 2026 that total rose 46% to $116.53 per megawatthour, or $56.7 billion, from $79.57 per megawatthour, or $38 billion, in the same stretch of 2025, according to Utility Dive’s account of the monitor’s first-half state-of-the-market report. The monitor assigned 9% of the total, or $10.48 per megawatthour, to existing and forecast data-center load, all of it flowing through the capacity market, and warned that “this total will continue to grow until the issues associated with the addition of large data center loads are addressed.”
The same report credits data-center load growth with adding a combined $29.4 billion in capacity-market revenue across PJM’s last four auctions, while average peak load rose only 1.7% and real-time hourly average load 2.2% over the period measured.
The two numbers answer different questions. EIA’s 41% is a forecast of calendar-2026 hub prices against 2025; the monitor’s 46% is a seven-month tally of everything PJM load pays for wholesale supply. Neither is a retail bill.
Retail Bills Move More Slowly
EIA’s table puts the average U.S. residential price at 16.5 cents per kilowatthour in 2024, 17.3 in 2025, a projected 18.2 in 2026 and 18.7 in 2027, a rise of about 5% in 2026 even as the PJM wholesale index leaps 41%. Wholesale cost is one component alongside transmission and distribution upgrades and, in some regions, capacity auction prices. In an Oct. 7 analysis of winter spending, EIA expects households that heat with electricity, over 40% of U.S. homes, to see bills rise 4% on average, citing higher electricity prices.
EIA built the 2027 decline for PJM on near-average winter temperatures, a condition no forecaster controls, while the 6,623 MW shortfall from December 2025 is a gap that weather cannot close. The 13-state footprint will carry both facts into the next outlook.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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