How are data centers affecting commercial electricity prices by region?
The effect depends less on how many data centers a state has than on how its grid pays for new demand. In PJM, data center forecasts flow straight into capacity prices every business pays. In Texas, the Southeast and the West, the path is slower and different.
Data centers raise commercial electricity prices most where the grid buys capacity in forward auctions and the new load arrives faster than new supply, which describes PJM: its market monitor attributes $29.4 billion of capacity costs across the last four auctions to data center load, and commercial prices in Ohio, Virginia and Maryland rose more than 20% in the first half of 2026. In MISO, capacity prices fell for 2026/27 as supply grew. In Texas, prices have been nearly flat while the state tightens large-load rules. In the Southeast and West, regulators are creating separate classes and contract terms for very large loads, so the cost shows up later and through rate cases. Discovery Energy tracks the buildout in its Data Center Index and buys electricity for multi-site companies in the deregulated markets.
01 / 09
Three ways data center demand reaches a business bill
Data centers used about 4.4% of U.S. electricity in 2023, and Lawrence Berkeley National Laboratory projects 6.7% to 12% by 2028. The demand runs around the clock, so it adds to every peak, summer and winter. It reaches other customers through three channels:
Capacity
Grids that buy capacity in auctions years ahead price in forecast data center load before the buildings exist. That is the main channel in PJM.
Wholesale energy
More demand calls on more expensive plants in more hours. Researchers at the Federal Reserve Bank of Dallas estimate existing data centers have raised wholesale prices by 2% to 6% on average nationwide.
Transmission and distribution
New substations and lines are paid for through utility rates unless regulators assign the cost to the large customer.
Wholesale power is roughly half of a typical retail price, so a wholesale increase reaches retail bills at about half its size. Capacity and transmission, which used to be small lines on a commercial bill, are now where most of the change shows.
02 / 09
PJM (Mid-Atlantic, Ohio Valley and northern Illinois): the largest effect
PJM's capacity price was $28.92 per MW-day for 2024/25. It reached $329.17 for 2026/27, $333.44 for 2027/28 and $325 for 2028/29, the third auction in a row at the price cap; the 2028/29 auction cleared 6,831 MW short of PJM's reliability requirement. PJM's Independent Market Monitor estimates that data center load accounted for about $6.3 billion, or 38%, of the $16.4 billion cost of the 2028/29 auction, and $29.4 billion across the last four. It also put the data center share of PJM's wholesale power cost at about $10.48 per MWh, or 9%, in 2026 through July.
Total wholesale power cost in PJM rose 75.5% year over year in the first quarter of 2026, to $136.53 per MWh, with capacity costs up nearly 400%. Retail prices followed:
| State | 2025 | 2026 | Change |
|---|---|---|---|
| Ohio | 11.07 | 13.78 | +24.5% |
| Virginia | 9.05 | 11.11 | +22.8% |
| Maryland | 14.11 | 17.12 | +21.3% |
| District of Columbia | 19.74 | 23.50 | +19.0% |
| U.S. average | 13.06 | 13.86 | +6.1% |
| Georgia | 11.56 | 11.52 | −0.3% |
| Oregon | 10.59 | 10.57 | −0.2% |
Capacity costs are shared across the whole region, so a manufacturer in New Jersey or Pennsylvania pays for data center load built in Virginia or Ohio. States have responded with large-load tariffs aimed at the data centers themselves: Ohio's tariff for new AEP Ohio data centers above 25 MW requires them to pay for at least 85% of subscribed capacity for up to 12 years; Virginia's new GS-5 class starts at 25 MW; Maryland's large-load tariffs are before the PSC. Discovery's briefings cover Ohio, Virginia, Maryland, Pennsylvania, New Jersey and Illinois. Those tariffs protect against future cost shifts; they do not undo capacity prices already set.
What PJM buyers can do: manage the peak load contribution, decide deliberately whether capacity is fixed or passed through, and buy terms with the capacity results in view. See what to do about PJM capacity charges.
03 / 09
MISO (Midwest and mid-South): relief this year, risk next
MISO's capacity auction moved the other way for 2026/27. Annualized prices fell to $116 to $126 per MW-day from $212 to $217 the year before, because about 4% more capacity was offered, much of it solar and new generation. The summer season still cleared at $424.30 per MW-day in the North and Central zones, down from $666.50, so summer peaks remain expensive. MISO itself says capacity additions need to continue given expected growth from new large loads. Most of MISO is regulated, so these costs reach businesses through utility rates rather than supplier prices, except in the deregulated parts of Illinois and Michigan's capped retail access program.
04 / 09
ERCOT (Texas): flat prices, tighter rules
Texas has one of the largest data center pipelines and some of the lowest commercial prices. ERCOT has no capacity market, so new demand shows up in wholesale prices during high-demand hours and in transmission spending, which is charged through the four summer peak intervals (4CP). Commercial prices in Texas averaged 8.62 cents per kWh over the 12 months to July 2026, second lowest in the country and barely changed since 2021.
The state is changing the rules before the load arrives. Senate Bill 6, signed in June 2025, requires interconnection standards for loads of 75 MW or more. The PUCT's draft rule, published in March 2026, would require study fees, financial security of $50,000 per MW of requested load and disclosure of permitting progress. In August 2026, the governor directed regulators and ERCOT to audit every data center seeking a grid connection, citing more than 474 GW of requests. For businesses, the 4CP intervals remain the cost to manage; see ERCOT 4CP transmission charges.
05 / 09
The Southeast: regulated utilities, delayed effects
In vertically integrated states, data center costs reach other customers through integrated resource plans and rate cases, which take time. Georgia Power's pipeline of prospective large-load projects grew from about 16,000 MW in 2023 to roughly 69,000 MW by December 2025, about 80% of it data centers. In January 2025, the Georgia PSC approved a rule allowing Georgia Power to bill new customers above 100 MW under special terms, including minimum bills, longer contracts and upstream generation, transmission and distribution costs, with contracts submitted to the PSC for review. Georgia's commercial prices were flat in the first half of 2026. Whether that holds depends on how much of the forecast is built and how the commission allocates the generation built for it.
06 / 09
The West: separate classes for data centers
Data centers make up roughly 15% of the current load of Oregon's investor-owned utilities. A 2025 Oregon law created a separate rate class for data centers above 20 MW, and in July 2026 regulators approved Portland General Electric rates that raised data center rates by an average of 29% while lowering commercial rates by 2.1% and residential rates by 1.3%. It is the clearest example so far of a state assigning data center costs to data centers, and commercial customers there have seen a small decrease.
07 / 09
Industrial prices in the main data center states
Industrial prices, which matter most to manufacturers, moved less evenly. The figures below are single-month readings from Discovery's Manufacturing Cost Pressure Index, which republishes EIA data by state; one month can be noisy, and each state page shows the 10-year trend.
| State | Grid | Cents per kWh | Change |
|---|---|---|---|
| Ohio | PJM | 9.75 | +15.1% |
| Texas | ERCOT | 7.21 | +12.3% |
| Illinois | PJM and MISO | 11.33 | +11.3% |
| Pennsylvania | PJM | 10.47 | +8.4% |
| New Jersey | PJM | 16.24 | +7.8% |
| Maryland | PJM | 12.19 | +7.2% |
| Virginia | PJM | 9.98 | +6.2% |
| North Carolina | Regulated (Southeast) | 8.23 | +5.5% |
| Oregon | West | 8.75 | +3.7% |
| Indiana | MISO and PJM | 9.28 | +3.3% |
08 / 09
What business buyers should do, by region
PJM
Check every capacity tag, plan for the summer peak hours, choose capacity pass-through or fixed on purpose, and price terms past the 2029/30 collar knowing the cap may end.
MISO
Use the lower 2026/27 capacity price to fix terms where you can buy, and watch summer peaks.
ERCOT
Manage the 4CP intervals and keep an eye on how large-load rules change transmission cost allocation.
Regulated states
Follow your utility's rate cases and resource plans, and audit your rate class and riders before new rates take effect.
Everywhere
Make sure demand and capacity charges on your bills are calculated correctly. A rising line is not always the market; sometimes it is an error.
Discovery's Data Center Index tracks data center announcements, campuses and utility filings by state every day, and the Latest updates page adds what each change means for energy buyers. For a portfolio across several of these regions, Discovery runs one RFP across every deregulated state and audits bills everywhere else.
09 / 09
Questions about data centers and electricity prices
How are data centers affecting commercial electricity prices by region?
Most in PJM, where forecast data center load raised capacity auction prices that every customer pays; commercial prices in Ohio, Virginia and Maryland rose more than 20% in the first half of 2026. MISO's capacity prices fell for 2026/27. Texas prices were nearly flat. In the Southeast and West, regulators are assigning more of the cost to large loads, so effects are slower and smaller so far.
Do data centers raise prices in every state?
No. Where a region had spare supply, new load can spread fixed grid costs over more sales. Researchers describe the overall relationship between load growth and prices as mixed. The effect depends on spare capacity, how the market pays for new demand, and the rules for large customers.
Why does a manufacturer in New Jersey pay for data centers in Virginia?
Because PJM buys capacity for the whole region in one auction, and the price applies across zones. Forecast load anywhere in PJM raises the price everywhere in PJM.
Will capacity prices come down?
Prices are capped through the 2029/2030 PJM auction. PJM's simulations without the cap cleared far higher, which suggests pressure remains unless supply catches up or rules for large loads change.
Sources
- Lawrence Berkeley National Laboratory, 2024 United States Data Center Energy Usage Report, 4.4% of U.S. electricity in 2023, 6.7% to 12% by 2028.
- Coverage of Federal Reserve Bank of Dallas research on data centers and wholesale prices, 2% to 6% increase in wholesale prices.
- PJM, 2028/2029 Base Residual Auction results (July 14, 2026)
- BTW Media, Monitoring Analytics attributes $6.3 billion (38%) of the 2028/2029 auction and $29.4 billion across four auctions to data centers
- Utility Dive, data center load made up 9% ($10.48 per MWh) of PJM wholesale power cost through July 2026
- The Energy Mag, PJM wholesale power cost up 75.5% in Q1 2026 to $136.53 per MWh
- EIA Electric Power Monthly, Table 5.6.B, commercial prices January to June 2026 and 2025, as compiled by StartBusinessByState (September 2026)
- EIA data compiled by StartBusinessByState, commercial prices for the 12 months to July 2026, Texas at 8.62 cents per kWh.
- American Public Power Association, MISO 2026 Planning Resource Auction
- MISO status update to the Missouri PSC (May 28, 2026), capacity additions needed for new large loads.
- Greenberg Traurig, Texas Senate Bill 6 update (March 2026), draft 16 TAC §25.194 for loads of 75 MW or more.
- Shipley Energy via Stacker, How data center demand is reshaping electricity costs across the US (November 2026), Texas audit directive, Georgia Power pipeline, Oregon rates and Ohio tariff.
- Georgia Public Service Commission, PSC approves rule to allow new power usage terms for data centers (January 23, 2025)
- Shipley Energy via Stacker (syndicated), Oregon data center share of load and Portland General Electric rate changes.
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