A persistent heat dome over the eastern U.S. during the July 4th holiday weekend challenged power grids, particularly PJM Interconnection, which serves 67 million people across 13 states from the District of Columbia to Chicago. While earlier forecasts predicted record-breaking demand of 166.2 gigawatts (GW), usage on July 2nd reached 162 GW, the second-highest level ever recorded by PJM. This demand was notably higher than the anticipated summer peak of 156.4 GW, indicating the severe impact of the extreme heat. The record, set at 165.6 GW in August 2006, might have been surpassed if PJM hadn't implemented emergency measures, including programs that pay large energy consumers, such as data centers, to reduce consumption.
The strain on the grid led to a significant increase in wholesale power costs. PJM's independent market monitor reported that the total cost of wholesale power for the first five months of this year reached $40 billion, a 68% increase from $23.8 billion in the year-earlier period. This surge is partly attributed to the booming demand from data centers, which accounted for $3.8 billion, or about 23%, of the overall $16.25 billion year-over-year increase in wholesale power costs. Heavy power line congestion, particularly in northern Virginia, a hub for data centers, contributed to price spikes exceeding $2,000 per megawatt-hour.
PJM operated under an emergency declaration (the lowest of three levels) for three consecutive days, requiring all power plants to be available at maximum capacity. Despite these efforts, some generation outages occurred in the mid-Atlantic region, totaling around 9.5 GW, significantly more than initially forecast. While PJM received emergency authorization from the Energy Department to direct data centers to switch to backup generation, this authority was ultimately not utilized. Other regional grids, including the New York Independent System Operator (NYISO) and the Midcontinent Independent System Operator (MISO), also experienced elevated demand, with MISO seeing its highest demand in at least 10 years at 121 GW on June 3rd. Localized power outages affected over 76,000 customers across various states, including Michigan, New York, and Wisconsin. The incident highlights growing concerns about the grid's capacity to handle rising electricity demand driven by both climate change and the proliferation of data centers.
