The PJM Interconnection, the largest power grid operator in the United States serving approximately 67 million people across 13 states, has reported a record-high capacity auction price of $329.17 per megawatt-day for the 2026-2027 delivery year. This price represents a 22% increase from the previous year and a roughly 300% rise compared to the 2007-2023 average. The total capacity costs for electricity supply are projected to reach $16.1 billion, up from $14.7 billion in the prior auction. The surge in prices and demand is largely driven by the rapid expansion of AI data centers, which are overwhelming the grid's supply capabilities. Due to a lack of spare capacity, new data center projects will need to build their own power plants to connect to the grid. Although some additional power supply exists, about 46 gigawatts are delayed by permitting and supply chain issues, preventing timely construction. The Federal Energy Regulatory Commission (FERC) has approved a price cap at $329.17 per megawatt-day; without this cap, prices could have reached approximately $389 per megawatt-day. The rising prices have positively impacted power producers such as Talen Energy, Constellation Energy, and Vistra, with these companies seeing gains following the auction results. The increased costs are expected to affect both businesses and households served by the PJM grid, reflecting the broader impact of AI-driven electricity demand on the largest U.S. power market.