US Power Grid Faces Record Costs Amid AI Boom, Calls for New Plants

The largest US power grid, operated by PJM Interconnection LLC, saw a record $16.1 billion in payouts to generators and suppliers, with costs per megawatt rising to $329.17. The surge in electric demand, driven by the AI boom, has led to disagreement over which power resources are best suited to satisfy needs. Utilities and energy groups are calling for new plants, but this may add to consumer costs, prompting concerns from politicians.

The largest US power grid, operated by PJM Interconnection LLC, saw a record $16.1 billion in payouts to generators and suppliers during the latest auction [1]. This represents a significant increase from last year's record of $14.7 billion, with costs per megawatt rising to $329.17 [2]. The surge in electric demand, driven primarily by the AI boom, has led to higher residential utility bills and sparked debate over the best power resources to meet these needs.

The AI boom has led to a massive buildout of data centers, which are consuming vast amounts of electricity. This has put a significant strain on the grid, leading to higher costs for consumers. The shares of independent power producers such as Constellation Energy Corp., Talen Energy Corp., NRG Energy Inc., and Vistra Corp. gained in late trading on Tuesday, reflecting the increased demand for their services [2].

While the power industry is coalescing around new plants as a solution, this approach may add to consumer costs at a time when politicians are sensitive about energy inflation. The capacity auction has a compounding impact on customers, with rising demand, shrinking supply, and aging infrastructure adding to costs [2].

Verizon Communications Inc. (VZ) has also seen a significant surge in its AI Connect offerings during its second quarter earnings call, with sales nearly doubling to $2 billion since its launch earlier this year [3]. This rapid growth highlights strong market demand for the company’s next-generation enterprise solutions, particularly those designed to facilitate AI inferencing – the real-time application of AI models.

In conclusion, the AI boom has led to a significant increase in electric demand, driving up costs for consumers and utilities alike. While new plants are being proposed to address the shortage, the long-term impact on consumer costs remains a concern.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-22/ai-boom-keeps-key-power-costs-at-record-on-largest-us-grid
[2] https://finance.yahoo.com/news/ai-boom-keeps-key-power-201426996.html
[3] https://www.benzinga.com/markets/earnings/25/07/46537805/verizons-ai-connect-sales-surge-to-2-billion-fueled-by-real-time-inferencing-demand