The 13 state grid operator's capacity auction cleared at $329/MW day, up from $29 in 2024. The bill lands on the 'Made in America' industrial base the same AI buildout is meant to support.
PJM Interconnection, the grid operator that runs the power market from Virginia to Illinois, held a forward auction in July for grid reliability capacity in the 2026/2027 delivery year. The clearing price: $329.17 per megawatt-day, up from $28.92 in 2024. That is roughly an 11-fold jump in two years, and the bill lands on the Rust Belt manufacturers who already run the heaviest continuous loads in the footprint, according to a Reuters analysis published Tuesday.
The mechanism is not a retail rate, a storm, or a tariff. PJM's capacity market is a forward auction for reliability: generators get paid a daily rate per megawatt to be available during the tightest hours of the year. The clearing price rises whenever expected demand outruns expected supply, and the resulting cost flows back to factories through monthly capacity charges on their utility bills, separate from the per-kilowatt-hour rate they pay for actual energy. The last three Base Residual Auctions have cleared higher than the one before, as new hyperscaler campuses in Virginia, Ohio, and along the I-95 corridor have added load.
A 141-year-old Ohio brickmaker, Belden Brick, saw its monthly electricity bill climb from $1,600 to $12,000 once the new capacity charge reset on its service. A few hundred miles down the road, Ohio-based steelmaker Metallus has reported electricity costs up 70% since 2024, adding roughly $15 million a year to its energy spend.
The Steel Manufacturers Association estimates US steel producers concentrated in the PJM-served Rust Belt are collectively paying tens of millions of dollars per year in higher power costs. Electricity already accounts for 20 to 40% of total steel-production costs at electric-arc-furnace shops; each furnace draws 40 to 200 megawatts, and the combined peak load across the US steel industry is around 11 gigawatts, roughly the output of eleven large nuclear reactors. Factory electricity bills in PJM are rising faster than those of other business or residential customers in the same region.
The counterforce is not large enough to cancel the bill. Data-center construction pulls roughly one million tons of steel a year into the same regional supply chain, but the orders on the books go to the same furnaces losing margin to the capacity auction.
That is the political collision. President Trump's "Made in America" plan depends on the Rust Belt industrial base remaining cost-competitive on power. The same administration's policy backing for hyperscale AI buildout is the load growth now baked into PJM's 2026 auction. As Ars Technica framed the underlying reporting, the two priorities are repricing each other in real time.
Two gaps are still open. PJM has not yet published a post-auction statement attributing the 2026 clearing price specifically to data-center demand growth, and the White House has not addressed the trade-off on the record in the materials available. The next test is the 2027 capacity auction; if hyperscaler campus load forecasts keep rising, the clearing price is set up to break the existing cost model again.