Why data centers are straining the power grid
Why data centers are straining the power grid is now the subject of a report the Department of Energy must write by law at least once every 3 years. The Grid Deployment Office put a new draft of that National Transmission Needs Study out for public comment on July 9, 2026, closing September 8, 2026. The study itself states that the grid built for an older pattern of electricity use must change to keep up with data centers built to run artificial intelligence, and that load growth is accelerating with construction of new data centers. Reading the study directly turns up a detail no other coverage carries, that the majority of that congestion cost concentrates in just 5% of hours each year.
That cost is transmission congestion, the extra expense of routing power a longer, costlier way when the grid cannot carry all the electricity utilities want to move at once. The study puts that cost at 11 billion dollars in 2023, down from a high of 21 billion dollars in 2022.
The grid is not being built fast enough to keep up
The United States energized 85,000 circuit miles of new, upgraded or rebuilt transmission lines rated 69 kilovolts or higher, strong enough to carry electricity long distances, between 2016 and 2024, the study states. The annual pace ran as high as 12,500 circuit miles some years and as low as 8,700 in others through 2023, then fell to about 3,600 circuit miles in 2024, the slowest year in the study period.
The first 2 bars are the low and high ends of an 8 year range, 2016 to 2023, not individual years. The third bar is a single year, 2024.
Show the numbers
| 2016 to 2023, slowest year | 8,700 |
| 2016 to 2023, fastest year | 12,500 |
| 2024 | 3,600 |
PJM already feels the strain in a real market
PJM Interconnection, the grid operator for more than 67 million people across 13 states and the District of Columbia, told its board in January 2026 that a reform package responds directly to the continued trend of large data center loads being added to the load forecast. The board built that package from 12 proposals produced through a stakeholder process run in the second half of 2025.
PJM is establishing clear, transparent guardrails for integrating large new loads under defined conditions.
Stu Bresler, PJM Chief Operating Officer, in the same board release. Source 4.
PJM ran its capacity auction, the yearly sale where power plant owners commit 2 years ahead to have electricity ready, in July 2026. It procured 138,318 megawatts of generation and demand response but still came in 6,831 megawatts short of the reliability requirement PJM sets for itself, a standard that allows the grid to risk running short of power only once every 10 years. Adding the shortfall to what already cleared puts the total need at about 145,149 megawatts, a total this article calculates, not one PJM itself states. The price hit the regulator approved cap of 325 dollars per megawatt day, a 2.5% decrease from the prior cap of 333.44 dollars, for a total auction value of 16.4 billion dollars.
The third bar, total capacity needed, is a total calculated for this article by adding the other 2 bars, not a figure PJM itself published.
Show the numbers
| Capacity procured | 138,318 |
| Short of PJM target | 6,831 |
| Total capacity needed | 145,149 |
How much worse the risk could get by 2030
Independent modeling done for the Pennsylvania Public Utility Commission, reported by Utility Dive, projects how often PJM risks falling short of demand by 2030 using a measure called loss of load expectation. The reference scenario models 0.59, nearly 6 times worse than the planning criterion PJM sets for itself, driven mainly by data centers. A worst case scenario models 13.20, more than 100 times worse than that same criterion.
Electricity demand and supply are moving out of balance, and the status quo is not sustainable.
Steve DeFrank, Pennsylvania Public Utility Commission Chairman. Source 3.
PJM board chair David Mills summed it up in January 2026.
This is not a yes/no to data centers.
David Mills, PJM Board Chair and Interim President and Chief Executive Officer, the title used in source 4 where this quote appears. Source 4.