Persistent, record-high capacity prices in PJM have fueled debate over their causes, with power plant retirements and new data center demand most often cited.

A report released this week by Monitoring Analytics, the independent watchdog of PJM’s electricity markets, points to a different driver. The report found that utility load forecasts for future data centers were a primary factor behind the latest capacity auction’s record prices.

According to the analysis, speculative data center load forecasts increased capacity prices by 61%, while existing and committed data center load accounted for just a 4% increase. The market monitor estimated that forecasts tied to unbuilt data centers could add more than $47 billion in capacity costs over a three-year period.

“It is misleading to assert that the capacity market results are simply a reflection of supply and demand,” Monitoring Analytics said, citing unprecedented uncertainty in utility load forecasts tied to potential large-scale data center development.

The Ohio Manufacturers’ Association has previously raised concerns about the accuracy and transparency of utility load forecasts, warning that speculative assumptions can artificially inflate capacity prices. While some forecasted data center projects may be built, much of the projected load remains uncertain, the report said, underscoring the significant role these forecasts play in driving higher costs. 1/8/2026