The country’s biggest power grid operator declared a federal emergency alert on Friday, ordering utilities to slash electricity use across its service territory as it struggled to keep up with demand driven by a prolonged heat wave.
PJM, which supplies electricity to 67 million people across the Mid-Atlantic states, parts of the South, and the Washington, D.C. area, said it directed utilities to cut power to customers who have pre-existing contracts agreeing to reduce their consumption during grid emergencies.
The grid operator is facing a combination of serious problems at once — generators going offline, severe overloading on high-voltage transmission lines, and a dramatic jump in air conditioning use as temperatures remain dangerously high across the region.
The financial impact has been striking. In northern Virginia — home to the world’s largest concentration of data centers — spot wholesale electricity prices have climbed above $2,000 per megawatt hour this week. Under normal conditions, when PJM is not under stress, prices typically run around $40 per megawatt hour.
Industry analysts and PJM’s own operations data indicate the price explosion is largely tied to the high cost of moving electricity across heavily congested transmission lines.
