Power Prices Surge as Winter Storm Spikes Demand in US Data Center Alley

Power prices in the largest U.S. grid rose sharply on ⁠Sunday as demand in a region with the world's largest concentration of energy-hungry data centers surpassed forecasts during a deep freeze gripping half the country.

Real-time wholesale electricity prices topped $1,800 per MWh early Sunday in Dominion Energy's Virginia territory, up from $200 per MWh on Saturday morning. ‍Virginia houses the biggest cluster of data centers in the world, ‍which are used to power things like artificial intelligence and have been responsible for rising power demand and prices in swaths of ⁠the country.

The demand spike began late Saturday night, according to data from PJM Interconnection, the largest U.S. regional grid that serves 67 million people, as Winter ​Storm Fern swept across parts of the country.

PJM predicts an all-time winter demand record on Tuesday, partly due to data center electricity needs. Dominion has said extended frigid temperatures this week, along with ‍heavy snow, have the potential to be one of the largest winter events to affect ⁠the utility's operations.

PJM predicts demand at 147.2 gigawatts, which would beat the current record winter electricity demand of 143.7 GW set in January 2025.

Dominion was not immediately available to comment about Sunday's price moves. In the utility's zone of the PJM territory, demand approached about 23 ⁠gigawatts per hour at 10 a.m. ​EDT, about 5% higher ⁠than the original forecast, according to PJM data.

Spot wholesale electricity prices across the U.S. have been elevated throughout ‍the weekend as regional grids strain to meet surging demand. When demand is higher than the forecasts for utility ‌companies, they can be forced to pay elevated spot prices for electricity to meet the demands of their residential and business customers.

Regional grids feed their power into the local ⁠distribution lines that ​bring electricity to homes ‍and businesses. Those local power lines are showing disruptions, with nearly 900,000 customers without power on Sunday, according to PowerOutage.us, with more than 300,000 ‍in Tennessee and more than 100,000 each in Mississippi, Texas and Louisiana.

Other states affected included Kentucky, Georgia, Virginia and Alabama.