HD Intelligence Desk · August 1, 2026

The Cost-Shift Bill Comes Due: PJM's Monitor Puts Data Centers at 46% of Capacity Cost — and Every Grid Now Has to Answer for It

Published August 1, 2026

What Happened

PJM's independent market monitor (Monitoring Analytics, Joseph Bowring) reported in late July that data centers drove roughly $6.3B — about 38% — of the cost of PJM's most recent capacity auction ($16.4B total), and $29.4B, or ~46%, across the last four auctions combined. Bowring called the load surge a "paradigm shift" PJM is treating as "business as usual" and pressed for a separate capacity auction for large loads. The report lands three weeks before the August 17 deadline for all six RTOs/ISOs to answer FERC's June 18 Section 206 show-cause orders on large-load interconnection.

Why It Matters

This is the clearest dollar-denominated proof yet that grid-tied hyperscale load is now the marginal cost driver in the largest U.S. capacity market — and that the political and regulatory system will move to make new load pay its own way. For HD, it hardens the core thesis: the scarce, defensible asset is powered land with a contracted, ring-fenced path to energy, not a queue position exposed to socialized-cost backlash. Markets that can isolate large-load cost (take-or-pay tariffs, co-location, behind-the-meter) will keep attracting capital; markets where load and ratepayers collide (PJM, increasingly the Northeast) will see tariffs, moratoria, and slower approvals — raising the value of sites already de-risked on power.

Texas Sets a Forever Peak — and Doubles Its Own Forecast

ERCOT set an all-time demand record of 91,308 MW on July 22, and CEO Pablo Vegas now projects demand nearly doubling to ~175,000 MW by 2032, explicitly "driven by a massive influx of data centers." ERCOT is rebuilding its load-forecasting method as large loads overwhelm the old one; ~460,000 MW of generation sits in queue (≈70% solar/storage, ~78,000 MW gas). The read for HD: Texas remains the fastest at-scale path to power, but SB6's large-load interconnection and curtailment rules are the variable to watch — the state is pricing in the right to disconnect big loads under stress, which shifts risk onto the interconnecting customer.

The Moratorium Line Moves North

New York enacted the first statewide hyperscale data-center moratorium (Gov. Hochul, ~one-year pause while standards are developed). New Jersey's Assembly passed a large-load tariff bill (≥50 MW, 85% take-or-pay for 10 years, contiguous-site aggregation) now awaiting Gov. Sherrill's signature. Both confirm the pattern: the Northeast is choosing ratepayer protection over speed. This is bearish for PJM/NYISO time-to-power and, by contrast, bullish for pre-powered, tariff-clear inventory in ERCOT, SPP, and the friendlier MISO subregions.

Fuel & Forward Price

EIA's July STEO raised its Henry Hub forecast to $3.67/MMBtu for 2026 and $3.49 for 2027, though spot cleared near $2.81 in mid-July on weak near-term weather. Cheap near-term gas keeps behind-the-meter and co-located gas economically live as a bridge to grid power — a lever most useful precisely in the markets (ERCOT, SPP) where HD wants to be building.