Largest US grid’s transmission constraint costs surge to $6 billion in 2026

Aug 21 (Reuters) – Congestion costs on PJM, the largest U.S. ​power grid, surged 43% to $6 billion during the first half of this year as ‌overloads on high-voltage transmission lines escalated, the grid’s independent watchdog said this week.Transmission bottlenecks on the grid during stressful events like storms were the single biggest driver of the increase in soaring wholesale electricity costs, according ​to Monitoring Analytics, PJM’s independent market monitor.Price adjustments for transmission constraints were $6 billion, up ​from $2.1 billion in the year-earlier period, according to the market monitor’s report. ⁠That year-over-year increase of $3.9 billion eclipsed the $2 billion increase in natural gas fuel costs, the report ​said.The costs ultimately will hit consumers’ monthly bills as the PJM market strains to keep pace ​with booming power demand from data centers, electric vehicles and heat pumps.The market monitor said PJM often assumes transmission lines have less capacity available than they actually do and, as a result, imposes penalty charges incorrectly ​about 94% of the time.PJM said it disagreed with the watchdog’s analysis.”The (market monitor) is wrong in ​saying PJM reduces transmission line ratings” to trigger penalties, PJM said in a statement. “PJM has not been able ‌to ⁠replicate and/or validate the assertions the (market monitor) has made regarding cost impacts.”PJM serves 67 million people in a territory that stretches from Washington, D.C., to Chicago. PJM’s real-time wholesale cost to serve electricity demand was $29.4 billion during the first six months of this year, compared to $20.4 billion in ​the first half of ​2025, according to the ⁠watchdog.During the first half of 2026, the number of five-minute periods in which PJM’s high-voltage 500-kilovolt transmission lines hit or exceeded operating limits surged ​to 8,920 from 1,865 in the year-earlier period. The violations primarily ​happened during a ⁠winter storm, the market monitor said.Among the hardest-hit areas of congestion is northern Virginia, home to the largest collection of data centers in the world. Other impacted areas include metro Baltimore and Delaware, ⁠according ​to PJM market data.Average real-time wholesale electricity costs across PJM ​rose to $72.54 per megawatt hour in the first half of 2026, from $51.75 per megawatt hour a year earlier, an increase ​of $20.79 per MWh, the report said.Reporting by Tim McLaughlin; editing by Timothy Gardner and Will Dunham