As much of the country suffers through hot and humid temperatures, many people are bracing for a higher electric bill this month. But air conditioning is not the only culprit when it comes to increased energy prices in Ohio. 

A perfect storm of economics is hitting PJM interconnection, which operates the electrical grid in Ohio, as well as 12 other states and Washington, D.C. PJM has long warned of the growing imbalance between electricity supply and demand, and for the first time, consumers are feeling the impact. 

Each year, PJM has an auction to set its capacity prices, which make up part of the generation charges on an electric bill. Capacity is a fee charged by power companies to ensure electricity will be available in the future. 

PJM’s capacity auction set last year hit a record high, leading to an estimated 10-15% increase in electricity costs for the average household, according to the Northeast Ohio Public Energy Council. Another auction held July 22 will lead to an estimated 5% hike next year, NOPEC says.

Demand for electricity has skyrocketed in recent years due to the boom of artificial intelligence, which depends on large, energy-guzzling data centers. Because of the way energy markets are structured, according to Sean O’Leary, customers end up paying more for those data centers before they even exist.

“The 10-15% increases that we're seeing in electric rates right now are largely due to anticipated data centers,” said O’Leary, a senior researcher at the Ohio River Valley Institute. “This is an extremely difficult situation to predict … There is a real question as to whether all of the data centers that PJM is anticipating will be built, will ever actually come to fruition.”

At the same time, not enough new providers are connecting to the system as older energy infrastructure crumbles. 

“Stations that generate power are decreasing. They've been retiring,” said John Gordon, the director of Advanced Energy United. “Much of our electric infrastructure — our poles and our wires and our generation — is quite old, at the end of their useful life, and they're becoming uneconomic to run.”

Gordon placed the blame for that supply deficiency on PJM. 

“It's really PJM's job to try and make sure new supply is coming online,” Gordon said. “They've really struggled, I mean, some would call it a failure to bring on new supply to replace the retiring generation fast enough.”

In a statement, Jeffrey Shields, senior manager of external communications for PJM, emphasized the company’s commitment to quickly approving projects. It began transitioning to a new generation interconnection process in 2023, with the hopes of expediting the process for projects most likely to get built. 

“PJM has studied and approved 46,000 MW (enough to power about 40 million homes) that have been slow to construct due to reasons outside of PJM’s control, including global supply chain, state/federal permitting and financing challenges,” Shields wrote.

Shields added that PJM plans to review 575 more projects in the next 18 months. More than 90% of those projects involve renewable energy, which faces major challenges in Ohio. 

“The state — and in many cases, local jurisdictions, counties and municipalities — have thrown up barriers to the construction of wind and solar plants in particular,” O’Leary noted. 

“But going up from that level, we've recently seen changes at the federal level in President Trump's ‘Big Beautiful Bill,’” he added. “There were a number of subsidies that had previously been available for wind and solar development that are going to be phased out over the next few years.”

Regardless of who or what is to blame for the energy supply and demand imbalance, the stakes remain the same.

“Higher prices are really indicative of the fact that we're short on supply, and that, of course, can lead to what we call the business a ‘resource adequacy crisis,’” Gordon said. “Blackouts, in layman's terms, where PJM literally has to shut power off or have rolling blackouts. That's what happens if the supply imbalance gets bad enough.”