As I see it, Kendal-Crosslands is about to see a big jump in its electricity bill. Some of it is due to extreme winter weather—but that’s behind us now (I hope). What’s just getting started is the dramatic rise in electrical demand due to the data centers that are planned to support the enormous energy demands of AI. Those data centers, many of which are still just speculative, won’t actually start using the electricity for years (if ever). But because of the perverse logic of the way our regional electrical grid is funded, we’re starting to pay for it now.

Bitter weather and record-breaking electricity demand. The bitter cold of late January and early February was unprecedented. It’s not so much that the cold was so extreme (although it did break some records) but that it was so persistent.

Electricity demand in our area was correspondingly high and persistent. Our regional grid operator, PJM, reported that it “experienced hourly winter peak loads of 130 GW and above for eight consecutive days (from Jan. 26–Feb. 2, a first for the winter season)”. Whether any of those peaks might be high enough to rank among PJM’s top five annual peaks for 2026 is a topic for another blog post.

PJM managed to get the region through the extreme cold without blackouts or major emergencies. It did have to arrange for backup generation by allowing 15 generators to run in excess of their environmental permit levels.

Here at Kendal-Crosslands, we probably had unusually high electricity use in January-February. (That’s based on the temperature. I haven’t seen any numbers yet.) I would expect our bills to be significantly higher than they have been in previous January-February periods.

Data centers and the capacity charge. We are also beginning a new year for our “capacity charge,” a surcharge levied by PJM on all its “commercial” customers (that includes us). For the last couple of years, the capacity charge has been a small percentage of our bill, but that’s changing this year. PJM has announced an increase of over 800%, which means it could add 20%-30% to our bill.

The capacity charge is intended to be used to secure a cushion of emergency power for future years. But the rapid development of artificial intelligence, and the vast quantity of electricity required to run the necessary data centers, has thrown a monkey wrench into the capacity-charge process.  

I wrote about PJM’s capacity charge and the role of the data centers a few months ago, so I won’t say much more about that here. I’ll just say it isn’t working as intended. There’s a good chance that the demand for electricity will grow faster than the supply in the coming years. If it does, regular users (like us) will get both the bills and the blackouts, while the data centers get the supply of electricity that our capacity charges have pre-paid for.

We are fortunate that cost of electricity is a small part of our budget here at KCC (it is a little less than 2%). Even if capacity charges continue to grow (as they surely will), the impact on resident fees will be somewhat limited.

But I think PJM urgently needs to come up with a fresh approach to paying for reliable electricity, and the construction of data centers needs to be brought under control. If those two things don’t happen, I see big trouble ahead for the grid, and for our electricity bills.