PJM, the largest U.S. power grid operator, has declared a federal emergency, instructing utilities to reduce electricity consumption across its service area, which covers 67 million people in the Mid-Atlantic, South, and Washington D.C. This critical measure comes as generator outages, overloaded transmission lines, and a massive surge in air conditioning use due to a prolonged heatwave threaten to cause widespread blackouts. Consequently, spot wholesale electricity prices in key areas like northern Virginia, a global hub for data centers, have skyrocketed to over $2,000 per megawatt hour.
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The operator of the largest U.S. power grid, PJM, announced on Friday a federal alert, initiating emergency measures to drastically cut electricity consumption across its vast territory. This critical action is a direct response to a perfect storm of generator outages, severe overloading on its transmission lines, and an unprecedented surge in air conditioning demand, all exacerbated by a prolonged, sweltering heatwave gripping the region.
PJM has instructed utilities within its service area to enforce contractual agreements with customers, compelling them to reduce their electricity usage during this emergency. The grid operator is responsible for supplying power to approximately 67 million people across the Mid-Atlantic, Southern U.S., and the Washington, D.C., metropolitan area.
A man walks with his shirt partially off amid a heatwave at The Great American State Fair on the National Mall in Washington, D.C., July 1, 2026.
Cheney Orr | Reuters
The extreme strain on the grid has led to dramatic financial repercussions. Spot wholesale electricity prices in northern Virginia, a crucial hub housing the world's largest concentration of data centers, have skyrocketed past $2,000 per megawatt hour this week. This figure stands in stark contrast to the typical $40 per MWh observed during periods when PJM is not under duress. Industry analysts and PJM’s operational data attribute this massive price surge primarily to the exorbitant cost of delivering power through severely congested high-voltage transmission lines.
