Power prices surge as winter storm spikes demand in US data center alley
A worker uses a snowblower to clear snow from the sidewalk, as a major winter storm sweeps across a large swath of the United States, in Washington, D.C., on January 25, 2026. REUTERS/Elizabeth Frantz (https://www.reuters.com/item/winter-storm-spreads-across-a-large-swath-of-the-united-states/dGFnOnJldXRlcnMuY29tLDIwMjY6bmV3c21sX1JDMkY4SkFKTVZLTA%3D%3D/?utmmedium=rcom-article-media&utmcampaign=rcom-rcp-lead)
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BOSTON, Jan 25 (Reuters) - Power prices in the largest U.S. grid rose sharply on Sunday as demand in a region with the world's largest concentration of energy-intensive data centers soared during a deep freeze affecting half the country. Real-time wholesale electricity prices reached a staggering $1,800 per MWh early Sunday in Dominion Energy's Virginia territory, a significant jump from $200 per MWh on Saturday morning.
Virginia is home to the world's largest cluster of data centers, which power artificial intelligence and have been driving rising power demand and prices across the country. The demand spike began late Saturday night, according to data from PJM Interconnection, the largest U.S. regional grid serving 67 million people, as Winter Storm Fern swept across parts of the country.
PJM predicts an all-time winter demand record on Tuesday, partly due to the electricity needs of data centers. Dominion has warned that extended frigid temperatures and heavy snow this week could result in one of the largest winter events impacting its operations. PJM forecasts demand at 147.2 gigawatts, surpassing the current record winter electricity demand of 143.7 GW set in January 2025.
Dominion (D.N) was not immediately available for comment on Sunday's price surge. In the PJM territory, demand approached 23 gigawatts per hour at 10 a.m. EDT, about 5% higher than the original forecast, according to PJM data.
Spot wholesale electricity prices across the U.S. have been elevated throughout the weekend as regional grids struggle to meet the surge in demand. When demand exceeds forecasts, utility companies may be forced to pay higher spot prices for electricity to meet the needs of their residential and business customers. Regional grids feed power into local distribution lines, which are experiencing disruptions, leaving nearly 900,000 customers without power on Sunday, with significant impacts in Tennessee, Mississippi, Texas, Louisiana, Kentucky, Georgia, Virginia, and Alabama.
Reporting By Tim McLaughlin; Editing by Liz Hampton and David Gregorio
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