The largest US grid paid a record $1 billion in Q1 to power plants that lost money.

According to data from the.

The'so-called 'uplift payments' by PJM interconnection, which cover a populated region from Washington D.C. up to the Great Lakes went mainly to?power plants that were dispatched even though they did not earn enough on the wholesale electricity markets to cover the costs of their natural gas.

These huge payments are ultimately borne by the ratepayers via their electricity bills. They reflect an aging system that is already struggling to meet demand from data centres feeding the AI boom.

The payments made to these uneconomical power plants are a clear indication of the problems in the PJM System, said David Lapp. Lapp is the director of Maryland's Office of People's Counsel (a state agency which advocates for residential utility customers).

Lapp continued, "And it is a lot of money that goes to something that ultimately does not provide a long-term fix."

According to PJM, spot gas prices in the Eastern United States spiked in January to unprecedented levels as temperatures plummeted. Many hubs traded above $100 per million British Thermal Units (mmBtu).

The average price per mmBtu was less than $8 in that particular month.

PJM’s uplift credit compensated generators who had lost fuel in order to follow?dispatch instructions and maintain a reliable electricity flow.

According to data updated on 10 May, the first-quarter payment total of $990 millions for power plant uplifts exceeded the combined annual amount of $764 in 2025. This was a year which included a polar vortex winter and a record demand.

According to data, it dwarfed the $270 millions in uplift payments PJM paid out during 2024.

PJM issued a statement that said, "During periods such as 'Winter Storm Fern' in January, PJM needed all the?power production available to prepare for impacts such as high demand, extreme low temperatures, and higher than usual generation outages."

HARBINGER

Analysts expect more large-scale expenditures in the future. The reason is that the buffer against blackouts of PJM (which manages electricity supply for 67,000,000 people) is almost 40% below the target established by the regional grid.

This is due to the fact that the infrastructure needed to meet the demand for data centers and the surge in demand has outpaced the rate at which it can be constructed. This shortfall will only grow in the next decade as more large loads are added to the system. PJM stated this in a report from May.

The increase in uplift credits shows how PJM has become more vulnerable to extreme weather conditions, power plant failures, congestion on transmission lines, and fuel supply disruptions.

PJM officials stated that the grid is experiencing a fundamental mismatch in terms of how quickly data center demand grows and how quickly new supply can be followed.

According to data, during the cold spell of the first quarter, Maryland's Chalk point power plant received uplift payments totaling $205 million. This was the largest amount paid for any one power plant.

Chalk Point, despite its age is one of PJM’s best pieces of protection against rotating blackouts. It covers a grid area that includes metropolitan Baltimore and Washington D.C. which struggles to get enough electricity from elsewhere on its overloaded powerlines.

Lapp stated that Maryland is vulnerable to transmission bottlenecks because too many power plants are retired.

They blame the spike in gas prices during this stressful period for high payments. You know, "the real problem is that you don't even have enough capacity," said Lapp.

Rockland Capital of Houston, the owner of the plant, refused to comment for this article.

Exelon Corp., whose subsidiary serves metro Baltimore, announced that it will add about 37 miles in the area, to offset retirements of significant generations.

Will Sauer's, Exelon Vice President for Federal Affairs, stated that this is only one example of how transmission infrastructure investments in Maryland help prevent voltage collapse, but also transfer large amounts power, reduce congestion and save Maryland consumers billions of dollars. (Reporting by Tim McLaughlin, Editing by Hugh Lawson).

(source: Reuters)