Mike Hammett

How things actually work.

Why Electric Bills Really Rose, and What It Means for Data Centers

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Mike Hammett

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High-voltage electric transmission towers along a suburban road in Buffalo Grove, Illinois with a utility truck visible
High-voltage transmission towers in the Chicago suburbs. Photo: 1250metersdeep / Wikimedia Commons (CC0).

Since publishing my original article on what data centers mean for our region, many readers have asked whether these facilities are responsible for higher electric bills. This addendum explains how Illinois’ electricity system actually works, why prices rose across PJM, and what is being done to stabilize costs.

This article is part of the broader series “What Data Centers Actually Mean for Northern Illinois Communities”. It focuses specifically on electricity – giving residents, officials, and skeptical readers a complete, source-rich breakdown of this topic without needing to sift through the whole overview piece.

In This Series

How the electric system works

Every electric bill has two main components:

  • Delivery – the poles, wires, substations, and maintenance regulated by the Illinois Commerce Commission (ICC) [39].
  • Supply – the energy you use, priced through PJM Interconnection’s wholesale electricity markets [40].

PJM manages the reliability of a 13-state grid. Each year it runs a capacity auction that pays power plants to be available during peak demand three years in advance [41]. These payments function like a hospital keeping extra beds staffed during flu season – not because they’re needed every day, but because they must be ready for unexpected surges [42].

Why prices rose – the regional imbalance

For nearly a decade, PJM had more generating capacity than it needed [43]. That changed in the mid-2020s as three forces reshaped the grid:

1. Plant retirements. PJM reports significant coal and natural-gas retirements across the region in the 2023–2027 period [44]. 2. Higher reliability margins. PJM raised its Installed Reserve Margin (IRM) from ~18% to just over 19% for the 2026/27 auction [45], which translates to several additional gigawatts of required dependable capacity across a 140–150 GW system [64]. 3. Renewable derating. PJM’s ELCC ratings show that wind and solar only count at a fraction of nameplate capacity – onshore wind at ~21–38%, and solar at ~14–50% depending on year and configuration [67].

Meanwhile, PJM’s demand forecast added several gigawatts of new load, including data centers, EV manufacturing, and general growth [47]. But this increase was far smaller than the dependable supply removed by retirements, higher reserve requirements, and derating.

Bottom line: PJM faced a structural shortfall – several gigawatts of new demand versus well over ten gigawatts of effective supply lost on paper. That imbalance, not local projects, drove capacity prices higher across the region [49].

Why Illinois moved with everyone else

Illinois retained its nuclear fleet (Byron, Braidwood, and Dresden), which helps regional reliability. But because PJM sets capacity prices for the entire multi-state system, any shortfall anywhere raises costs everywhere:

  • PJM allocates reliability costs region-wide [51].
  • Higher auction prices flow through to all load-serving entities, including ComEd.

Illinois didn’t pay for other states’ mistakes – it paid for its share of regional reliability insurance.

What the headlines got wrong

Recent news stories often blamed data centers for rising bills. That narrative was catchy but inaccurate.

  • The cost increase was regional, not local.
  • The main drivers were retirements, higher reserve margins, and renewable derating.
  • Illinois does not subsidize big-tech hookups; ICC rules require large users to pay their own interconnection costs.
  • Homes and hospitals get priority during emergencies; large users curtail or self-supply first.
  • Capacity auctions can show sharp local price effects even when system-wide demand from data centers remains modest.

Oversimplified coverage distorted a complex, 13-state reliability issue into a single cause.

Regulatory and legislative responses – and the role of CUB

Illinois and federal agencies are responding to this reliability gap:

  • Clean and Reliable Grid Act (2025) repealed the state’s nuclear moratorium and authorizes advanced reactors [52].
  • Grid-scale storage incentives support battery deployment.
  • ComEd Multi-Year Plan (ICC 24-0181) funds grid modernization and replacement of aging infrastructure [53].
  • Federal actions include DOE loan programs and FERC Order 1920 on long-distance transmission [54].

This process has been contentious. CUB notes that the ICC ultimately cut 65% of ComEd’s proposed $1.47B increase after finding excessive capital spending [55]. That kept bills lower in the short term, but delaying upgrades also contributed to infrastructure strain across the region.

Local construction, consumer protection, and who pays for upgrades

Illinois law draws a firm line between:

  • Shared grid improvements (rate-funded), and
  • Customer-specific capacity additions (customer-funded).

Under PJM and ICC rules:

  • Large users pay 100% of their interconnection costs [56][58].
  • ComEd confirms that new large load must pay for its own tie-ins and load-specific upgrades [59].
  • Pending legislation (SB 2181 / HB 4120) would enhance usage reporting and strengthen ICC oversight [60].

Residential customers do not subsidize corporate hookups.

Who gets priority during grid stress

Emergency plans are unambiguous:

  • Homes, hospitals, and essential services are treated as firm load under NERC rules [61].
  • Many large industrial facilities – especially data centers – take interruptible or curtailable service and operate backup generation [62].
  • In practice, large users curtail first, preserving neighborhood reliability.

The idea that industry gets priority over residents is simply false.

Consumer impact – and how to read your bill

A typical household uses ~800–900 kWh per month with a bill in the low-$100s [63].

Delivery: 45–50% – ComEd infrastructure and maintenance (ICC-regulated) Supply: 40–45% – Energy + PJM capacity costs Taxes & Riders: 5–10% – State and municipal programs

2024–2026 cost drivers

Driver Monthly impact Notes PJM reliability / capacity +$8–12 Region-wide tightening [64] Delivery modernization +$5–6 ICC 24-0181 State policy riders +$1–2 Various programs Data-center load ~$0–$2 Modest system impact; localized auction effects in some zones [66]

PJM’s Market Monitor found that data center load affected the 2026/27 capacity auction in certain pockets [66], but that effect occurred on top of the region-wide shortfall created by retiring plants and increased reserve requirements.

The nuclear revival

Nuclear power remains the backbone of Illinois’ reliability. With the moratorium lifted, the state can now pursue both advanced large reactors and small modular reactors (SMRs) [52]. These plants:

  • Provide multi-day onsite fuel
  • Deliver stable operating costs
  • Offer high reliability value in PJM
  • Reduce dependence on natural gas
  • Fit well into Illinois’ existing transmission corridors

As the state maintains its existing fleet and explores new nuclear development, nuclear energy will be central to long-term cost stability and grid security.

Myths vs. facts

Myth: “Data centers caused bills to spike.” Fact: The major drivers were retirements, higher reserve margins, and renewable derating. Data centers influenced one auction year in some pockets but were not the primary region-wide cause [66].

Myth: “Industry gets power before homes.” Fact: Homes and hospitals are firm load; large users curtail and rely on generators during emergencies [61][62].

Myth: “Ratepayers fund corporate hookups.” Fact: ICC and PJM rules require large customers to fund their own interconnections [58][59].

Myth: “ComEd raises rates whenever it wants.” Fact: All delivery rates require ICC review and public comment.

Myth: “Renewables can replace all firm generation.” Fact: PJM’s ELCC shows wind and solar count only partially toward reliability, making firm resources essential [67].

Looking ahead

Illinois and PJM are rebuilding the dependable capacity that keeps the lights on. Grid modernization, advanced nuclear, and long-distance transmission planning should gradually ease costs over the late 2020s. Higher bills today reflect the cost of rebuilding reliability after years of under-investment – not the result of recent development. Data centers did not create the structural shortfall; in many cases, they help fund the solutions.

Methods & Transparency

I utilize a range of AI and automation tools, in conjunction with my own research, to organize and verify complex public data – from DeKalb County tax rolls and DevNet parcel records to PJM TEAC maps and ComEd reliability filings. ChatGPT has been the primary workhorse for synthesis, but I also utilize Copilot, Gemini, Claude, and Grok to cross-check facts, refine tone, and develop Python-based tools for analysis. Grammarly keeps the writing clear – I use it for nearly everything I write, even texts.

Over the past several months, I’ve invested well over 100 hours reviewing, verifying, and refining this information. I have also permanently archived more than 100 key source documents in the Internet Archive’s Wayback Machine to ensure transparency and durability. The work is still ongoing as new filings and community feedback come in.

Every figure and citation is sourced from public records that you can verify independently. My goal is to make complex infrastructure and taxation topics accessible and understandable to everyone in the community. I’m just a local guy with a day job and a family, trying to make the public data we already have a little easier for everyone to understand.

In This Series

[39] ComEd Multi-Year Rate Plan Order (Docket 24-0181), p. 13 – Delivery Service Rates under ICC Jurisdiction. https://web.archive.org/web/20251112/https://www.icc.illinois.gov/docket/P2024-0181

[40] PJM Manual 18 – Capacity Market Overview, §1.2 “Role of PJM,” p. 5. https://web.archive.org/web/20251112/https://www.pjm.com/library/manuals.aspx

[41] PJM Capacity Market Fact Sheet – “Promoting Future Reliability,” Base Residual Auction (BRA). https://web.archive.org/web/20251112/https://www.pjm.com/-/media/DotCom/about-pjm/newsroom/fact-sheets/pjm-capacity-market-promoting-future-reliability-fact-sheet.pdf

[42] FERC Order No. 719 – Wholesale Market Design and Reliability Principles, p. 6 ¶12. https://web.archive.org/web/20251112/https://www.ferc.gov/sites/default/files/2020-05/E-16_19.pdf

[43] State of the Market Report for PJM 2023, Volume 1, p. 15, Figure 3. https://web.archive.org/web/20251112/https://www.monitoringanalytics.com/reports/PJM_State_of_the_Market/2023.shtml

[44] PJM Generation Deactivation Fact Sheet, Table: Deactivations 2023–2027. https://web.archive.org/web/20251112/https://www.pjm.com/-/media/DotCom/about-pjm/newsroom/fact-sheets/generation-deactivation-fact-sheet.pdf

[45] 2026/2027 PJM BRA Planning Period Parameters, p. 2 (IRM ~19%). https://web.archive.org/web/20251015/https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2026-2027/2026-2027-planning-period-parameters-for-base-residual-auction-pdf.pdf

[46] NERC Long-Term Reliability Assessment (LTRA), 2024, p. 26 – ELCC by Resource Class. https://web.archive.org/web/20251112/https://www.nerc.com/pa/RAPA/ra/Pages/default.aspx

[47] PJM 2024 Load Forecast Report, p. 8 – Non-Coincident Peak Load Growth. https://web.archive.org/web/20251112/https://www.pjm.com/-/media/DotCom/library/reports-notices/load-forecast/2024-load-report.pdf

[48] 2026–2027 Base Residual Auction Report, p. 4 – Supply vs. Demand Balance. https://web.archive.org/web/20251112/https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2026-2027/2026-2027-bra-report.pdf

[49] Utility Dive – “PJM Auction Clears at Record Price Amid Reliability Concerns,” May 15, 2024. https://web.archive.org/web/20251112/https://www.utilitydive.com/news/pjm-capacity-auction-2026-2027/716812/

[50] (Removed – unused in final text)

[51] PJM Manual 28 – Billing, Settlements, and Credit Requirements, §2.3 “Locational Cost Allocation,” p. 12. https://web.archive.org/web/20251112/https://www.pjm.com/-/media/documents/manuals/m28.ashx

[52] Public Act 103-0721 – SB 3104 (Clean and Reliable Grid Act), Sec. 5 – Repeal of Nuclear Moratorium. https://web.archive.org/web/20251112/https://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=103-0721

[53] ICC Docket 24-0181 – ComEd Multi-Year Rate Plan (2024–2027), Order pp. 142–143. https://web.archive.org/web/20251112/https://www.icc.illinois.gov/docket/P2024-0181

[54] FERC Order No. 1920 – Transmission Planning and Cost Allocation, Appendix A. https://web.archive.org/web/20250920/https://www.ferc.gov/media/e-1

[55] Citizens Utility Board – “Update on Cases Involving ComEd and Ameren Illinois,” June 28, 2024. https://web.archive.org/web/20240628170000/https://www.citizensutilityboard.org/blog/2024/06/28/update-on-cases-involving-comed-ameren-illinois-power-bills/

[56] PJM Manual 14A – Generator & Transmission Interconnection Process, §10.2 “Cost Responsibility,” p. 46. https://web.archive.org/web/20251112/https://www.pjm.com/-/media/documents/manuals/m14a.ashx

[57] 83 Ill. Adm. Code Part 466 – Electric Utility Interconnection Standards, § (b)(3). https://web.archive.org/web/20251112/https://www.ilga.gov/commission/jcar/admincode/083/08300466sections.html

[58] ICC Staff Brief on Exceptions, Docket 24-0181 (Cons. 22-0486 / 23-0055), p. 56 ¶3. https://web.archive.org/web/20251112/https://www.icc.illinois.gov/docket/P2024-0181/documents/352943/files/617754.pdf

[59] ComEd Filing #620670 – Kormos Testimony, Docket 24-0181 (July 2024), p. 9. https://web.archive.org/web/20251112203536/https://www.icc.illinois.gov/docket/P2024-0181/documents/354434/files/620670.pdf

[60] SB 2181 (2025) – Data Center Energy & Water Reporting; HB 4120 – Utilities-Various. https://web.archive.org/web/20251112/https://www.ilga.gov/legislation/BillStatus.asp?DocNum=2181&GAID=18&DocTypeID=SB&SessionID=114&LegID=161884

[61] NERC Standard EOP-011-2 – Emergency Operations, R1.1. https://web.archive.org/web/20251112/https://www.nerc.com/_layouts/15/PrintStandard.aspx?standardnumber=EOP-011-2

[62] ComEd Current Rate Book – Interruptible Service (IS) & Load Response (LR), Sheet 271. https://web.archive.org/web/20251112/https://www.comed.com/SiteCollectionDocuments/MyAccount/MyBillUsage/CurrentRateBook.pdf

[63] EIA FAQ – Average Monthly Electric Consumption per U.S. Household. https://web.archive.org/web/20251112/https://www.eia.gov/tools/faqs/faq.php?id=97&t=3

[64] 2026/2027 PJM Planning Period Parameters, p. 2 (IRM). https://web.archive.org/web/20251015/https://www.pjm.com/-/media/DotCom/markets-ops/rpm/rpm-auction-info/2026-2027/2026-2027-planning-period-parameters-for-base-residual-auction-pdf.pdf

[65] PJM 2025 Long-Term Load Forecast Report, pp. 12–14 (ComEd Zone & data center adjustments). https://web.archive.org/web/20251112/https://www.pjm.com/-/media/DotCom/library/reports-notices/load-forecast/2025-load-report.pdf

[66] Monitoring Analytics – “Analysis of the 2026/2027 RPM Base Residual Auction (Part A),” Oct. 1, 2025. https://web.archive.org/web/20251112/https://www.monitoringanalytics.com/reports/Reports/2025/IMM_Analysis_of_the_20262027_RPM_Base_Residual_Auction_Part_A_20251001.pdf

[67] PJM ELCC Class Ratings for 2024/2025 and 2025/2026. https://web.archive.org/web/20250930094019/https://www.pjm.com/-/media/DotCom/planning/res-adeq/elcc/elcc-class-ratings-for-2024-2025.ashx

In This Series

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