Key Takeaways
A 76% surge in wholesale electricity prices across the largest U.S. grid is being directly linked to soaring power demand from AI data centers, positioning nuclear energy as a critical asset for technology giants.
"Data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply-and-demand balance, and high prices," Monitoring Analytics said in its latest report on the PJM Interconnection.
Average power prices in the PJM grid, which serves 67 million people across 13 states, hit $136.53 per megawatt-hour in the first quarter of 2026, a nearly 76% increase from the prior year. The report warned the current supply is "not adequate" to meet demand from the wave of new data centers and that the impact on customers could last through May 2028.
This power bottleneck is creating a new class of strategic assets, with companies like Vistra (NYSE:VST) securing multi-decade contracts for nuclear and other dispatchable power with Meta Platforms and Amazon Web Services. These deals are designed to provide consistent, reliable electricity to hyperscale data centers, locking in long-term revenue visibility for power producers.
For investors monitoring the AI infrastructure buildout, Vistra now sits at the center of power generation and data center growth. The new agreements link its generation portfolio directly to the rising electricity needs of major AI operators. According to analysis from Simply Wall St, Vistra's shares are trading more than 50% below their estimated fair value, though the firm also flags high debt as a key risk to consider as it commits to long-duration supply deals.
The contracts give investors better visibility into how AI-related demand will translate into contracted volumes for Vistra. While financial terms were not disclosed, the alignment with hyperscale customers firmly places the company within the AI data center theme.
The rapid expansion is not without controversy. In Utah, state lawmakers have launched a study into the environmental impact of data centers on wildlife and scarce water resources. The move follows a proposal for a large data center in Box Elder County that raised alarms among environmental groups and local residents.
Data centers require vast amounts of water for cooling, a significant concern in arid Western states already facing drought conditions. The high electricity demand also raises questions about sustainability and the sources of energy generation. These growing pains highlight the tension between technological advancement and environmental stewardship, which is becoming a key factor for developers and investors in the sector.
This article is for informational purposes only and does not constitute investment advice.
