Deep Freeze Causes Power Expenses to Surge Over Twofold on Largest US Grid

US Power Grid Sees Dramatic Surge in Electricity Costs Amid Winter Freeze

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In January, electricity prices on the nation’s largest power grid soared to more than twice their previous levels as a severe cold snap swept across the US, driving up heating needs and prompting grid operators to bolster energy supplies to prevent outages.

According to Joe Bowring, president of Monitoring Analytics LLC, the independent market monitor for PJM Interconnection LLC, total wholesale electricity expenses on the PJM grid—which delivers power to roughly 20% of Americans—reached $15.38 billion in January. This marks a significant increase from $7.34 billion during the same month in 2025.

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Early figures highlight the potential for higher utility bills for consumers, as the affordability of electricity has become a central topic in political debates, especially after influencing several gubernatorial elections last year. The spike in power prices coincided with a sharp rise in natural gas costs, which hit multi-year highs along the East Coast and set new records in some regions as the cold weather gripped much of the country.

PJM, which already hosts the largest cluster of data centers in the US, is experiencing even faster growth in electricity demand as utilities expand capacity to support artificial intelligence, putting additional pressure on the grid.

Despite the extreme cold, the power grid’s resilience was a “pleasant surprise,” according to Judy Chang of the Federal Energy Regulatory Commission, who spoke at the National Association of Regulatory Utility Commissioners’ winter summit in Washington. She noted, “We’re not out of the woods yet, but I’m hopeful we’ll get through the coming week. It’s a challenging situation.”

Energy supply was the main contributor to the cost increase, with energy expenses alone reaching $12.47 billion in January—up from $5.67 billion a year earlier, as reported by the independent market monitor. Additional costs for emergency measures, such as activating seldom-used generators and covering fuel expenses (known as uplift charges), also more than doubled to $849 million.

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