The Substation

In the first seven months of 2026, data centers accounted for about 9% of the wholesale cost of power across PJM, the grid that serves 65 million people from Chicago to Washington. That's $10.48 of a $116.53 per megawatt-hour average, and the average itself was up 46% on the year.⁶ The same market monitor attributes $29.4 billion of the last four capacity auctions, 46% of the total, to existing and forecast data center load.⁵ Those two numbers are the cleanest measurement anyone has produced of what the AI buildout costs a grid, and they come from the grid's own referee.

The first two analyses on this site were about capital: who's spending it and whose name is on it. This one is about the thing capital can't buy on a schedule. A gigawatt of compute needs a gigawatt of firm supply, a substation to land it, and a turbine or a reactor behind it, and each of those has a queue. Read the buildout through the queues and it looks different from the way it looks through the capex.

The contracts

Start with what's been signed. The hyperscalers have contracted about 4.5 gigawatts of nuclear capacity in five deals, three of them restarts or relicensings of reactors that were closed or about to close.¹ None of the prices are public. Analysts put the Microsoft and Meta contracts somewhere between $70 and $115 per megawatt-hour, which is a premium of roughly $20 to $40 over the local wholesale price, and Constellation has since guided $80 to $88 for future front-of-meter deals.¹⁵

Two things about the nuclear deals matter more than their size. The first is timing. The earliest of them delivers in the second half of 2027 and the largest doesn't reach full quantity until 2032, so none of this power serves the capacity being built with this year's $800 billion.¹² The second is the regulator. Amazon's original plan was to take Susquehanna's output behind the meter, off the grid entirely. FERC rejected the expansion in November 2024, opened a proceeding on co-location in February 2025, and in December ordered PJM to write rules for it. The deal that survived is a conventional front-of-meter contract, which means the load shows up in everyone's grid.²¹⁶

The near-term capacity is gas, and much of it is being built on site to avoid the queue. Crusoe secured 4.5 gigawatts of gas-fired supply for the Abilene campus where Oracle serves OpenAI. Oracle's second Texas site runs on a 700 megawatt microgrid of 210 gas gensets. xAI's Memphis and Southaven campuses run on dozens of mobile turbines, and the second site is the subject of a Clean Air Act suit over 27 unpermitted units, in which the Justice Department intervened on xAI's side citing national security.⁷⁸ Cleanview counts about 90 gigawatts of behind-the-meter generation announced for data centers by mid-2026, 92% of it since January 2025. About 1.1 gigawatts, or 1.2%, was under construction.³⁰

The queue

The interconnection queue is where announced and real get sorted, and the Texas one has become the clearest instrument in the country. Large-load requests in ERCOT stood at about 233 gigawatts at the end of 2025, up roughly 300% in a year, with more than 70% from data centers.¹⁰ By March the chief executive told the state senate it was 410 gigawatts, 87% data centers.¹¹ By August it was about 474 gigawatts, over five times the system's record peak demand, and the governor ordered every project audited before any could advance.¹²

Texas has responded the way a market does when a queue stops meaning anything: it started charging to be in it. The utility commission now requires $50,000 per megawatt of financial security to hold a place, most of it non-refundable, and from this year only loads with signed interconnection agreements count in the forecast.¹¹ Senate Bill 6, signed in June 2025, lets the grid operator curtail any new large load during a shortage.¹³ Britain's regulator proposed the same thing in July: commitment fees of £237,500 to £712,500 per megawatt for data centers that want to keep a grid slot, after the connection queue reached 738 gigawatts against 200 to 225 needed.³²³³

PJM has no queue fee; it has a price. Its capacity auction cleared at $329.17 per megawatt-day for 2026/27, the regulatory cap and up 22% on the year, and at $333.44 for 2027/28, the cap again, with the market 6.6 gigawatts short of its reliability requirement.³⁴ PJM's own forecast attributes 30 of the 32 gigawatts of peak growth it expects by 2030 to data centers, and its ten-year growth rate has gone from 0.3% a year in the 2021 forecast to 3.6% in this year's.¹⁴¹⁵ An uncapped auction, by PJM's own simulation, would have cleared near $389.³

Who pays

A study published in May by North Carolina State, Carnegie Mellon, Pittsburgh, and Toronto projects retail electricity prices rising 6% to 29% nationally by 2030 because of data center load, and up to 57% in the most exposed regions, which are exactly the ones on the ledger: Virginia, Pennsylvania, Ohio, west Texas.²⁰ The industry's own consultant, E3, working for the Data Center Coalition, attributes about half of the PJM capacity price increase between the 2024/25 and 2025/26 auctions to load growth and the other half to market design and retirements, and finds no evidence of historical cross-subsidy.²¹ Both can be true. The question regulators are actually deciding isn't whether data centers raised prices in the past. It's who carries the fixed cost of the plants being built for them now.

Notice the shape these rules share. They don't cap data center demand. They convert it into a take-or-pay contract: a minimum bill, a long term, collateral, an exit fee. That's the structure of a project-finance offtake agreement, and it's being written into utility tariffs because regulators have concluded the announced load can't be trusted at face value. Dominion has 51 gigawatts of data center capacity under contract, Southern has 10 gigawatts fully contracted against a 75 gigawatt pipeline, and AEP raised its five-year capital plan to $78 billion on the strength of signed load.²²²³²⁴ Every one of those numbers is now backed by a minimum-bill tariff, which is the difference between a forecast and a receivable.

The turbine

Behind every queue is a physical order book, and it's the most concrete forward indicator the buildout has. GE Vernova ended the second quarter with 116 gigawatts of gas turbine backlog and reservations, up from 100 in the first quarter, and is now taking reservations for 2031 delivery. Its production target is 20 gigawatts a year this quarter, rising to 30 by 2030.²⁵ Siemens Energy holds 69 gigawatts with lead times over three years. Mitsubishi Power holds 35, up from 23 a year earlier, and is sold out through 2028.²⁶²⁷

Prices followed. BloombergNEF puts the average combined-cycle project at $2,157 per kilowatt in 2025 against under $1,500 in 2023, and Wood Mackenzie expects the turbine alone to reach about $600 per kilowatt by the end of 2027, nearly triple 2019.²⁵ Transformers are worse: 128 weeks average for a power transformer, 144 for a generator step-up unit, up to four years for the largest.²⁸ Global Energy Monitor counts 189 gigawatts of US gas capacity in development tied to data centers as of mid-2026, nearly double the figure six months earlier, with 77 of it in Texas.²⁹ Bloomberg's analysis of 99 proposed behind-the-meter plants puts their emissions at about 318 million tonnes a year if run at industry-standard rates, a fifth of the entire US power sector's 2025 output.³¹

Put the three sections together and the buildout has a clock that the capex figures don't show. The nuclear deals deliver from late 2027. Turbine slots ordered today deliver in 2029 to 2031. Transformers take two to four years. Queues in Texas and Britain are being audited and priced because most of what's in them won't be built. Whatever the five companies' 2026 spending buys, the power to run it at scale is a 2028 to 2032 event, and the contracts say so in writing.

So when the next data center announcement arrives, the number to find isn't the dollars or the gigawatts of compute. It's three other things. Whether the power is behind the meter or grid-served, because that decides which regulator and which lawsuit. Whether there's a signed interconnection agreement and a tariff with a minimum bill, because that's what separates a receivable from a press release. And the delivery year on the turbine or reactor, because that's the date the project actually starts.

@misc{wisniewski2026the,
  author = {Wisniewski, Kyle},
  title  = {The Substation},
  year   = {2026},
  month  = {sep},
  url    = {https://www.kylewisniewski.com/institutional-ai/analysis/the-substation}
}