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The temperature rose to 80 degrees Fahrenheit in Washington, D.C. today. That is weird because it’s currently January 26, and because about four inches of snow fell last week. (Literally, D.C. public schools had a snow day a week ago.) Now the snow has melted and people are walking around in shorts and t-shirts.
While it can be hard to attribute individual weather events to climate change, “freakishly warm winter days” are an exception. Washington’s winters have gotten significantly warmer lately because of climate change. Across the country, climate change is making winters warmer and less snowy.
As a Washingtonian, I’ll add that these warmer days are especially odd because the sun is still at a slanty January angle. At 2 p.m. the sun was less than 30 degrees above the horizon; that’s the same height it would be at, say, 5 or 6 p.m. in June or July. So it looks and feels like a cool summer evening here — but it’s actually a bright winter early afternoon. Global weirding is right.
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PJM’s market monitor got spicy in its latest annual report.
The independent market monitor of PJM Interconnection, America’s largest electricity market spanning some or all of 13 states from the Jersey Shore to Chicago, took advantage of its latest annual report to share eye-popping figures on how data centers raise electricity costs and lambast existing proposals to fix it.
“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,” the independent market monitor said in the report, released Thursday. Some PJM states like New Jersey and Maryland have seen some of the fastest retail electricity price hikes in the country, in part due to spiraling costs stemming from capacity auctions, in which generators bid to be available when the grid is stressed. Capacity prices have risen from $29 per megawatt-day to the statutory cap of around $330 in just a few years, costing ratepayers some $46.7 billion over the past three auctions. The total from the three prior auctions: $8.3 billion.
The independent market monitor has used its regular reports and ad hoc commentary to blame data centers for the price boom over the past few years, and its 2025 annual report was no different. “Inclusion of existing and forecast data center load growth resulted in a combined total increase in capacity market revenues” of just over $23 billion, the market monitor wrote of the past three auctions. “Large data center load additions have already had a significant and irreversible impact that will be paid through May of 2028 and will have additional significant impacts on other customers as a result of higher transmission costs, higher energy market prices and higher capacity market prices,” the report said.
The assessment comes at a moment of turmoil for PJM, which has endured pressure from energy regulators and the White House to reform itself in order to bring on more generation more quickly. Some other proposed solutions to PJM’s price woes include coming up with new rules that encourage data centers to bring their own electricity generation, co-locate with existing or planned generation, or to operate more flexibly to avoid calling on the grid at peak demand times. The White House and PJM states even called for a special auction in the system to procure $15 billion of new generation, with a proposal for how the auction would actually run expected in April, according to Julien Dumoulin-Smith, an analyst at Jefferies.
The market monitor used the report to promote its own position: That data centers should bring their own generation, and that they should have their own “expedited fast track load and generation interconnection process.” Data centers that don’t bring their own generation should then have to put up with mandatory supply curtailment by the grid in moments of peak demand.
The market monitor argued that this proposal was consistent with the White House and PJM governors’ agreed-upon principles, as well as the “ratepayer protection pledge” drawn up by the Trump administration and signed onto by most of the country’s big players in artificial intelligence to protect utility customers for higher costs stemming for data center development.
In language more stirring than is typical for a report on market operations for a regional transmission organization, the market monitor called for preserving the market-like structure of PJM and the principle that all customers be served on the grid.
“All loads should be served,” the report said. “All loads should be served reliably. The process for adding large data center loads should be transparent. All loads should benefit from competitive markets.”
“It is difficult to imagine more arbitrary and capricious decisionmaking than that at issue here.”
A federal court shot down President Trump’s attempt to kill New York City’s congestion pricing program on Tuesday, allowing the city’s $9 toll on cars entering downtown Manhattan during peak hours to remain in effect.
Judge Lewis Liman of the U.S. District Court for the Southern District of New York ruled that the Trump administration’s termination of the program was illegal, writing, “It is difficult to imagine more arbitrary and capricious decisionmaking than that at issue here.”
So concludes a fight that began almost exactly one year ago, just after Trump returned to the White House. On February 19, 2025, the newly minted Transportation Secretary Sean Duffy sent a letter to Kathy Hochul, the governor of New York, rescinding the federal government’s approval of the congestion pricing fee. President Trump had expressed concerns about the program, Duffy said, leading his department to review its agreement with the state and determine that the program did not adhere to the federal statute under which it was approved.
Duffy argued that the city was not allowed to cordon off part of the city and not provide any toll-free options for drivers to enter it. He also asserted that the program had to be designed solely to relieve congestion — and that New York’s explicit secondary goal of raising money to improve public transit was a violation.
Trump, meanwhile, likened himself to a monarch who had risen to power just in time to rescue New Yorkers from tyranny. That same day, the White House posted an image to social media of Trump standing in front of the New York City skyline donning a gold crown, with the caption, "CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED. LONG LIVE THE KING!"
New York had only just launched the tolling program a month earlier after nearly 20 years of deliberation — or, as reporter and Hell Gate cofounder Christopher Robbins put it in his account of those years for Heatmap, “procrastination.” The program was supposed to go into effect months earlier before, at the last minute, Hochul tried to delay the program indefinitely, claiming it was too much of a burden on New Yorkers’ wallets. She ultimately allowed congestion pricing to proceed with the fee reduced from $15 during peak hours to $9, and thereafter became one of its champions. The state immediately challenged Duffy’s termination order in court and defied the agency’s instruction to shut down the program, keeping the toll in place for the entirety of the court case.
In May, Judge Liman issued a preliminary injunction prohibiting the DOT from terminating the agreement, noting that New York was likely to succeed in demonstrating that Duffy had exceeded his authority in rescinding it.
After the first full year the program was operating, the state reported 27 million fewer vehicles entering lower Manhattan and a 7% boost to transit ridership. Bus speeds were also up, traffic noise complaints were down, and the program raised $550 million in net revenue.
The final court order issued Tuesday rejected Duffy’s initial arguments for terminating the program, as well as additional justifications he supplied later in the case.
“We disagree with the court’s ruling,” a spokesperson for the Transportation Department told me, adding that congestion pricing imposes a “massive tax on every New Yorker” and has “made federally funded roads inaccessible to commuters without providing a toll-free alternative.” The Department is “reviewing all legal options — including an appeal — with the Justice Department,” they said.
Clean energy stocks were up after the court ruled that the president lacked legal authority to impose the trade barriers.
The Supreme Court struck down several of Donald Trump’s tariffs — the “fentanyl” tariffs on Canada, Mexico, and China and the worldwide “reciprocal” tariffs ostensibly designed to cure the trade deficit — on Friday morning, ruling that they are illegal under the International Emergency Economic Powers Act.
The actual details of refunding tariffs will have to be addressed by lower courts. Meanwhile, the White House has previewed plans to quickly reimpose tariffs under other, better-established authorities.
The tariffs have weighed heavily on clean energy manufacturers, with several companies’ share prices falling dramatically in the wake of the initial announcements in April and tariff discussion dominating subsequent earnings calls. Now there’s been a sigh of relief, although many analysts expected the Court to be extremely skeptical of the Trump administration’s legal arguments for the tariffs.
The iShares Global Clean Energy ETF was up almost 1%, and shares in the solar manufacturer First Solar and the inverter company Enphase were up over 5% and 3%, respectively.
First Solar initially seemed like a winner of the trade barriers, however the company said during its first quarter earnings call last year that the high tariff rate and uncertainty about future policy negatively affected investments it had made in Asia for the U.S. market. Enphase, the inverter and battery company, reported that its gross margins included five percentage points of negative impact from reciprocal tariffs.
Trump unveiled the reciprocal tariffs on April 2, a.k.a. “liberation day,” and they have dominated decisionmaking and investor sentiment for clean energy companies. Despite extensive efforts to build an American supply chain, many U.S. clean energy companies — especially if they deal with batteries or solar — are still often dependent on imports, especially from Asia and specifically China.
In an April earnings call, Tesla’s chief financial officer said that the impact of tariffs on the company’s energy business would be “outsized.” The turbine manufacturer GE Vernova predicted hundreds of millions of dollars of new costs.
Companies scrambled and accelerated their efforts to source products and supplies from the United States, or at least anywhere other than China.
Even though the tariffs were quickly dialed back following a brutal market reaction, costs that were still being felt through the end of last year. Tesla said during its January earnings call that it expected margins to shrink in its energy business due to “policy uncertainty” and the “cost of tariffs.”