Largest US Power Grid Faces Blackout Risk as Winter Demand Hits Record Highs

2026-01-29 economy

Audubon, Wednesday, 28 January 2026.
Wholesale electricity prices spiked above $3,000 per megawatt-hour as the largest US grid braces for record winter demand, forcing rare emergency measures to secure power for 67 million people.

Unprecedented Strain on the Grid

PJM Interconnection, the entity responsible for managing the power supply for 67 million people across 13 states and the District of Columbia, is currently navigating a precarious operational landscape [1][5]. As of the morning of Wednesday, January 28, 2026, the average spot electricity price within the PJM network hovered around $730 per megawatt-hour (MWh), with prices in the Dominion Energy zone skyrocketing to over $1,600 per MWh [1]. These elevated costs reflect severe transmission line congestion and a looming capacity shortfall, as the grid operator forecasts an all-time winter record demand of 148 gigawatts for Friday, January 30, 2026 [1]. This projection surpasses the previous winter record of 143.7 gigawatts set in January 2025 [7].

Fossil Fuel Failures and Supply Chain Constraints

A primary driver of this grid stress is the significant underperformance of fossil fuel generation amid freezing conditions. On January 26, 2026, PJM reported that nearly 21 gigawatts of generation capacity were offline, representing approximately 16% of the grid’s afternoon demand [6]. This failure was largely attributed to constrained natural gas supplies and mechanical freezing at power plants [6]. Data indicates a sharp decline in gas-fired generation, which fell from a peak of 60 gigawatts on January 24 to 50 gigawatts on January 25 [6]. Furthermore, gas output in the Lower 48 states dropped -3.282 percent in January 2026, falling to an average of 106.1 billion cubic feet per day (bcfd) from a record high of 109.7 bcfd in December 2025 [1].

Strategic Responses and Market Adjustments

Beyond immediate emergency measures, structural vulnerabilities in the grid are prompting long-term policy shifts. On Wednesday, January 28, PJM initiated discussions regarding the creation of a backstop auction, a procurement mechanism designed to secure reliable supply amid rapidly growing demand [2]. This move aligns with pressure from the White House earlier this month, which urged the grid operator to conduct emergency auctions to prevent blackouts as energy consumption from data centers—particularly in Virginia—outpaces the construction of new generation facilities [2].

Sources

Energy Infrastructure Grid Reliability