The Media’s Energy Crisis Is Costing Customers Billions

When PJM’s latest capacity auction cleared at the price cap, much of the coverage followed a familiar script.

The media is creating the illusion of an energy crisis

The region is running out of power. Demand is surging. Data centers are overwhelming the grid. Customers must pay more to preserve reliability.

That conclusion arrived quickly. The scrutiny did not.

Too much energy coverage now starts with the conclusion and works backward. Once the crisis frame is established, every fact is made to fit it. A high price becomes proof of scarcity. A forecast becomes proof of demand. A regulatory filing becomes proof of need. A warning from a grid operator or utility becomes the story rather than the beginning of the reporting.

Contradictory evidence is treated as a complication.

That is not a harmless media habit. It is becoming extraordinarily expensive. Electricity markets are complicated, but the questions reporters should ask are not.

Who checked the assumptions? Who benefits from the proposed solution? Who pays if the forecast is wrong?

Energy narratives move quickly from headlines into regulatory proceedings, infrastructure plans and customer bills.

Manufacturers make long-term investment decisions based on energy costs, reliability and regulatory certainty. When questionable assumptions are repeated often enough to become conventional wisdom, they are easier to convert into billions of dollars in new spending.

Manufacturers then receive the bill.

An instructive – and execrable – example

Consider what happened with two proposed data center projects in AES Ohio’s service territory. The initial transmission projects were estimated to cost $837.5 million, with roughly $2.77 billion in guaranteed revenue requirements over 40 years. Yet the data centers’ proposed payment commitments would cover only about $1.4 billion, potentially leaving other customers exposed to more than $1.3 billion in costs.

The Ohio Manufacturers’ Association sent those findings to roughly 300 reporters, including more than a dozen in the Dayton market. Only one seriously examined the potential cost shift. That reporting showed what scrutiny can accomplish. It also showed how easily a billion-dollar customer risk can remain buried beneath the rush to accommodate growth.

Utilities understand the power of that narrative. A forecast of extraordinary growth can become the justification for extraordinary spending. Once the need is accepted in the press and political debate, the argument before regulators often shifts from whether the investment is necessary to how quickly customers should begin paying for it.

The PJM auction and what actually went wrong

Consider PJM’s capacity market.

The latest auction hit the price cap and directed roughly $16 billion to power suppliers. The standard explanation is that the region faces a severe capacity shortage. But the shortage is not simply a count of how much physical generation exists.

PJM has increased the amount of capacity it says the region must procure. It reduces the credited value of existing power plants. It includes rapidly rising forecasts for future electricity demand, much of it tied to data centers. At the same time, new generation remains delayed in the interconnection process.

Those choices create a mathematical gap. That gap is then presented to the public as evidence that the region is physically running out of electricity. The distinction is critical.

A shortage created by models, market rules and administrative decisions can still produce a real charge on a customer’s bill. It can raise the cost of operating a steel mill, glass plant or chemical facility, delay an expansion and make American products less competitive.

The truth about data centers and their energy needs

The reporting around data centers suffers from the same weakness. The debate is often reduced to two camps. Data centers are either an economic miracle to be accommodated at any cost or an environmental disaster to be stopped. Neither frame is useful.

Data centers can bring enormous investment. They can also require enormous amounts of electricity and infrastructure.

The real questions are more practical. How much of the projected load is backed by enforceable commitments? Who pays for the systems built to serve it? What happens if projects are delayed, downsized or abandoned? Are existing customers protected from costs incurred for demand that never materializes?

These are not anti-growth questions. They are the questions any reporter should ask before repeating claims that billions of dollars in new investment are urgently required.

Utilities should not be allowed to treat every development proposal or optimistic load projection as guaranteed future demand and then transfer the risk of being wrong to everyone already connected to the system.

When infrastructure is proposed for a specific large user, reporters should ask how much that user must pay, how long its commitment lasts and who is left holding the costs if the project never arrives as advertised.

Too often, projected demand is treated as inevitable while the financial risk to existing customers is buried in regulatory testimony or omitted entirely.

Financial incentives

That omission matters because utilities have a clear financial incentive in the debate.

Large capital projects can expand a utility’s regulated asset base and generate customer payments for decades. That does not make every proposed project unnecessary. It makes rigorous scrutiny essential.

When a utility declares that billions of dollars in infrastructure are urgently needed, the claim should be tested, not amplified.

Reporters should ask whether the utility earns a return on the investment, what alternatives were considered, whether the projected demand was independently reviewed and who absorbs the cost if the assumptions collapse.

Instead, coverage too often begins with the utility’s premise and treats the spending plan as the unavoidable response.

That reverses the proper order of scrutiny. The media’s job is not to accept the framing offered by the most powerful institution in the story.

Grid operators want greater authority. Utilities want approval for infrastructure. Developers want access to power. Regulators want to show they are protecting reliability. Every one of those parties has an interest.

Reporters should treat their claims accordingly.

That does not mean assuming bad faith. It means refusing to confuse an interested party’s assertion with an independently established fact.

Energy reporting should be especially skeptical because the stakes are high and the systems are opaque. Customers depend on reporters to interrogate the institutions making these decisions.

When that scrutiny is absent, the most dramatic narrative usually wins.

What’s wrong with energy reporting

Point to a crisis. Demand new authority. Approve more spending. Shift the risk onto customers. Call it protection.

That pattern has become far too common.

The country does not need another energy panic built on assumptions, rewarded with spending and handed to customers as a bill. It needs proof before payment, scrutiny before approval and consequences when powerful institutions get the forecast wrong.

Reliability matters. But it cannot become a blank check, and crisis language cannot substitute for evidence.

Before accepting that customers must pay billions more, reporters should ask whether the emergency exists outside the forecast model, who profits from the proposed solution and who checked the math.

And when the evidence does not support the conclusion, they should be willing to change the story.

This article was originally published by RealClearEnergy and made available via RealClearWire.