Key Points:
Cap Masks a 60% Gap: PJM's 2028/2029 auction cleared at the $325/MW-day legal ceiling, roughly 60% below the approx. $530/MW-day the market would have set without the cap.
Special Report: The energy story near the Grand Canyon (from Behind The Market)
Widening Deficit: If the reliability gap continues to trend wider (6,831 MW short this year versus a smaller shortfall last year), the next auction should clear at the cap again with even greater suppressed pricing.
Smart Money Confirmation: Independent power producers Vistra, Constellation, and Talen rallied on the July 15 tape as institutional buyers positioned into structural power scarcity; the last two auctions have added about $16 billion in costs passed to ratepayers.
Tuesday afternoon, a grid operator most people have never heard of made an announcement. It keeps the lights on for 67 million Americans. Thirteen states. From Illinois to New Jersey. And it just told the country the truth. There isn't enough electricity.
The operator is called PJM. Every year it runs an auction. Power plants bid. They promise to show up three years from now and deliver juice when the grid needs it. Tuesday's auction was for the summer of 2028 into 2029.
The price hit a wall. A legal cap. $325 per megawatt-day. Without the cap, the real price would have been about 60% higher. Something like $530.
Elon Musk: "Do you Like Minting Money?"
Elon Musk called lithium refining a “license to print money.”
He is right. Here is why.
Global lithium demand is set to grow 5X by 2040. Every EV battery needs up to 60 kilograms of it. AI data centers runs on it. And the old supply chain cannot keep up.
That is why General Motors led a $50 million round into a private company called EnergyX.
What GM saw was simple. The old way of mining lithium takes 18 months and leaves most of the metal in the dirt. EnergyX built a patented system that pulls out 3X more, and it does it in days.
That’s why GM wrote the check.
And now you can invest alongside with them, until July 16.
I can't stop thinking about that. The cap is hiding how bad the shortage really is. It's a lid on a boiling pot. The heat doesn't go away. It just doesn't show on the dial.
Here's what worries me. PJM came up 6,831 megawatts short of what it needs. That gap is bigger than last year. The problem isn't getting fixed. It's getting worse.
The PJM CEO said it plain. Demand is growing faster than supply. He didn't dress it up. He didn't hedge. That's a rare thing for a CEO to say out loud in public.
I don't think most people realize where the new demand is coming from. It's the AI boom. The hyperscale data centers. Google. Amazon. Microsoft. Meta. Every one of them is racing to build more. The market monitor at PJM says so. PJM itself says so. One big data center can eat as much power as a small city.
Now think about what you own. Nvidia. Microsoft. Amazon. Meta. Half the stock market runs through those names now. Your S&P 500 fund. Your 401(k). The account you set up for the grandkids. All of it. Those companies live or die by the data center rollout. And PJM just told the world the power for those data centers isn't guaranteed.
I get it. This sounds like a slow story. Boring. Grids and megawatts. But look at what Wall Street did the same afternoon. It bid up the independent power producers. Vistra. Constellation. Talen. Their stocks jumped hard. The pros were buying while the retail crowd was still asleep.
Wall Street knows something. These prices only go one direction. Up. The smart money is buying the shovel makers, not the miners.
The Key to This $560B Market Is in Your Bloodstream
Every year, $560B is spent on osteoarthritis. But not a single therapy has been able to actually stop it. It turns out the answer has been inside us all along.
A startup named Cytonics discovered the human body already produces a protein designed to protect cartilage. It just doesn’t produce enough where it's needed most. So Cytonics harnessed it.
Their first-generation therapy has already treated 10,000+ patients. Now they've engineered a 200% more potent, mass-producible version pushing toward FDA approval.
If approved, it could be the first therapy to actually halt cartilage destruction and promote regrowth in a market that has never had a real solution. Invest in Cytonics before the opportunity ends later this month.
Meanwhile, back home, your electric bill goes up either way. The last two PJM auctions have added about $16 billion in reliability costs. Guess who pays that. Ratepayers. That's you. Some Pennsylvania utilities have already raised residential supply rates up to 20% this year.
Twenty percent. On the electric bill. In one year. Not over a decade. In one year.
Nobody knows how this plays out from here. If the AI companies can't get the power, the buildout slows down. Your Nvidia shares wobble. Your Microsoft shares wobble. If they do get the power, your bill keeps climbing. There isn't a clean version of this story.
Building a new power plant takes five years. Sometimes seven. Sometimes ten. A data center takes maybe eighteen months. You can see the math. Those two lines don't meet.
Here's the part that got me. The auction cleared right at the cap. That's the market saying it wants to charge more but the law won't let it. The pressure doesn't disappear. It builds. Next year it builds more. And the cap only holds for so long before Washington has to lift it or the grid breaks.
6,831 megawatts short. That's the killer number. Enough power for millions of homes. Missing. Three years from now. And the tech companies keep announcing new data centers every week. Every single week.
I keep coming back to the same image. A country cheering record bank earnings and record AI valuations. All of it running on a grid that just admitted it can't keep up. The ground is moving under everyone's feet. Nobody in the crowd is looking down.
More on this tomorrow.
— Lauren
Editor, American Ledger
