Ohio leans on coal and gas as PJM capacity costs claim a bigger slice of power bills

Ohio leans on coal and gas as PJM capacity costs claim a bigger slice of power bills Capacity charges hit 16% of PJM's wholesale power cost last year, and Ohio's blocked wind and solar projects leave it short of the cheap supply that could ease the squeeze. Capacity charges made up about 16% of the wholesale cost of electricity across PJM last year, Jeff Shields, the grid operator's senior manager for external communications, said in a Canary Media report published Friday (2026-06-05).⁴ That share matters because capacity is the part of the bill that moves when supply gets tight, and Ohio has spent years narrowing its own options. The state drew about 7.5% of its electricity from wind and solar in 2025, against 80.6% from coal and gas, according to federal data cited in the report.⁴ A grid that leans that heavily on thermal generation has little cheap marginal supply to lean on when capacity prices climb. The cost of that posture is not abstract. Had Ohio utilities kept delivering the energy savings they achieved before 2020, cumulative savings could have reached as much as 70 terawatt-hours, Specian told Canary Media.⁴ The wind and solar projects that were blocked would, on their own, likely have displaced about 7.1 million metric tons of carbon dioxide from fossil plants, said Ben King, a director at Rhodium Group's energy and climate practice.⁴ Ohio's permitting fight is the mechanism behind the gap. Matt Schilling, a spokesperson for the Ohio Power Siting Board, noted the board has approved 49 solar projects across the state, and declined to comment on a report from Save Ohio Parks.⁴ The Kingwood Solar case, which challenges the board's deference to local opposition, is due to be decided soon.⁴ What makes the timing awkward is where demand is heading. Data centers now account for roughly half of incremental U.S. electricity demand growth, according to the IEA's global energy assessment.² PJM sits at the center of that buildout. New load on that scale lands on the same capacity market whose charges already make up a sixth of wholesale costs. PJM itself has flagged the strain. In its winter outlook dated Nov. 3, 2025, the operator said it had sufficient resources to serve growing demand under expected conditions, but warned that reserve margins continue to tighten and that generator performance will be crucial.³ Adequate is not the same as comfortable. A system running thinner reserves prices capacity higher, and a state adding little new supply absorbs more of that cost rather than less. The directional read in the market matches the setup. Signals across PJM real-time skew firmly bullish, with the weight of recent indicators pointing up rather than down.^4,3 That is consistent with a grid where demand growth is structural, near-term supply additions are being slowed at the permitting stage, and capacity is doing more of the work in setting the wholesale price. There is a counterweight worth naming. Approving 49 solar projects is not nothing, and a favorable Kingwood Solar ruling could reopen a pipeline of cheaper generation that takes pressure off capacity costs over time.⁴ But solar approved is not solar built, and interconnection and construction lead times mean any relief arrives years after the demand does. The mismatch between how fast data center load shows up and how slowly new supply clears is the core problem. For traders, the question is whether Ohio is the canary or the outlier. If a state with deep coal-and-gas dependence and an active siting fight is paying a rising capacity premium while data center demand accelerates, the same arithmetic applies across PJM's footprint. Coal still anchors a large share of generation, and globally over 2,000 GW of coal capacity remains operational even as renewables undercut it on cost, which says more about retirement timing than about economics.¹ The near-term signal to watch is the Kingwood Solar decision and what it implies for the rest of Ohio's blocked queue. A ruling that loosens local-opposition deference would mark the first crack in the supply constraint that is feeding higher capacity costs. A ruling the other way leaves PJM tightening into accelerating data center demand with one of its member states still betting against the cheapest new megawatts on the table.^4,2