GRID COMPARISON

ERCOT vs PJM: Which Grid for Your Datacenter?

Should I build my datacenter in ERCOT (Texas) or PJM (Mid-Atlantic)?

ERCOT offers 30% lower power costs ($0.045/kWh vs $0.065/kWh) and no capacity market charges, but has higher curtailment risk and a 410 GW interconnection queue (87% from data centers). PJM has more stable grid operations but higher all-in power costs. ERCOT Batch Zero projects target 18-24 months; non-Batch Zero face multi-year waits. Choose ERCOT for cost optimization, PJM for reliability.

Last updated: April 2026

Head-to-Head Comparison

MetricERCOT (Texas)PJM (Mid-Atlantic)Advantage
Average Power Cost$0.045/kWh$0.065/kWhERCOT
Interconnection Queue410 GW (18-24mo Batch Zero, multi-year non-Batch)260 GW (3-5 years, cluster reform pending)Tie
Capacity MarketNone (energy-only)Yes ($329-333/MW-day, 833% surge)ERCOT
Curtailment RiskHigher (summer peaks)Lower (more reserves)PJM
Renewable %35% (wind/solar)8%ERCOT
Grid ReliabilityVariable (Winter Storm Uri)More stablePJM
State IncentivesNo income tax + Chapter 313Sales tax exemptionsTie

Decision Framework

Choose ERCOT If:

  • •Power cost is primary driver (training workloads)
  • •Can tolerate occasional curtailment
  • •Want to co-locate with renewable generation
  • •Can target Batch Zero (18-24 month) timeline or plan for multi-year non-Batch wait
  • •No state income tax is valuable

Choose PJM If:

  • •Reliability is non-negotiable (financial services)
  • •Need proximity to East Coast customers
  • •Want faster interconnection timeline
  • •Building latency-sensitive inference
  • •Existing ecosystem in Northern Virginia

Frequently Asked Questions

Why is ERCOT power so cheap?

ERCOT is an energy-only market with no capacity payments, meaning generators only get paid when producing. Combined with abundant wind/solar and no interstate transmission costs, wholesale rates are 30-40% below national average.

What happened during Winter Storm Uri?

In February 2021, ERCOT experienced cascading failures during extreme cold, causing widespread blackouts. Post-Uri reforms include weatherization requirements and improved reserve margins, but the energy-only market structure remains.

What is PJM's capacity market and why did it spike?

PJM runs a capacity market where generators are paid to be available. Prices surged 833% from $29/MW-day to $269/MW-day in one auction, then hit the FERC cap at $329-333/MW-day. Data center demand drove 63% of the increase, adding $9.3B in costs across PJM's 13-state footprint. For a 100 MW facility, capacity charges alone now exceed $12M/year — a cost layer that effectively does not exist in ERCOT.

Can I have sites in both ISOs?

Yes, many operators split workloads—latency-sensitive inference in PJM (closer to East Coast users), training and batch processing in ERCOT (lower costs). This hybrid approach optimizes both cost and performance.

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