The Trump administration and several state governors on Friday asked the nation’s largest power grid to make big technology companies pay for new power plants.
Electricity prices on the PJM interconnection have exploded in recent years, in part because of the data centers tech companies are building to train and power artificial intelligence.
PJM Grid serves more than 65 million people in 13 states and Washington, DC. Its service area includes Northern Virginia, the world’s largest data center market.
The Trump administration and several states have signed an agreement requiring tech companies to pay for new power plants to be built in PJM. Big tech companies have agreed to provide $15 billion in funding for new generation power for the grid, according to a government statement.
The Trump administration and states have asked PJM to hold an emergency capacity auction to procure this power, according to the Department of Energy. According to the administration, PJM should also cap the amount that existing power plants can charge in the grid capacity market to protect ratepayers.
Interior Secretary Doug Burgum and Energy Secretary Chris Wright announced the plan at the White House, along with Maryland Gov. Wes Moore, Pennsylvania Gov. Josh Shapiro, and outgoing Virginia Gov. Glenn Youngkin. Representatives from PJM did not attend the event.
“We’ve got to get out from under the bureaucracy of regional transmission providers and we’ve got to get markets to work,” Burgum said at the White House. “One of the ways the market works is that hyperscalers really gain traction quickly.”
Despite President Trump’s promise to lower energy prices during his presidential campaign, utility bills are rising in many parts of the United States. The issue played a major role in the landslide victories of Democrats Mikie Sherrill and Abigail Spanberger in the gubernatorial races of New Jersey and Virginia, respectively.
The cost of securing PJM’s power capacity has exploded in recent years, with data centers attributable to $23 billion, according to watchdog Monitoring Analytics. Those costs are passed on to consumers. This amounts to a “huge wealth transfer,” the watchdog group told PJM in a letter in November.
PJM fell 6 gigawatts short of its 2027 reliability requirements in a recent auction. 6 gigawatts is equivalent to six large nuclear power plants.
Governor Shapiro threatened to withdraw from PJM if the reform proposals were not accepted.
“If PJM, this kind of faceless bureaucracy that is jacking up prices for the American people, does not change and does not reflect what we are presenting here today, Pennsylvania will be forced to act, and it will be forced to act alone,” Shapiro said.
PJM said in a statement that it is considering proposals presented by the White House and governors.
