Trump administration officials and a bipartisan group of governors announced a plan Friday to tackle high electricity prices by essentially having giant technology companies pay for the construction of new power supplies in the area managed by the largest United States grid operator.
At a White House event on Friday, Energy Secretary Chris Wright and Secretary of the Interior Doug Burgum, along with the governors from Pennsylvania, Maryland, and Virginia, outlined a plan for an emergency wholesale electricity auction that would make technology companies pay for new power plants in the PJM Interconnection, which manages much of the grid in the eastern U.S. It has seen rising prices that have been attributed to rising demand from the addition of data centers used for artificial intelligence companies.
“We want to make it easier to build things in America, because that’s how we can stop price rises and grow opportunities,” Wright said.
The order would require PJM Interconnection to hold a power auction offering tech companies and data centers the opportunity to bid for 15-year contracts for new electricity generation capacity. The plan would cap the amount existing power plants can charge in the PJM market.
It would require data centers to pay for new electricity generation built on their behalf, whether or not they use the power. The plan urges PJM to take temporary measures to offset power plant retirements, prevent more price increases, and decrease the risk of blackouts.
PJM was not in attendance at the White House event, but Burgum noted that PJM has been briefed about the plan. He said that holding an emergency auction in September is a viable timeline.
In a statement, PJM said that it was reviewing the White House proposal and referred to a plan it published Friday to integrate large-load customers without hurting reliability or affordability.
Gov. Josh Shapiro (D-PA), however, warned that if PJM does not change, the state would be “forced to go its own,” adding that the state is the second-largest net energy exporter in the country.
“[M]ake no mistake, if PJM, this faceless bureaucratic organization that is driving prices up on the American people, does not change and does not reflect what we are putting forth here today, Pennsylvania will be forced to act, and forced to go at it alone,” Shapiro said.
The announcement is part of an effort to address the growing energy demand from data centers, particularly for AI operations. With the midterm elections on the horizon, the Trump administration is feeling pressure from rising electricity prices.
The plan is bipartisan. Gov. Wes Moore (D-MD) said, “It shouldn’t be lost by anybody that we are standing here in a bipartisan fashion to make sure that we’re having a recognition of something of true and shared importance, because energy prices are some of the main concerns that I hear.”
President Donald Trump vowed before taking office to slash prices by half. But electricity prices have risen over the last year as demand from data centers has soared. In the latest update to the Consumer Price Index, the Bureau of Labor Statistics reported electricity prices rose by 6.7% for the year ending in December, more than double the rate of inflation.
Grid operators such as PJM hold capacity auctions on an annual basis in order to guarantee there is enough power generation available for future peak demand periods.
Last summer, the PJM capacity auction was capped at nearly $330 per megawatt-day, up from the previous auction’s $270 per MW-day. The grid operator at the time said it expects a year-over-year increase of 1.5% to 5% in some customers’ bills.
Trump earlier this week first floated the idea of requiring Big Tech to foot the bill for all of their energy needs, so as not to take resources from the existing grid and risk higher utility bills for homeowners.
“I never want Americans to pay higher Electricity bills because of Data Centers,” Trump said in a Tuesday post to Truth Social.
Data centers are highly energy-intensive and have been linked to increased energy demand.
Demand from data centers is expected to surge dramatically in the next decade, with BloombergNEF estimating that data centers will consume more than 100 gigawatts by 2035. By comparison, data center demand in 2024 was estimated to be around 34.7 gigawatts. For instance, 1 megawatt is traditionally considered to be roughly the same amount of energy consumed by 400 to 900 homes annually.
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Edison Electric Institute President and CEO Drew Maloney said in a statement that, “We support President Trump and the Governors’ focus on swift changes to help lower energy costs for customers and get more power plants online. We have called for fundamental reforms to ensure resource adequacy in PJM. We look forward to working with FERC and the state commissions to be part of the solution.”
