The Trump administration, along with several state governors on Friday, urged the largest electricity grid in the U.S. to make the Big Tech pay for the construction of new power generation in the region managed by PJM Interconnection, the largest U.S. grid operator.
The PJM Interconnection serves 67 million customers in 13 states and Washington, D.C. This comes amid the sharp rise in electricity prices due in part to the data centers that tech companies are building to train and power artificial intelligence (AI).
Secretary of Energy Wright and Secretary of the Interior Burgum were joined by governors from Pennsylvania, Maryland, and Virginia to outline a new plan requiring PJM to undertake an emergency wholesale electricity auction to address escalating electricity prices and growing reliability risks.
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The plan would require PJM to hold a power auction for tech companies and other big customers that have not built their own power to bid for 15-year contracts for supply from new power plants. These deals would be worth at least $15 billion.
“We have to get out from underneath this bureaucratic system that we have in the regional grid operators and we’ve got to allow markets to work,” Burgum said at the White House. “One of the ways markets can work is to have the hyperscalers actually rapidly building power.”
While President Donald Trump had promised lower energy prices in his campaign, many parts of the U.S. have seen rising utility costs. This issue reportedly played a role in the landslide victories of Democrats Mikie Sherrill and Abigail Spanberger in the governors’ races of New Jersey and Virginia, respectively.
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PJM was six gigawatts short of its reliability requirement for 2027 in its most recent auction. Six gigawatts of electricity is roughly equivalent to the output of six large nuclear power plants. Pennsylvania Governor Josh Shapiro threatened to withdraw from PJM if it does not accept the proposed reforms.
“Make no mistake, if PJM, this sort of 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 it alone,” Shapiro said. PJM said in a statement that it is reviewing the proposals laid out by the White House and the governors.
Concerns about the massive amounts of energy consumed by AI data centers have been on a rise for a while. Recently, Democratic senators Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland and Richard Blumenthal of Connecticut expressed alarm that utility companies are passing billions in infrastructure upgrade costs to consumers while tech firms expand their artificial intelligence operations.