Trump Urges Tech Companies to Fund Power Plants

The Trump administration and several state governors are urging the largest electricity grid in the U.S. to have major technology companies cover the costs of new power plants. This demand arises amidst skyrocketing electricity prices on the PJM Interconnection grid, influenced largely by the data centers set up by these tech firms to support artificial intelligence initiatives.

The PJM grid, which serves over 65 million people across 13 states and Washington, D.C., includes northern Virginia, known as the largest data center market globally. In light of this situation, a pact has been forged between the Trump administration and several states, calling for tech companies to fund the construction of new power plants in the PJM region. Reports indicate that leading tech companies have committed to providing $15 billion towards new generation facilities for the grid.

During a White House event, Interior Secretary Doug Burgum and Energy Secretary Chris Wright, alongside governors from Maryland, Pennsylvania, and Virginia, announced this initiative. They urged PJM to conduct an emergency capacity auction to secure the necessary power, and emphasized the need to impose a cap on what existing power plants can charge in the grid’s capacity market, ultimately benefiting ratepayers. Burgum stated, “We have to get out from underneath this bureaucratic system… and allow markets to work,” suggesting that tech companies should expedite the construction of power facilities.

Despite Trump’s earlier promises to lower energy prices, rising utility bills are affecting many regions in the U.S. This escalation in costs has been politically detrimental, contributing to Democratic victories in the gubernatorial elections of New Jersey and Virginia. According to watchdog group Monitoring Analytics, the price to secure power capacity in PJM has surged, with $23 billion attributed to data centers, transferring additional costs to consumers.

Concerns about grid reliability have been escalating, with PJM indicating a shortfall of six gigawatts in power capacity, equivalent to the output of six large nuclear plants, based on their most recent auction results. Governor Josh Shapiro of Pennsylvania threatened to withdraw from PJM if the proposed reforms were not adopted, emphasizing that Pennsylvania would be compelled to act independently if necessary.

PJM has responded by stating it is currently reviewing the proposals presented by the White House and the governors, amid mounting pressure to reevaluate its operational strategies.