Trump wants tech companies to foot bill for new power plants due to AI

The Trump administration and bipartisan state governors on Friday urged the largest electricity grid in the U.S. to make the big technology companies pay for new power plants.

Electricity prices have exploded in recent years on PJM Interconnection due in part to the data centers that tech companies are building to train and power artificial intelligence.

The PJM grid serves more than 65 million people across 13 states and Washington, D.C. Its service area includes northern Virginia, the largest data center market in the world.

The Trump administration and the governors of Maryland, Pennsylvania, Indiana and Virginia signed an agreement that calls for tech companies to pay for new power plants built in PJM. The tech companies will fund $15 billion of new generation for the grid, according to an administration statement.

They also urged PJM to hold an emergency capacity auction to procure this power, according to the Department of Energy. PJM should also cap the amount that existing power plants can charge in the grid’s capacity market to protect ratepayers, they said.

“Under President Trump’s leadership, the administration is leading a unprecedented bi-partisan effort urging PJM to fix the energy subtraction failures of the past, prevent price increases, and reduce the risk of blackouts,” White House spokeswoman Taylor Rogers said.

Utility bills are rising in many parts of the U.S. despite Trump’s promise to lower energy prices during his presidential campaign. The issue played a major role in the landslide victories of Democrats Mikie Sherrill and Abigail Spanberger in the governors’ races of New Jersey and Virginia, respectively.

The price to secure power capacity in PJM has exploded in recent years with $23 billion attributable to data centers, according to watchdog Monitoring Analytics. Those costs are passed down to consumers. This amounts to a “massive wealth transfer,” the watchdog told PJM in a November letter.

PJM was six gigawatts short of its reliability requirement for 2027 in its most recent auction. Six gigawatts is equivalent to six large nuclear plants.

The power shortage makes blackouts more likely, said Abe Silverman, a researcher at Johns Hopkins University who served as general counsel for New Jersey’s public utility board from 2019 to 2023 under Democratic Gov. Phil Murphy.

“Instead of a blackout happening every one in 10 years, we’re looking at something more often,” Silverman said.