Trump and northeastern governors push for massive electricity auction to make tech giants defray costs
A data center is seen in Ashburn
By Ramishah Maruf, Kit Maher, CNN
(CNN) — The Trump administration and a consortium of governors from northeastern states are asking PJM, the country’s largest electrical grid operator, to hold an emergency power auction as part of an effort to make technology giants pay for surging power costs from new data centers.
In the auction, tech companies will be able to bid on 15-year contracts for electricity generation from newly constructed power plants, Bloomberg first reported. Although power auctions are standard practice and routine, they are typically for one-year periods of electricity supplies and are open to public utilities and private power companies.
The proposed auction – which the White House and governors cannot mandate – is unusual both for the extraordinary length of the contract and because it will be limited to technology companies that build power-hungry data centers. The billions of dollars raised from the auction would fund new power plants in the region that the tech companies would use to satisfy their growing demand for energy over the next decade and a half.
The plan could also help add much-needed electricity supply to the region and lower costs for the 67 million residents who are served by the PJM grid.
“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,” said White House spokesperson Taylor Rogers. “Ensuring the American people have reliable and affordable electricity is one of President Trump’s top priorities, and this would deliver much-needed, long-term relief to the Mid-Atlantic region.”
PJM for the first time in its history last month failed to match supply with demand at an auction. The company said it could not reliably meet the anticipated electricity needs of the customers it serves between June 2027 and May 2028: PJM said it could generate 5.2% less electricity than needed.
The company blamed runaway demand from data centers.
“This auction leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply, and the solution will require concerted action involving PJM, its stakeholders, state and federal partners, and the data center industry itself,” said Stu Bresler, PJM’s chief operating officer, in a statement following the December auction.
But it’s not clear that PJM will be on board with the government’s directive. The company said it was given no advance notice of the plan.
“Apparently they will make an announcement,” the company said in a statement to CNN. “We have not been invited and will not be there.”
PJM is the country’s largest grid, covering thirteen states and the District of Columbia.
While some states like Virginia are in the midst of an AI-fueled data center boom, all that server power is straining the interconnected grid and spiking energy costs throughout the entire region. Virginia’s largest utility is increasing rates by roughly 9%, and New Jersey utility bills jumped by more than 20% this year.
Americans have been facing sticker shock when opening their electricity bills, as the tech industry rapidly builds data centers and other infrastructure to power AI systems across the United States. These centers, which have cost the tech industry billions of dollars to make, use up a gargantuan amount of electricity.
Some communities have rung the alarm on environmental impacts as well as worries about AI eliminating jobs.
Trump has directed his attention toward the rising costs, teasing plans in January to address the rising bills with Big Tech.
“Therefore, my Administration is working with major American Technology Companies to secure their commitment to the American people, and we will have much to announce in the coming weeks to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption, in terms of higher Utility bills,” Trump said in a Truth Social post.
Some tech giants have already been trying to come up with solutions. Microsoft, for example, said it will ask to pay higher electricity bills in areas where it’s building data centers. It said it would also cover the cost of updating and adding necessary electricity to the grid.
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