Trump administration wants tech firms to fund new power plants
What's the story
The Donald Trump administration and a bipartisan group of governors are pushing PJM Interconnection, the largest electricity market in the US, to conduct a power auction. The proposed "emergency" auction would allow companies to buy electricity through 15-year contracts. This long-term approach is intended to facilitate infrastructure development by ensuring revenue, and deterring speculative requests from data center developers seeking grid connections.
Demand surge
Auction aims to address rising electricity demand
The push for an auction comes as power grids struggle to keep up with the rising electricity demand from artificial intelligence (AI). At the same time, lawmakers and tech companies expanding data centers are facing backlash from Americans over soaring electricity costs. PJM operates the largest electricity grid in the US, covering 13 states across the Midwest and Atlantic regions.
Bipartisan backing
Governors support auction proposal
All governors of the states within PJM's jurisdiction, including Democrats Josh Shapiro (D-PA) and Wes Moore (D-MD), have expressed their support for the auction proposal. However, it's important to note that neither the White House nor these governors can enforce such an auction.
Cost allocation
DOE's stance on data centers and power generation costs
The Department of Energy (DOE) believes that data centers should "pay more for new generation than residential customers." It has urged PJM to pass on the costs of new infrastructure to data centers unless they set up their own power plants or agree to cut back on energy use during peak demand periods. The auction could potentially result in $15 billion worth of new power generation, according to the DOE.