WASHINGTON (AP) — The Trump administration and a bipartisan group of governors on Friday tried to step up pressure on the operator of the nation’s largest electric grid to take urgent steps to boost power supplies and keep electricity bills from rising even higher.
Administration officials said doing so is essential to win the artificial intelligence race against China, even as voters raise concerns about the enormous amount of power data centers use and analysts warn of the growing possibility of blackouts in the mid-Atlantic grid in the coming years.
“We know that with the demands of AI and the power and the productivity that comes with that, it’s going to transform every job and every company and every industry,” Interior Secretary Doug Burgum told reporters at the Eisenhower Executive Office Building, next to the White House. “But we need to be able to power that in the race that we are in against China.”
Trump administration says it has ‘the answer’
The White House and 13 governors want the mid-Atlantic grid operator to hold a power auction for tech companies to bid on 15-year contracts to build new power plants, so that data center operators, not regular consumers, pay for their own power needs.
Data centers that don’t have their own power source and don’t volunteer to be cut off from the grid during power emergencies should be billed for the cost of new power plants, they said.
They also want the operator, PJM Interconnection, to contain consumer costs by extending a cap that it imposed last year, under pressure from governors, that limited the increase of wholesale electricity payments to power plant owners. The cap applied to payments through mid-2028.
“Our message today is just to try and push PJM … to say, ‘we know the answer.’ The answer is we need to be able to build new generation to accommodate new jobs and new growth,” Energy Secretary Chris Wright said.
Governors Glenn Youngkin of Virginia, Wes Moore of Maryland and Josh Shapiro of Pennsylvania appeared with Burgum and Wright and expressed frustration with PJM.
“We need for PJM to take action, we need for PJM to take it seriously,” Moore told reporters. Youngkin called it a “massive, massive crisis.”
Grid operator issues its own plan to meet demand
PJM wasn’t invited to the event and said it’ll review the recommendations from the White House and governors.
Later Friday, it issued its own plan after searching for months for ways to meet rising electricity demand, including trying to fast-track new power plants and suggesting that utilities should bump data centers off the grid during power emergencies. The tech industry opposed the idea.
Still, a core element of PJM’s plan issued Friday involves adopting a formula to cut power during emergencies to big energy users, such as data centers, that rely on the grid for electricity.
Data centers typically have diesel-fueled backup generators to ensure an uninterrupted power supply, but they had envisioned using it in a power outage, not to help grid operators meet demand.
Another element of PJM’s new plan is fast-tracking the interconnection of power plants that data centers want to build.
The White House and governors don’t have direct authority over PJM, but grid operators are regulated by the Federal Energy Regulatory Commission, which is chaired by an appointee of President Donald Trump.
Trump and governors are under pressure to insulate consumers and businesses alike from the costs of feeding Big Tech’s data centers. Meanwhile, more Americans are falling behind on their electricity bills as rates rise faster than inflation in many parts of the U.S.
In some areas, bills have risen because of strained natural gas supplies or expensive upgrades to transmission systems, to harden them against more extreme weather or wildfires. But energy-hungry data centers are also a factor in some areas.
Ratepayers in the mid-Atlantic grid — which encompasses all or parts of 13 states stretching from New Jersey to Illinois, as well as Washington, D.C. — are already paying billions more to underwrite power supplies to data centers, some of which haven’t been built yet, analysts say.
Critics also say these extra billions aren’t resulting in the construction of new power plants needed to meet the rising demand.
Tech giants say they’re working to lower consumer costs
Technology industry groups have said their members are willing to pay their fair share of electricity costs.
On Friday, the Information Technology Industry Council, which represents tech giants Google, Meta, Microsoft and Amazon, said it welcomed the White House’s announcement and the opportunity “to craft solutions to lower electricity bills.”
The tech industry is committed to “making investments to modernize the grid and working to offset costs for ratepayers,” it said.
The Edison Electric Institute, which represents investor-owned electric companies, said it supports the idea from the White House and the governors of tech companies bidding — and paying for — contracts to build new power plants.
The idea is a new and creative one, said Rob Gramlich, president of Grid Strategies LLC, a Washington, D.C.-based energy markets and transmission consultancy.
But it’s not clear how or if it’ll work, or how it fits into the existing industry structure or state and federal regulations, Gramlich said.
Part of PJM’s problem in keeping up with power demand is that getting industrial construction permits typically takes longer in the mid-Atlantic region than, say, Texas, which is also seeing strong energy demand from data centers, Gramlich said.
In addition, utilities in many PJM states that deregulated the energy industry were not signing up power plants to long-term contracts, Gramlich said.
That meant that the electricity was available to tech companies and data center developers that had large power needs and bought the electricity, putting additional stress on the mid-Atlantic grid, Gramlich said.
“States and consumers in the region thought that power was there for them, but the problem is they hadn’t bought it,” Gramlich said.
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Levy reported from Harrisburg, Pennsylvania. Associated Press writer Matthew Daly in Washington contributed to this report.
