The Trump administration wants the largest power grid to add $15 billion worth of new power generation — and it wants tech companies to pay for it, even if they don’t need the capacity.
The White House and governors of several states in the region want grid operator PJM to bid for 15-year contracts for new generation capacity. The administration said it wants technology companies to bid on the contracts even if they don’t ultimately need the power for their data centers. Demand from data centers is expected to nearly triple over the next decade.
PJM he said was revising its “statement of principles” and that it would soon publish the results of a months-long planning process that seeks to add new capacity to the network.
The statement is non-binding, however, and behind the scenes, PJM doesn’t seem upset about management’s attempt to force its hand. “We don’t have much to say about it,” PJM spokesman Jeffrey Shields said he said Bloomberg yesterday. “We weren’t invited to the event they’re apparently having tomorrow and we won’t be there.”
PJM Interconnection, which covers 13 states in the Mid-Atlantic and Midwest, serves more than 65 million people and includes the northern Virginia data center hotspot. Electricity prices in 2025 increased by about 10% to 15% in the region compared to the previous year.
Over the past decade, PJM’s peak load has increased 10%according to Monitoring Analytics, and is expected to grow another 6.5% in 2027.
Much of the blame has fallen at the feet of technology companies and data center operators, who are using increasing amounts of energy for artificial intelligence.
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The price of natural gas is also to blame. PJM is heavily dependent on fossil fuels and the price has skyrocketed recently. Monitoring Analytics, PJM’s independent watchdog, says about 60% of price increases in 2025 are the result of high fossil fuel prices.
Grid operators have been put in a bind as data centers have increased demand for electricity after more than a decade of zero growth.
Building new fossil fuel power plants is a multi-year proposition costing hundreds of millions of dollars. Many utilities and energy providers are reluctant to commit to these timelines and costs. If the AI boom fizzles out, they could be left with unprofitable power plants built to run for decades.
Tech companies, not traditionally in the electricity business, are turning instead to renewables, which are cheaper, more modular and faster to deploy. Solar power and batteries were one of the early winners. A typical solar farm can be built in about 18 months, and because it can be built in phases, it can start providing energy before it is complete. This aligns more closely with data center construction, allowing companies to manage risk on similar timelines.
