Trump administration wants tech companies to buy $15B of power plants they may not use

The Trump administration wants the nation’s largest electric grid to add $15 billion in new energy generation — and he wants tech companies to pay for it, even if they don’t need the capacity.

The White House and the governors of several states in the region want grid operator PJM to hold an auction for 15-year contracts for new generation capacity. The government said it wants tech companies to bid for the contracts even if they don’t ultimately need the power for their data centers. Demand from data centers is expected to almost triple in the next ten years.

PJM said the company was reviewing its “statement of principles” and would soon release the results of a months-long planning process aimed at adding new capacity to the grid.

However, the declaration is not binding, and behind the scenes PJM does not seem to be happy that the government is trying to force its hand. “We don’t have much to say about this,” said PJM spokesman Jeffrey Shields told Bloomberg yesterday. “We weren’t invited to the event they’re apparently having tomorrow and we won’t be attending either.”

PJM Interconnection, which covers 13 states in the Mid-Atlantic and Midwest, serves more than 65 million people and includes the data center hotspot of Northern Virginia. Electricity rates in 2025 were up about 10% to 15% in the region compared to the previous year.

Over the past ten years, PJM’s peak load has increased increased 10%According to Monitoring Analytics, this is expected to increase by another 6.5% by 2027.

Much of the blame is placed on technology companies and data center operators, who are increasingly turning their energy to AI.

The price of natural gas is also responsible for this. PJM is highly dependent on the fossil fuel and the price has increased dramatically recently. Monitoring Analytics, PJM’s independent monitor, says that around 60% of price increases in 2025 will be due to high fossil fuel prices.

Grid operators have been squeezed as data centers have ramped up demand for electricity after more than a decade of zero growth.

Building new fossil fuel power plants is a years-long proposition costing hundreds of millions of dollars. Many utilities and energy suppliers are reluctant to commit to these timelines and expenditures. If the AI ​​boom fades, they could be left with unprofitable power plants built to run for decades.

Technology companies, which were not traditionally active in the energy sector, have instead turned to renewable energy sources, which are cheaper, more modular and faster to deploy. Solar energy and batteries were an early winner. 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 completed. This is more in line with data center construction, allowing companies to manage risks on similar timelines.