They are advocating for an ‘emergency’ power auction.
They are advocating for an ‘emergency’ power auction.
The administration of Trump, along with a bipartisan contingent of governors, is urging the PJM Interconnection, which is the largest electricity market in the US, to conduct a power auction aimed at facilitating a significant expansion of new power facilities.
Collectively, they are “encouraging” PJM to undertake an “emergency” auction for firms to secure electricity through 15-year agreements. The notably lengthy duration of the contracts is intended to facilitate infrastructure development by ensuring profitability and deterring speculative applications to connect to the grid from data center builders.
This action arises as power networks strive to accommodate the rising electricity demands from AI, while legislators and tech companies developing new data centers confront growing backlash from the public regarding escalating electricity prices.
PJM oversees the largest electricity grid in the US, which covers 13 states across the Midwest and Atlantic regions and encompasses the densest concentration of data centers in Virginia. The governors from all involved states, including Democrats Josh Shapiro (D-PA) and Wes Moore (D-MD), endorsed the statement released today alongside Secretary of Interior Doug Burgum and Secretary of Energy Chris Wright. CNN points out, however, that neither the White House nor governors have the authority to enforce the auction. Moreover, Bloomberg reports that PJM was not invited to the announcement made today.
According to the Department of Energy (DOE), data centers are expected to “should pay more for new generation than residential customers.” Specifically, it urges PJM to allocate expenses for new infrastructure to data centers, unless they operate their own power plants or consent to limit their energy consumption during supply shortages. The auction has the potential to generate $15 billion in new energy production, as per DOE estimates.
While the Trump administration has advocated for a revival of coal, natural gas, and nuclear energy facilities in the US, it has concurrently made efforts to impede the expansion of wind and solar farms, which had emerged as the most rapidly expanding sources of new electricity in recent years.
