Trump, governors to push for power grid auction to lower energy costs
Air handling units sit on the roof of a CloudHQ data center in Ashburn, Va., in September. Virginia is home to more than 650 data centers, the highest concentration of data centers in the world. File Photo by Jim Lo Scalzo/EPA
Jan. 16 (UPI) — The Trump administration, backed by a group of eastern-states’ governors, are planning to ask the PJM Interconnection electric grid operator to hold an auction to help boost the power supply strained by data centers and lower prices for consumers.
The emergency power auction would offer 15-year contracts for electricity generation from newly built power plants. Normally, auctions offer one-year contracts to energy companies. The proposed auction would be open to tech companies to help pay for their extra power use.
Trump also wants regulators to put a cap on the amount that existing power plants can charge.
The auction would be let the tech giants pay to fuel their energy-gobbling data centers that process data for artificial intelligence. The cost of electricity generation for data centers is driving up the price of power to consumers. The White House can’t mandate the auction.
PJM Interconnection is the power grid that serves 13 states and Washington, D.C. It serves 65 million people and includes northern Virginia, which is the largest data center market in the world. The money raised would help finance construction of new power plants.
Energy Secretary Chris Wright, Interior Secretary Doug Burgum and governors from the mid-Atlantic region are scheduled to announce an agreement Friday to lobby PJM to take these actions, a White House official told CNBC.
“Under President Trump’s leadership, the administration is leading an unprecedented bi-partisan effort urging PJM to fix the energy subtraction failures of the past, prevent price increases and reduce the risk of blackouts,” White House spokeswoman Taylor Rogers said.
In its most recent auction, PJM was 6 gigawatts short of its reliability requirement for 2027, CNBC said. Six gigawatts is equal to six large nuclear plants.
“Instead of a blackout happening every one in 10 years, we’re looking at something more often,” said Abe Silverman, a researcher at Johns Hopkins University who served as general counsel for New Jersey’s public utility board.
Consumer rates are determined by state regulators, but also by the costs that utilities pay for energy from their plants or at auctions. Rates have risen because of the higher demand from AI and data centers.