Trump Orders Data Centers to Pay for Power as AI Strains the Grid

President Donald Trump is set to unveil⁢ an emergency plan Friday⁤ (Jan.‍ 16) that would ‍require⁤ data center owners, not households, to cover the cost of new power plants as electricity demand surges.

The proposal comes ‍as ⁤AI-driven data⁣ center construction accelerates in the PJM (Pennsylvania-New Jersey-Maryland) transmission ⁢region, a key⁢ hub for ⁢cloud infrastructure supporting⁢ payments and commerce.

Bloomberg ‍reported that Trump and⁣ governors in the PJM footprint will direct PJM Interconnection to‍ run a one-time reliability auction ⁤in which data center operators bid for 15-year contracts supporting new generation.

A White House official ⁤told Bloomberg the auction could support approximately $15 billion⁤ in new plants. The initiative will be presented friday as a nonbinding “statement of principles” signed by Trump’s National ⁤Energy Dominance ⁢Council and governors‍ in⁤ states including pennsylvania,Ohio,and Virginia. PJM serves more than 67 million people.

Trump has argued that tech companies building power-hungry facilities should “pay their own way,” ⁢linking the plan to⁤ consumer bills. “I never want Americans to pay higher Electricity bills because ⁢of⁣ Data centers,” he said in a social media post cited by bloomberg. Bloomberg noted the average⁢ U.S. retail electricity price hit a record 18.07 cents per kilowatt-hour in⁣ September,⁤ up 7.4%.

The administration is ‍pushing PJM to hold the special auction‍ by the end of September.Unlike PJM’s standard auctions that procure supplies for a ‍12-month period, this sale would lock in long-term‍ payments to generators – and require data center⁢ companies to pay for the contracted capacity ⁤for the full term whether they use it or not.

Bloomberg said the approach‍ could accelerate⁤ new natural gas ⁤generation⁢ and potentially nuclear projects, while potentially disadvantaging smaller⁤ AI infrastructure providers with ‍less ability to absorb higher power costs. PJM ⁣is not expected at Friday’s event; a spokesman told Bloomberg‍ the grid ⁣operator was not ⁤invited.

PYMNTS has been following the tension between AI expansion and grid constraints. PYMNTS reported that Google, Meta and others pledged billions for⁤ new AI data⁤ centers – with Google saying it planned $25 billion⁣ in spending in the PJM region. PYMNTS‍ also examined‍ how investors have been snapping up utility companies to ⁤capitalize on⁤ rising electricity‍ demand from data centers. PYMNTS covered federal ⁢efforts to⁤ speed data center connections to the ⁣grid. And‍ it reported Meta’s deals with three nuclear energy firms to power AI-focused facilities.