The Trump administration, along with a coalition of bipartisan governors, is urging PJM Interconnection, the nation’s largest electricity market, to conduct a power auction aimed at encouraging the development of new power plants on a grand scale.
Both lawmakers and tech firms responsible for creating new data centers are facing mounting criticism from the public due to escalating electricity bills.
As the operator of the most extensive electricity grid in the United States, PJM covers 13 states across the Midwest and Atlantic regions, including Virginia, which hosts a significant number of data centers. Governors from all these states, such as Democrats Josh Shapiro from Pennsylvania and Wes Moore from Maryland, have endorsed a recent statement alongside Secretary of the Interior Doug Burgum and Secretary of Energy Chris Wright. However, CNN highlights that neither the federal government nor state governors possess the authority to compel the auction. Additionally, Bloomberg points out that PJM was not involved in today’s announcement.
The Department of Energy asserts that data centers should bear a higher financial burden for new power generation compared to residential users. Specifically, it suggests that PJM should impose infrastructure costs on data centers unless they establish their own power sources or agree to reduce their energy consumption during times of high demand. The DOE estimates that the auction could result in $15 billion worth of new power generation.
While the Trump administration has advocated for a revival of coal, gas, and nuclear power plants in the United States, it has also taken steps to hinder the expansion of wind and solar farms, which have emerged as the swiftest-growing sources of new electricity in recent years.
