The Trump administration is pushing for the largest electricity grid in the country to add $15 billion worth of new power generation. It wants technology companies to pay for this new capacity, even if they do not ultimately need the power for their data centers.
The White House and several state governors in the region are urging grid operator PJM Interconnection to hold an auction for 15-year contracts for new generating capacity. This comes as demand from data centers is forecast to increase nearly threefold over the next decade.
PJM, which serves more than 65 million people across 13 Mid-Atlantic and Midwestern states including the data center hotspot of northern Virginia, stated it is reviewing the administration’s “statement of principles.” The grid operator noted it will soon release the results of a months-long planning process aimed at adding new capacity. However, this statement is non-binding, and PJM does not appear enthusiastic about the administration’s attempt to force its hand. A PJM spokesman commented that the organization was not invited to the administration’s related event and would not be attending.
Electricity rates in the PJM region were up about 10% to 15% in 2025 compared to the year before. According to its independent monitor, Monitoring Analytics, PJM’s peak load has increased 10% over the last decade and is expected to rise another 6.5% in 2027.
Much of the rising demand and higher costs are attributed to technology companies and data center operators, which are using increasing amounts of power for artificial intelligence. The price of natural gas, a fuel on which PJM is heavily dependent, has also soared and is blamed for about 60% of the 2025 price increases.
Grid operators face a difficult challenge. Data centers have rapidly increased electricity demand after more than a decade of zero growth. Building new fossil fuel power plants is a years-long, costly endeavor, and many utilities are hesitant to make such commitments, fearing they could be left with unprofitable plants if the AI boom subsides.
Instead, tech companies are increasingly turning to renewable energy sources like solar and batteries, which are cheaper, modular, and faster to deploy. A typical solar farm can be built in about 18 months and can begin delivering power before it is fully complete. This timeline aligns more closely with data center construction, allowing companies to manage financial risk more effectively.