Did the White House just redraw the electricity bill?
On Jan. 16, the Trump administration — joined by a group of Mid‑Atlantic governors — unveiled a plan to prod the region's grid operator into ordering an "emergency" wholesale electricity auction aimed at financing new, large-scale power plants. The goal, officials say, is to have data centers and other big energy users sign long-term contracts that underwrite more than $15 billion in new generation, shifting costs away from ordinary ratepayers and toward the tech firms fueling surging demand.
What’s being proposed
Energy Secretary Chris Wright and Interior Secretary Doug Burgum, leading the administration’s National Energy Dominance Council, urged PJM Interconnection — the operator of the Mid‑Atlantic grid — to temporarily change market rules so new baseload plants can get 15 years of revenue certainty. The White House package also calls for limiting what existing plants can collect in PJM’s capacity market, and for allocating the costs of any newly procured generation to data centers that haven’t self‑procured capacity or agreed to be curtailable.
The administration released its statement of principles and a fact sheet through the Department of Energy; you can read the announcement on the Energy Department website.
Why 15 years? Officials say long contracts reduce financing risk for developers, speeding construction. The target: new, reliable around‑the‑clock generation to serve manufacturing and AI growth — and to blunt what the administration calls the risk of blackouts and rising bills.
The spark: AI, data centers and politics
Data centers are the political and technical fulcrum of this debate. Their rapid expansion — and voracious appetite for electricity as AI computing scales up — has become a flashpoint for governors worried about retail bills and grid reliability. At the White House event, Democratic and Republican governors, including Pennsylvania’s Josh Shapiro and Virginia’s Glenn Youngkin, pressed PJM to act.
The administration framed the move as protecting families and industrial competitiveness while making Big Tech "pay its own way," in Interior Secretary Burgum’s words. It’s also a clear political play: rising utility bills are an electoral vulnerability, and data centers offer an obvious target for assigning blame.
How the auction would work — and why it’s controversial
The idea is unconventional: force or pressure PJM to run an auction that effectively locks large energy purchasers into capacity contracts — payments for availability whether they use the power or not. Those upfront payments would help guarantee revenue for new plants, encouraging developers to break ground.
But legal and logistical questions abound. PJM said it wasn’t invited to the White House event; its board is working on its own plan and will review outside proposals. PJM’s markets are regulated by the Federal Energy Regulatory Commission (FERC), which could be receptive — the commission’s chair is a Trump appointee — but the operator and market stakeholders would need to reconcile a host of practical issues: who can be compelled to take a contract, how costs are allocated across states, and how such contracts fit into existing state and private procurement rules.
Analysts point to more mundane hurdles, too. Building power plants in PJM territory often requires long permitting and transmission upgrades; the region doesn’t move as fast on industrial construction as places like Texas. Simply promising revenue certainty doesn’t erase those constraints.
Reactions from industry and experts
Tech trade groups publicly welcomed the discussion. The Information Technology Industry Council said it welcomed the chance to "craft solutions to lower electricity bills" and highlighted its members’ ongoing grid investments. Utilities’ trade groups, such as the Edison Electric Institute, said they support frameworks that let tech companies bid for and pay for capacity that keeps the lights on.
But experts caution against simplistic fixes. Rob Gramlich of Grid Strategies called the auction idea "new and creative," but warned it might not resolve the core problem: in many cases, power availability wasn’t actually purchased in long-term contracts — so it wasn’t reserved for households and factories in the first place. Others noted that pressing data centers to accept curtailment during emergencies is politically fraught and commercially unattractive for tenants that rely on continuous operations.
The broader context: grid stress, markets and the AI race
PJM’s capacity auctions have become politically charged after years of plant retirements and rising capacity prices. The White House argues that previous policies prompted premature closures of reliable coal and gas plants, leaving supply gaps; critics say the picture is more complex, involving market design, fuel availability and transmission limitations. Officials framed the auction plan as necessary to power an industrial revival and to „usher in the age of artificial intelligence.“
It’s worth remembering this sits at the intersection of energy policy and a tech-driven industrial strategy. Google and other companies are even exploring unconventional ideas for future data centers — from space‑based concepts to new grid interactions; for background on one ambitious concept, see Google’s Project Suncatcher plan to explore off‑earth data center opportunities here. And as AI tools increasingly tie into everyday services, companies are also pushing new research and products that raise the stakes for reliable electricity — an ecosystem change reflected in developments like Gemini’s growing integration into productivity tools here.
What happens next
The White House doesn’t have direct authority over PJM, which is governed by member utilities and regulated by FERC. Still, the administration’s statement raises the political temperature and puts governors and federal officials on the same page — a helpful posture when seeking market or regulatory changes. PJM says it will consider the proposals alongside its own work; FERC and state regulators will be central if any binding changes are pursued.
This is a fast-moving policy debate where strategy, markets and politics collide. Expect detailed rulemaking fights, jurisdictional sparring, and plenty of coordination attempts between tech companies, utilities and state governments — all while the lights and server racks keep humming.