America’s race to build the infrastructure for artificial intelligence is colliding with the limits of its power grid, and households are starting to feel it on their monthly bills. As electricity demand from massive server farms spikes, the White House and governors are scrambling to keep the lights on and keep voters from paying for the tech industry’s growth.
What began as a quiet buildout of data centers is now a full-blown political and economic fight over who pays for new power plants, transmission lines, and backup capacity. I see a rare alignment forming between President Donald Trump, Democratic and Republican governors, and some members of Congress, all trying to shift more of the cost burden from ordinary ratepayers to the companies training large AI models and running cloud platforms.
The AI data center boom collides with an aging grid
The AI boom is arriving at what one account describes as both the best and worst moment for the grid, with The AI surge in computing demand landing just as America faces aging infrastructure and electricity prices that were already at record levels for many customers. In regions that host clusters of hyperscale facilities, utilities are racing to secure new generation and transmission, often years faster than they originally planned, which is pushing up the cost of power for everyone connected to those systems. These server farms support everything from chatbots and cloud storage to streaming and federal supercomputing, and their appetite for electricity is measured in gigawatts rather than neighborhoods.
In the PJM power market, which covers a large swath of the mid-Atlantic and parts of the Midwest, analysts have warned that data centers are driving a wave of new capacity needs starting in 2026, with developers proposing new plants and grid upgrades to keep up with demand. A recent analysis labeled the trend a Must Read moment for regulators, noting that the scale of new load from AI and cloud computing is reshaping long term planning for PJM Interconnection and other regional operators. The result is a structural shift in who uses power and when, with industrial scale digital infrastructure increasingly competing with homes and small businesses for limited supply.
Why residential bills are rising faster than data centers’
For many families, the most visible part of this story is the bill in the mailbox. But the rise in costs has not affected each type of user equally, and But the pattern of increases has come as a surprise to many electricity users who assumed large tech companies would shoulder most of the burden. According to recent data from the Energy Information Administrati, residential customers have seen steeper percentage jumps than some large commercial and industrial users, in part because of how utilities structure long term contracts and demand charges. Data centers often negotiate bespoke deals that lock in lower rates in exchange for guaranteed consumption, while households are exposed to more of the volatility in wholesale markets.
According to that same federal data, the gap between what big power users pay and what small customers pay has widened in several regions that have attracted clusters of new server farms. In some cases, utilities have justified rate hikes by pointing to the cost of expanding the grid to serve new industrial scale loads, even as those facilities benefit from discounted tariffs and tax incentives. That dynamic is fueling political backlash, with lawmakers arguing that it is unfair for a suburban family to subsidize the power needs of a nearby AI campus that runs 24 hours a day. The Energy Information Administrati figures are now a central talking point for governors and members of Congress who want to rewrite the rules of who pays for new infrastructure.
Trump and governors push PJM for an emergency auction
The most dramatic response so far is unfolding in PJM Interconnection, the nation’s largest power market, where President Donald Trump and a bipartisan group of governors are pressing for an emergency intervention. The White House and governors of the 13 state PJM Interconnection region want the grid operator to run a special capacity auction that would let tech companies bid directly for long term power contracts, rather than relying on traditional rate structures that spread costs across all customers. According to one detailed account, The White House and those governors see the auction as a way to head off electricity price hikes spurred by the tech industry’s rapid expansion and to make sure new plants are financed by those who need them most.
By Jarrett Renshaw and Tim reported that governors are heading to the White House to unveil a deal that would curb power prices by shifting more of the cost of expanding the grid onto the companies driving demand, rather than onto households and small businesses. Another report on PJM Interconnection described how President Donald Trump mounted a dramatic intervention into the market on a Fri meeting, signaling that the administration is prepared to lean on the independent grid operator to secure enough capacity for the next 15 years. In parallel, White House and Governors Pressure Grid Operator efforts are intensifying, with The White House and a bipartisan group of state leaders pressing PJM to Boost Power Supply and Slow Electricity Price Hikes by accelerating new generation and transmission projects.
The White House plan: make Big Tech pay, build big plants again
Inside the administration, the strategy has two main pillars: force data centers to pay more of the true cost of their power and revive large scale generation projects that can serve them. Takeaways from one internal summary by Bloomberg AI describe how President Donald Trump and US Northeastern governors agreed to push for an emergency wholesale electricity auction that would secure long term contracts for new electricity generation capacity, with tech companies expected to be the primary buyers. A separate account titled Trump Orders Emergency Power Auction for Big Tech AI Data Centers notes that President Trump and several state leaders, including those in the US Northeastern corridor, want the auction to ensure that Big Tech AI data centers do not simply lean on existing capacity that was built for other users.
The administration is also signaling a return to large baseload projects. After forcing the shutdown of reliable power plants across the rust belt, a federal fact sheet argues that the region has experienced some of the highest electricity prices in the country and a higher risk of blackouts, and it outlines a plan to build big power plants again to stabilize the system. That document states that After those closures, the Trump administration now wants to encourage new large scale facilities that can decrease the risk of blackouts and provide firm capacity for industrial loads like AI clusters. In parallel, Strategic Federal Actions Aim to Strengthen AI and Energy Infrastructure through a package that Directs the Commerce Department to launch a financial support initiative, including loans, grants, and tax incentives for data center and energy projects, while also promising to expedite permitting for qualifying projects that can relieve grid bottlenecks.
States and Congress test new ways to shield consumers
While the White House leans on PJM and other grid operators, governors and lawmakers are experimenting with their own tools to keep local voters from footing the bill. In New York, The Democratic governor has warned that new facilities should pay more or bring their own clean energy, and she has floated the idea that data centers might be required to procure dedicated renewable projects or other power sources, including fossil fuels, rather than relying entirely on the existing grid. That Politico account notes that The Democratic leader’s team is still working out the details, but the message to developers is clear: do not expect to plug in for cheap and leave everyone else to absorb the cost of new lines and substations.
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