The White House is pressing the country’s largest electric grid operator to move quickly on a special power auction, arguing that a surge of artificial intelligence and cloud data centers is outpacing the system’s ability to keep the lights on. At stake is how the United States finances the next wave of power plants, and whether Big Tech or ordinary households end up paying for the buildout.
The push centers on PJM Interconnection, the vast regional transmission organization that keeps electricity flowing for more than 65 million people from Illinois to New Jersey. The Trump administration is now urging PJM to run an emergency-style auction for long term contracts, a move it says is needed to avoid rolling blackouts as data demand soars.
The White House’s emergency ask for PJM
The White House has framed its intervention as a response to a looming reliability crunch, not a routine policy tweak. Officials say rapid data center growth is driving unprecedented demand on PJM’s system, and they want the grid operator to consider a one time auction that would lock in new generation for up to 15 years to head off potential rolling outages. In their view, the traditional capacity market is not bringing new plants online fast enough to match the pace of artificial intelligence and cloud expansion across the PJM footprint, which stretches across the mid Atlantic and parts of the Midwest.
According to reporting on the administration’s request, the White House has specifically asked PJM to explore an emergency power auction that would secure long term contracts from new resources and reduce the risk of rolling blackouts tied to data center load. A separate account notes that PJM is being pushed to weigh this special procurement alongside its normal planning process, underscoring how unusual it is for the federal government to lean so directly on a regional grid operator over a single class of customers.
Trump, governors and the push to make tech pay
President Donald Trump and a group of governors are not just worried about reliability, they are also trying to reset who pays for the new power plants that AI will require. The Trump administration and several state leaders have urged PJM to design the auction so that large technology companies, rather than residential ratepayers, shoulder most of the cost of new generation. Their argument is straightforward: if hyperscale data centers are driving the surge in demand, then the companies behind them should finance the infrastructure needed to serve that load.
In a letter described by multiple accounts, The Trump administration and several state governors on Friday urged PJM to run a special auction that would let tech companies bid on long term power contracts and, in effect, foot the bill for new plants instead of shifting costs to ratepayers. A separate report from Washington describes a bipartisan group of governors joining The Trump administration in calling for reforms in the largest electric grid in the country, including changes to how prices are set and how new plants serving AI demand are financed. Together, these accounts make clear that the White House is trying to channel public anger over rising bills into a political demand that Big Tech pay more of the tab.
How the proposed auction would work
At the center of the debate is a relatively simple concept with complex implications. The administration wants PJM to hold a one off auction that would award 15 year contracts to new power plants, with data center operators and other large tech firms bidding directly for that supply. Those contracts would give developers enough revenue certainty to finance construction, while also tying specific facilities to the data customers that need them. It is a departure from PJM’s usual capacity auctions, which spread costs broadly across all customers and typically rely on shorter commitments.
Reporting on the plan says the proposed auction would let tech firms bid on 15 year power contracts from newly constructed plants, an approach described in detail in one Bloomberg based account. Another report notes that The White House and 13 governors want the mid Atlantic grid operator to hold a power auction for tech companies to bid on 15 year contracts, describing the situation as a “massive, massive crisis,” a phrase cited in coverage of White House and its allies. In parallel, another account explains that the White House targets soaring data center power costs and that FOX Business correspondent Edward Lawrence has reported on how the administration wants the auction to make Big Tech pay for soaring energy costs, highlighting the political messaging around the design.
Market signal or binding shift in grid policy?
For all the urgency in the White House rhetoric, energy analysts are quick to point out that PJM is an independent operator with its own stakeholder process and that the administration’s request does not automatically change market rules. One analysis from Capstone described the proposal as lacking binding authority, reinforcing that this is policy signaling, not an imminent market redesign. In other words, the White House can lean on PJM, but it cannot unilaterally order an emergency auction, and any such move would still need to fit within Federal Energy Regulatory Commission oversight and PJM’s own rules.
That same analysis, cited in a second Capstone linked report, notes that the request highlights political pressure on PJM but does not change how the grid operator normally operates. From my perspective, that distinction matters: the administration is clearly trying to send a strong signal to both markets and voters that it wants Big Tech to pay for AI driven power demand, yet the actual mechanics of PJM’s capacity market remain intact unless and until its stakeholders and regulators agree to a new structure. The gap between rhetoric and regulatory reality will shape how seriously developers, utilities and data center operators treat the emergency auction concept in the months ahead.
Rising prices, AI demand and the politics of the grid
Behind the technical debate over auction formats is a more visceral concern for households and small businesses: electricity prices are already climbing faster than overall inflation, and AI is poised to push them higher. One account notes that electricity prices are rising at roughly double the overall inflation rate and cites a recent study by Carnegie Mellon University that examined the scale of Big Tech’s energy demand, details that appear in the same Carnegie linked coverage of the proposed auction. For a president who has made inflation a central political issue, tying AI power demand to rising bills and then promising to shift costs onto tech giants is a potent narrative.
At the same time, the administration is trying to frame the issue as a matter of fairness and national interest, not just partisan theater. One report describes how the White House targets soaring data center power costs and how Business coverage has highlighted Trump’s argument that Big Tech should “pick up the tab” for data centers. Another account notes that administration officials, including the Energy Secretary, have warned about reliability risks during high demand periods, as cited in the same Energy Secretary linked report. Taken together, the White House is betting that voters will see the emergency auction not as a technocratic tweak, but as a visible effort to protect them from both blackouts and higher bills in an AI driven economy.
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