Trump, governors push tech companies to pay for rising power costs

Driving the news: Administration officials and the governors of Pennsylvania, Ohio, Virginia and other states are urging grid operator PJM Interconnection to hold an emergency auction for tech companies to bid on 15-year contracts for new electricity generation capacity.

• The plan seeks to speed construction of new plants — especially natural gas ones dispensing round-the-clock electricity — needed to supply data centers.
• At the same time, it aims to douse the political flames over who should pay the costs of surging electricity demand.
• "We are addressing serious market failures in PJM," the administration said in a fact sheet, citing "energy subtraction policies that forced the shutdown of power plants in PJM that were needed for grid resource adequacy, reliability and stability."

The grid operator serves more than 67 million people from the Mid-Atlantic to the Midwest. It wasn't invited to Friday's event with the administration and governors.

• Instead, PJM issued a statement later Friday about a series of steps its board developed to integrate data centers and other large electricity-load additions to the grid. Among them was an "immediate initiation" of plans to secure more power supplies.
• Other steps included "significant load-forecasting improvements and [an] increased role for states" as well as finding ways for new large power users to bring their own new generation or enter into a connect-and-manage framework.
• They also included creating "an accelerated interconnection track" for state-sponsored generation projects and immediately starting a backstop generation procurement process to address short-term reliability needs.

"This is not a yes/no to data centers," PJM Board Chair and Interim President and CEO David Mills said in a statement. "This is, 'How can we do this while keeping the lights on and recognizing the impact on consumers at the same time?'

What they're saying: "Under President Trump's leadership, the administration is leading a unprecedented bipartisan effort urging PJM to fix the energy subtraction failures of the past, prevent price increases, and reduce the risk of blackouts," White House spokeswoman Taylor Rogers said.

• Rogers said the plan "would deliver much-needed, long-term relief to the Mid-Atlantic region."
• Electricity analyst Rob Gramlich, president of Grid Strategies LLC, said it isn't clear "how this new program would actually work or fit into existing electric industry structure and state and federal law and regulations."
• It could require "significant changes to federal and/or state law," he added.

Zoom in: The Edison Electric Institute, which represents investor-owned utilities, said in a statement it supports the governors' and administration's efforts.

• "We look forward to working with FERC and the state commissions to be part of the solution," CEO Drew Maloney said in a statement.

The other side: Advanced Energy United, which represents energy companies and corporate buyers across clean-energy sectors, said the approach doesn't address core challenges such as making PJM's grid-connection process more efficient.

• "The line for energy projects to connect to the power grid in the Mid-Atlantic has basically had a 'closed for maintenance' sign up for nearly four years now, and this proposal does nothing to fix that — or any of the other market and planning reforms that are long overdue," Jon Gordon, the group's director, said in a statement.
• "More short-term Band-Aid remedies aren't a substitute for durable fixes."

Jigar Shah, who led the Energy Department's loan programs office during the Biden administration, also said in an X post that the administration should abandon its fossil fuel-centric approach to achieve its goals.

• He noted that wind and solar projects — which can provide battery power when the sun isn't shining or the wind blowing — are what have been added most quickly to the grid.
• "Only way to direct data centers to do something that would reduce electricity rates, solve speed to power this year is to deploy batteries," Shah said.

Maria Curi contributed reporting.

Editor's note: This story has been updated with details on PJM's announcement of its plans.