Trump, governors push emergency PJM auction to make tech fund new power plants
The White House and several governors urged PJM to hold a one-time auction forcing tech firms to buy 15-year power contracts, shifting costs off households and fast-tracking new generation.
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By Torontoer Staff
The Trump administration, joined by governors from several northeastern states, moved Friday to press the PJM Interconnection to hold an emergency wholesale electricity auction that would require major technology companies to finance new power plants through long-term contracts. The proposal calls for 15-year contracts that would guarantee revenue to generators, even if the buyers do not consume the contracted electricity.
Officials say the one-time auction would support about US$15 billion of new generation capacity, and would be aimed at short-circuiting rising retail electricity prices in the PJM region, which serves more than 67 million people from the Mid-Atlantic to the Midwest and includes the world’s largest concentration of data centres in northern Virginia.
How the auction would work
The White House and participating governors plan to ask PJM to run a reliability backstop auction that differs from the grid operator’s usual short-term procurements. Rather than 12-month contracts, the emergency sale would award 15-year agreements, with staggered start dates for new plants. Bidders would be restricted to data-centre owners and operators, who would pay for capacity throughout the contract terms, providing steady revenues for developers.
A White House official, speaking on condition of anonymity, described the auction as a one-time intervention to address an acute mismatch between supply and demand in the PJM footprint and said the administration expects PJM to return to market fundamentals after the capacity gap is resolved.
Why the move now
Demand for electricity in PJM is rising quickly as hyperscale data campuses expand to support artificial intelligence work loads. PJM forecasts peak demand will increase roughly 17 per cent by 2030 from this year’s high. That growth, combined with plant retirements and market volatility, has been cited as a driver of record wholesale and retail price spikes in recent auctions.
Policymakers are under political pressure as residential electricity costs climb. The average U.S. retail price for electricity rose to a record 18.07 cents per kilowatt-hour in September, a 7.4 per cent increase, while residential prices were up about 10.5 per cent between January and August 2025, according to the National Energy Assistance Directors Association.
We don’t have a lot to say on this. We were not invited to the event they are apparently having tomorrow and we will not be there.
Jeffrey Shields, PJM spokesman
Reactions from market monitors and analysts
Independent monitors and energy analysts said the proposal would be a significant intervention in PJM’s market model, but that political pressure from the federal government and a bipartisan group of governors could prompt the grid operator to act even without a legal mandate.
It sounds like a significant improvement and a logical extension of bring-your-own new generation.
Joe Bowring, president, Monitoring Analytics LLC
While a 'statement of principles' doesn’t appear to include a legal mandate for PJM to act, pressure from the Trump administration and a bipartisan coalition of PJM states is very likely to motivate a considerable response.
Timothy Fox, ClearView Energy Partners
Who stands to gain, and who could lose
Supporters say the auction would de-risk investment in new generation, speeding construction of natural gas plants and potentially incentivising nuclear projects. The guaranteed revenues would also reduce the market’s exposure to bankruptcies and sudden supply exits, a recurring problem in recent years.
- Large hyperscalers such as Amazon, Google and Microsoft could benefit by securing reliable supply and predictable costs.
- Smaller AI infrastructure firms may face squeezed margins if they cannot pass higher power costs to customers.
- Faster build-out of gas and possibly nuclear generation could lock in fossil fuel use unless paired with clean-energy requirements.
- State-level assignments of costs to data centres aim to prevent households from bearing the new plants’ price tags.
If they have to pay more for electricity, their margins will get squeezed.
Gil Luria, analyst, DA Davidson & Co.
Process, timing and open questions
The administration and the governors will present a non-binding statement of principles, endorsed by the National Energy Dominance Council and governors including Pennsylvania’s Josh Shapiro and Maryland’s Wes Moore. The statement is not a legal order, but officials say they have discussed the plan with PJM executives, state regulators, utilities, power developers, Wall Street and the hyperscalers.
Officials urged PJM to hold the emergency auction by the end of September. PJM’s market rules and federal and state regulatory frameworks will determine whether and how the operator can adopt the proposal. The grid operator’s recent auctions have sometimes missed targets, including a December sale that fell about 6.6 gigawatts short of projected needs, a shortfall PJM attributed in part to rapid data-centre development.
PJM’s position remains uncertain. The operator declined to participate in the White House event and has offered limited comment, signalling potential legal and technical hurdles ahead for any immediate change to its market design.
The plan could serve as a model for other regions facing similar strains from AI-driven data-centre growth, but it also raises questions about competitive effects, the distribution of costs among users, and long-term energy policy choices.
President Trump reiterated the administration’s stance on social media, writing that big technology firms must 'pay their own way' so Americans do not face higher electricity bills because of data centres.
The White House did not immediately provide further comment, and a senior administration official who briefed reporters requested anonymity to describe the proposal in detail.
For now, the plan remains a politically backed push to change market outcomes quickly. Whether PJM, regulators and the broader market will accept the changes, and how the costs will be distributed across large and small firms and customers, will determine the proposal’s ultimate impact.
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