The Trump administration is pushing for a major expansion of the country’s largest electricity grid — and it wants Big Tech to help foot the bill, even if the companies don’t end up needing the extra power.
The proposal centers on PJM Interconnection, the grid operator that serves 13 states across the Mid-Atlantic and Midwest, including Northern Virginia, which has become the biggest U.S. hotspot for data centers. The White House, along with governors in the region, wants PJM to run an auction for 15-year contracts that would bring roughly $15 billion worth of new generating capacity onto the grid. The unusual part is the administration’s request that tech companies bid on those contracts even if they aren’t sure they’ll use the electricity for their own facilities.
The idea is clearly driven by one thing: data center demand. Power consumption from data centers is expected to nearly triple over the next decade, and a big portion of that surge is tied to AI workloads. After years of essentially flat electricity growth, grid operators are now trying to plan for a future where massive computing clusters could reshape demand almost overnight.
But PJM doesn’t seem thrilled about being dragged into a political announcement. The administration’s “statement of principles” is nonbinding, and PJM has been publicly restrained in its response. A spokesperson told Bloomberg the grid operator wasn’t even invited to the event where the plan was being discussed — and said PJM won’t be attending. For now, PJM says it’s reviewing the proposal and plans to release the results of its own long-term planning process soon.
Meanwhile, the region is already feeling the strain. Electricity rates in PJM territory were up about 10% to 15% in 2025 compared with the year before. Demand hasn’t exploded yet — PJM’s peak load has risen about 10% over the last decade and is projected to grow another 6.5% by 2027 — but the trajectory is moving in the wrong direction for a grid that’s already getting more expensive to operate.
And it’s not just data centers pushing prices higher. PJM relies heavily on natural gas, and fuel costs have jumped. PJM’s independent watchdog, Monitoring Analytics, estimates that roughly 60% of the 2025 price increases were driven by higher fossil fuel prices.
That creates a real bind for grid planners. Building new power plants — especially gas plants — takes years and costs hundreds of millions of dollars. Utilities don’t want to commit to long timelines and massive investments if the AI boom cools off, because they could be stuck with expensive assets that need to run for decades to make financial sense.
Tech companies, for their part, have generally tried to solve the problem in a different way. Instead of backing large fossil fuel builds, they’ve leaned into renewables like solar and battery storage, which are cheaper, faster to deploy, and easier to scale in phases. A solar project can often be built in about 18 months, and it can start delivering power before it’s fully finished — a timeline that fits better with how data centers are built and expanded.
The bigger picture here is that AI is forcing the electricity grid into the spotlight in a way it hasn’t been for years. As data centers ramp up, governments are starting to treat power generation as a strategic issue — and they’re increasingly willing to pressure the biggest tech companies to help pay for the infrastructure that makes the AI boom possible. Whether PJM and the industry go along with that plan is still an open question, but the direction of travel is clear: the era of “someone else will build the power” is ending fast.
This analysis is based on reporting from TechCrunch.
Image courtesy of Unsplash.
This article was generated with AI assistance and reviewed for accuracy and quality.
