The Donald Trump administration will reportedly propose that PJM Interconnection, the largest power grid operator in the U.S., hold an emergency auction allowing tech giants and hyperscalers to bid on 15-year contracts for building new power plants.
The grid spans 13 states across the mid-Atlantic, Midwest, and South, including northern Virginia.
The directive is expected to be signed on Friday at the White House by the National Energy Dominance Council in the presence of Josh Shapiro, Governor of Pennsylvania, Mike DeWine, Governor of Ohio and Glenn Youngkin, Governor of Virginia, and a few other governors, reported Bloomberg on Thursday.
If PJM proceeds with the plan, it could lead to the construction of new power plants worth up to $15 billion, according to the report.
Trump Pressure Comes Amid Surging Electricity Bills
This report comes in the wake of Microsoft Corp. (NASDAQ:MSFT) pledging necessary measures to pay for its part of the electricity cost in the grid in a “community-first” approach, earlier this week.
The tech giant stated that it would collaborate with local utilities to ensure residents do not have to bear higher electricity costs due to its data centers. Microsoft also vowed to create employment opportunities in the area and minimize water usage.
Trump Calls On Big Tech To Reduce Burden
This move by Microsoft was a result of Trump’s pressure on big tech to stop burdening Americans with high electricity costs due to the proliferation of data centers, a critical part of the AI boom. While Trump stated that he wanted the U.S. to lead in the AI game, he also called for the tech companies to pay for data center power bills.
Rick Pederson, Vice Chairman and Chief Strategy Officer at Bow River Capital, told Benzinga in an email statement that “AI revolution can afford additional cost.”
Besides the PJM stretch, new data center investments may shift to states like Texas, Oklahoma, or North Dakota with lower costs and quicker interconnections and “less transactional friction”, stated Pederson.
Meanwhile, Marsden Hanna, the Global Head of Sustainability and Climate Policy at Alphabet Inc.‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google, stated that transmission barriers and waiting time from grid connection are the biggest hurdles to data center expansion.
Notably, in July, Google announced a $25 billion investment in data centers and AI infrastructure across the PJM grid.
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