The Trump administration is preparing to drop a bombshell on Big Tech's energy problem. According to a Bloomberg report Thursday, the White House plans to direct PJM Interconnection—the country's largest power grid operator—to hold an emergency auction where tech giants and hyperscalers would bid on 15-year contracts to finance new power plant construction.
PJM's grid stretches across 13 states throughout the mid-Atlantic, Midwest, and South, including the data center hub of northern Virginia.
The National Energy Dominance Council is expected to sign the directive Friday at the White House, with Pennsylvania Governor Josh Shapiro, Ohio Governor Mike DeWine, Virginia Governor Glenn Youngkin, and several other governors in attendance.
If PJM moves forward with the proposal, it could unleash construction of new power plants worth up to $15 billion.
The Electricity Bill Problem Gets Real
This isn't happening in a vacuum. Microsoft Corp. (MSFT) just pledged earlier this week to pay its share of electricity costs in what it called a "community-first" approach. The tech giant committed to working with local utilities to ensure residents don't get stuck with higher electricity bills because of its data centers. Microsoft also promised to create local jobs and reduce water consumption.
Trump's Message: You Built It, You Pay For It
Microsoft's move came directly after Trump pressured Big Tech to stop passing along the cost burden of data centers to everyday Americans. Data centers are the backbone of the AI boom, and they're power-hungry beasts. Trump has been clear that he wants the U.S. to dominate AI, but he's equally clear that tech companies need to foot their own power bills.
Rick Pederson, Vice Chairman and Chief Strategy Officer at Bow River Capital, told MarketDash in an email that the "AI revolution can afford additional cost."
Beyond the PJM territory, Pederson suggested that new data center investments might migrate to states like Texas, Oklahoma, or North Dakota, where costs are lower, grid connections happen faster, and there's "less transactional friction."
Meanwhile, Marsden Hanna, Global Head of Sustainability and Climate Policy at Alphabet Inc.'s (GOOGL) (GOOG) Google, identified transmission barriers and grid connection wait times as the biggest obstacles to data center expansion.
Worth noting: Google announced a massive $25 billion investment last July in data centers and AI infrastructure across the PJM grid. That kind of commitment makes the Trump administration's proposed auction all the more relevant.
