Trump administration pushes PJM to force tech power funding

The Trump administration is pressuring PJM Interconnection, a Regional Transmission Organization covering 13 states in the Mid-Atlantic and the Midwest, to mandate that technology companies fund $15 billion worth of new power generation. Under the administration’s proposal, tech companies would be forced to pay for this new generating capacity through 15-year contracts, even if they do not need the capacity. PJM, which serves more than 65 million people and includes the data center hotspot of northern Virginia, is currently reviewing the administration’s “statement of principles.” However, the grid operator does not appear to be interested in the administration’s attempt to force its hand. Jeffrey Shields, a spokesman for PJM, told Bloomberg yesterday that the operator has little to say on the matter, adding, “We were not invited to the event they are apparently having tomorrow and we will not be there.”

The administration’s push comes as electricity rates in 2025 rose about 10% to 15% in the region compared with the year before. While demand from data centers is expected to increase nearly threefold over the next decade, current price hikes are largely driven by other factors. According to Monitoring Analytics, PJM’s independent market monitor, about 60% of 2025’s price increases are the result of high prices for fossil fuels. Over the last decade, PJM’s peak load has increased 10%, and it is expected to increase another 6.5% in 2027.

This shifting demand has put grid operators in a difficult position. Building traditional fossil fuel power plants is a multi-year process costing hundreds of millions of dollars, and many utilities are hesitant to commit to these long timelines. If the artificial intelligence boom cools, utilities risk being left with unprofitable, stranded assets. In contrast, technology companies have favored cheaper, modular renewable energy options like solar and batteries. A typical solar farm can be built in about 18 months and can deliver power in phases, allowing tech companies to manage risk on timelines that align with data center construction.

Why it matters

The Trump administration is pressuring grid operator PJM to force tech companies to fund new power generation capacity, potentially creating financial risk for utilities if the AI-driven demand for data centers does not materialize as expected.