Trump administration urges PJM reforms, shifting soaring electricity costs from consumers to tech companies building data centers

On Friday, state governors and the Trump administration urged PJM Interconnection, the largest power grid in the United States, to impose a fee on technology companies who build new electric generation plants because of the increased costs associated with the rapidly increasing electric needs created by artificial intelligence (AI) data centres. PJM provides service to over 65 million customers across 13 states and the District of Columbia (D.C.), including Northern Virginia which has the largest number of data centers in the world.

According to the administration, technology companies have committed to a $15 billion investment to help create new electric generation. The administration has also called on PJM to conduct an emergency capacity auction and place a cap on the existing plants’ capacity charges for the benefit of consumers. The announcement of this new plan was made by the Interior Secretary Doug Burgum and the Energy Secretary Chris Wright at the same time they made the announcement with the governors of Maryland, Pennsylvania and Virginia.

Electricity prices on PJM’s market have increased dramatically. Monitoring Analytics, PJM’s market monitor, estimates that the costs attributed to data centres will be $23 billion, calling it a “massive transfer of wealth” from consumers to utilities. PJM’s recent auction revealed a six-gigawatt shortfall for 2027, which is equivalent to the generation of six nuclear power plants.

In summary, while the goal of the administration’s plan is to shift costs to technology companies, PJM’s action on the plan and the impending reliability gaps will ultimately determine if consumers will receive any relief from the increasing costs of utility service.