By Ginika Igboke
The Trump administration joined forces with a bipartisan group of mid-Atlantic governors on Jan. 16 to call for an emergency power auction and policy reforms aimed at lowering electricity prices within the nation’s largest power grid.
The proposal centers on a special power auction in which energy companies would bid on 15-year contracts to build new electricity generation capacity. The goal is to accelerate construction of new power plants capable of meeting rapidly growing demand, particularly from data centers supporting artificial intelligence technologies.
Federal and state officials are urging PJM Interconnection—the regional transmission organization that manages electricity for Washington, D.C., and 13 East Coast and Midwest states—to overhaul its policies so consumers are not burdened with higher costs tied to new generation projects. The concerns are especially acute as energy demand surges from large-scale data centers needed to power AI development.
Discussions on Friday focused on how to fast-track more than $15 billion in new power generation projects while ensuring grid reliability and affordability for households and businesses.
Energy Secretary Chris Wright and Interior Secretary Doug Burgum were joined at a White House event by Govs. Glenn Youngkin of Virginia, Mike DeWine of Ohio, Josh Shapiro of Pennsylvania, and Wes Moore of Maryland. Together, they signed a “Statement of Principles” outlining shared goals for grid reliability, cost control, and energy expansion. Governors from the remaining PJM-served states have also signed on to the initiative.
“High electricity prices are a choice,” Wright said in a statement. He argued that the closure of coal and natural gas plants without dependable replacements in recent years left the country vulnerable to shortages and price spikes. “Perhaps no region in America is more at risk than PJM,” he added.
PJM Interconnection said in a statement that its board is already developing plans to integrate new data centers into the grid while maintaining reliable service for the approximately 67 million people it serves. The grid operator outlined a package of 12 proposals, some of which would be filed directly with the Federal Energy Regulatory Commission, while others could be implemented immediately.
Those proposals include improved forecasting of electricity demand, the rapid launch of new generation procurement to address short-term reliability needs, a greater role for state governments in decision-making, and a comprehensive review of PJM’s market rules.
“This is not a yes-or-no question about data centers,” said PJM Board Chair, Interim President, and CEO David Mills. “It’s about how we can accommodate growth while keeping the lights on and recognizing the impact on consumers at the same time.”
President Trump declared a National Energy Emergency shortly after taking office, warning that blackouts and rising electricity prices could result from earlier energy policies. In a recent social media post, Trump said he supports the growth of data centers critical to AI leadership but insists that technology companies shoulder the associated costs.
“I never want Americans to pay higher electricity bills because of data centers,” Trump wrote. “Data centers are key to our leadership in AI and national security, but the big technology companies who build them must pay their own way.”
Under the framework announced Friday, lawmakers are urging PJM to adopt policies that require data center developers to directly fund the new power generation built on their behalf. The plan also includes a proposed two-year price cap for future PJM capacity auctions to limit rate increases for consumers.
Burgum said the initiative is designed to ensure that the cost of powering AI-driven growth falls on technology companies rather than taxpayers or ratepayers.
Pennsylvania Gov. Josh Shapiro highlighted his state’s prior legal action against PJM, noting that he sued the grid operator in 2024 over what he described as unjustified price increases. That lawsuit resulted in a negotiated price cap, which Shapiro said he insisted be extended as a condition of his participation in Friday’s agreement.
PJM said it will seek additional feedback from stakeholders before deciding whether to extend its existing price floor or ceiling. If the proposed policies are implemented, Shapiro said the extended price cap could save approximately $27 billion for the 67 million customers served by PJM over the next two years.
“For two years, I’ve been sounding the alarm that without fundamental changes, consumers were going to pay more and get nothing in return,” Shapiro said. “I’m glad the White House is now adopting the solutions we’ve been pushing.”
The initiative comes as PJM considers revised rules for its 2028–2029 capacity auction, scheduled for June. Administration officials say the outcome of those reforms will play a major role in determining whether the United States can meet future energy needs while remaining competitive in the global AI race.
According to the Energy Department, accelerating construction of large, reliable power plants and ensuring around-the-clock electricity supply are central to Trump’s energy agenda—and to sustaining America’s technological leadership in the years ahead.
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