The Trump administration and a bipartisan group of Mid-Atlantic and Midwest governors are urging PJM Interconnection, the largest electricity market in the United States, to hold an “emergency” power auction aimed at accelerating the construction of new power plants.

The proposal reflects mounting pressure on U.S. power grids as electricity demand rises sharply, driven in part by the rapid expansion of AI data centers. At the same time, public frustration is growing over rising electricity rates, placing lawmakers and technology companies under increasing scrutiny.

Federal officials and governors are calling on PJM to organize a special power auction allowing companies to procure electricity through 15-year contracts. Supporters argue that longer contracts would make it easier to finance and build new power plants by guaranteeing steady revenue over a longer period.

The administration also says the auction would reduce grid connection requests, particularly from data center developers that seek access to electricity without committing to long-term power generation or infrastructure investments.

The push comes as power grids across the country struggle to keep up with rising electricity demand, driven in part by the rapid growth of AI workloads and large-scale data centers.

Federal officials have increasingly signaled that data centers should not shift infrastructure costs onto households. The Department of Energy (DOE) stated that data centers should “pay more for new generation than residential customers,” unless they bring their own power plants online or agree to reduce energy use during periods of grid stress. The DOE estimates that the proposed emergency auction could drive as much as $15 billion in new power generation investment by creating long-term revenue certainty for new projects.

Under the proposal, PJM would allocate a larger share of new infrastructure costs to data centers, a move aimed at protecting residential customers from higher electricity bills.

PJM Interconnection operates the largest electricity grid in the United States, serving more than 60 million people across 13 states in the Midwest and Mid-Atlantic regions, including Virginia, which hosts one of the world’s largest concentrations of data centers.

Governors from all PJM states signed onto the statement, including Pennsylvania Governor Josh Shapiro (D) and Maryland Governor Wes Moore (D), alongside Secretary of the Interior Doug Burgum and Secretary of Energy Chris Wright.

However, reporting from CNN and Bloomberg notes that neither the White House nor state governors have the authority to mandate such an auction, and that PJM was not invited to the announcement outlining the proposal.

The proposal also highlights broader tensions in U.S. energy policy. While the Trump administration has promoted a resurgence of coal, natural gas, and nuclear power, it has simultaneously taken steps that have slowed the expansion of wind and solar, which had been among the fastest-growing sources of new electricity in recent years.

Supporters of the emergency auction argue that expanding firm power generation is necessary to ensure grid reliability. Critics, however, warn that sidelining renewables could limit long-term flexibility and increase energy costs.

Q: What is PJM Interconnection?
A: PJM operates the largest wholesale electricity market in the United States, coordinating power supply across 13 states in the Midwest and Atlantic regions.

Q: Why are officials calling for an emergency auction?
A: They argue that rising electricity demand — particularly from AI data centers — requires faster construction of new power plants.

Q: Who would pay for the new power generation?
A: Federal officials say data centers should bear more of the cost unless they provide their own power or agree to reduce usage during shortages.

Q: Is PJM required to hold the auction?
A: No. PJM is not legally obligated to comply, and it was reportedly not involved in announcing the proposal.

Companies like Meta, Microsoft, and OpenAI have already outlined plans to fund their own energy infrastructure as they scale AI data centers — aiming to add new power generation and avoid shifting electricity and utility costs onto local communities.

However, the largest AI developers and technology companies represent only part of the broader data center ecosystem. Beyond the biggest firms, rising electricity demand is also coming from data centers that support cloud services, business IT operations, and developers seeking grid access without long-term power commitments. These facilities power everything from enterprise computing and content delivery to networking infrastructure — not just AI workloads.

The push for an emergency power auction comes as policymakers grapple with how to ensure that all data center developers — not just the most visible AI leaders — contribute to the energy systems required to support rising demand. Federal officials have increasingly signaled that residential customers should not bear the cost of new power generation driven by large-scale data center expansion.

For consumers, the outcome could directly affect electricity prices and grid reliability. For technology companies, it raises questions about whether voluntary infrastructure investments by leading firms will be sufficient — or whether formal market mechanisms are needed to address near-term capacity gaps and grid connection requests that lack firm long-term commitments.

As AI demand accelerates, the debate over the PJM auction highlights a broader transition already underway: energy policy is becoming a central factor in AI development. The timing suggests policymakers are moving to formalize expectations that leading AI companies have already begun to act on — even as long-term solutions like new nuclear generation remain years from completion.

As AI becomes more embedded in daily life, decisions about how its energy needs are funded will shape not just the future of technology, but the affordability and reliability of basic infrastructure that communities depend on.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.