Amid voter anger over soaring electricity costs and the tech industry’s data centers driving them higher, a bipartisan coalition of governors joined the White House on Friday to hatch a plan aimed at protecting everyday ratepayers.
The proposal, announced at a bipartisan White House meeting that included potential future Democratic presidential contenders Pennsylvania Gov. Josh Shapiro and Maryland Gov. Wes Moore, would push tech companies to fund their own power generation. It calls on operators of the 13-state power grid that stretches from North Carolina to Ohio to change its rules so that the firms bid for their own contracts to covering their power needs at the peak periods when the grid is under the most stress.
“We need more energy on the grid and we need it fast,” Shapiro said. He accused the regional grid operator, PJM Interconnection, of being “too damn slow” to bring new power generation online as demand is surging.
Shapiro said the agreement could save the 65 million Americans reliant on that grid $27 billion over the next several years. He warned Pennsylvania would leave the PJM market if the grid operator does not align with the agreement, a departure that would threaten to create even steeper price challenges for the region.
Underneath the bipartisan fanfare, the Republicans sought to shift blame for surging prices away from tech companies and toward the Biden administration’s investments in solar and wind power. Energy Secretary Chris Wright said at the meeting that prioritizing green energy has driven up power costs without meaningfully reducing greenhouse gases.
Many energy experts question those claims, noting that wind and solar power generate some of the cheapestelectricity available and construction of new gas plants the tech companies are seeking is a major factor in projections for further spiraling residential utility bills.
“If these principles were adopted, you would no longer be able make a political statement that an data center is driving up the prices for consumers, because they won’t be,” Interior Secretary Doug Burgum said. “The tech companies willingness to build and build quickly and to bring more power onto the grid when the bureaucrats and the bureaucratic system was holding that up. They’re clearly part of the solution here.”
Environmentalists were critical of the deal, however, warning it will likely enable tech firms and utilities to fast track more gas generation as hundreds of clean energy projects seeking to patch into the power grid are left to languish
At the event, officials across the political spectrum agreed that the region urgently needs to make it easier to build new power generation to keep up with growing demand.
Data center developers were not at the White House. But Virginia Gov. Glenn Youngkin (R), at the meeting on his last day in office, said the companies were on board with sharing the costs because they need reliable power.
The Edison Electric Institute, which represents the major utilities on the PJM grid, says it supports the new plan. The power grid operator issued a more cautious reaction, saying that it “is reviewing the principles set forth by the White House and governors.”
“The PJM Board’s decision, resulting from a multi-month stakeholder process on integrating large load additions, will be released later today,” the statement said. “The Board has been deliberating on this issue since the end of that stakeholder process. We will work with our stakeholders to assess how the White House directive aligns with the Board’s decision.”
The plan calls for tech companies that don’t bankroll their own new power to agree to go offline at times the grid is under stress, according the Energy Department.
The White House has identified affordability as a priority issue in this year’s midterms, with recent polls showing Americans think President Donald Trump hasn’t done enough to deliver on his campaign promises to bring down prices. President Donald Trump repeatedly emphasized rising electricity prices specifically in last November’s gubernatorial elections in Virginia and New Jersey, which saw decisive Democratic victories.
“Data centers have been driving up costs for mom and pop retail consumers,” said Abraham Silverman, a energy scholar at Johns Hopkins University. “It is not politically sustainable for the data centers or the utilities. It is quite clear something needs to happen.”
But he cautioned that the plan unveiled Friday is not necessarily a cure all. Energy markets and infrastructure are complicated and often unpredictable, tweaking one part of the system can disrupt other parts, leading to unanticipated fallout.
“The question is whether the cure will be worse than the disease,” he said.
The proposal comes as the proliferation of the giant computing centers triggers angry backlash in many communities— with electricity prices a focal point of the tension.
At the same time, the Trump administration and some of the governors have been pushing and promoting the growth of AI infrastructure in a bid to spur the economy and win the tech innovation race against China. It is grappling with managing the needs of the tech industry with increasingly irritated everyday ratepayers.
White House executive orders aiming to fast track permitting and construction of these computing warehouses that can consume more power than all the households in large metropolitan regions have not been well received even in some Trump strongholds.
It has lead some prominent lawmakers to begin calling for a moratorium on new data centers and the launch of congressional investigations and legislative proposals targeted at the tech industry’s role in rising costs for everyday voters. The issue cuts across party lines, with voters in communities in deep red states expressing anger along with advocacy groups on the left. The data center backlash is emerging as such affordability concerns take center stage in upcoming midterm elections.
Friday’s announcement does not include a binding policy, but guidelines meant to nudge federal regulators and PJM to create rules that would push data center companies to bankroll the expansive energy infrastructure needed to power their operations. It comes in the backdrop of research showing that the data centers are a key reason behind spiraling costs of the electricity PJM secures at its capacity auctions, when the grid operator locks down contracts to ensure it has enough generation to avoid blackouts at times of peak demand.
The cost of those contracts is rising rapidly because of data centers, according to a report from the independent market monitor at PJM, and advocacy groups and scholars have warned that they threaten to quickly push the bills of everyday consumers up by hundreds of dollars a year if left unchecked.
The proposal unveiled Friday would create a carve out through which tech firms building new data centers would secure their own 15-year contracts at an emergency auction later this year. Ostensibly, the costs of obtaining those contracts through existing plants would be so high for them that it will spur them to fund construction of new power generation specifically for their data centers.
“The driving force here is to protect consumers,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard. “These markets can be complicated. How this works out is hard to say.”
Experts caution that the proposal is merely a bridge to buy time to fix underlying market, permitting and supply chain challenges with the power grid that delay construction of new plants and drive the nation’s power crunch.
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