US Politics
White House and governors join together to push nation’s largest grid operator to lower prices
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The White House and a bipartisan group of governors joined forces Friday to call on the nation’s largest regional grid operator, PJM Interconnection, to hold an emergency power auction for tech companies – seeking to quell concerns about rising costs associated with data centers.
Energy Secretary Chris Wright, Interior Secretary Doug Burgum and a group of 13 governors unveiled the proposed principles, suggesting PJM hold the auction to allow tech companies to bid on 15-year contracts for electricity from new power plants at a capped cost.
In return, the tech companies would pay for the new generation of power plants – whether they use the electricity it provides or not.
Grid operators, such as PJM, hold yearly auctions where utility companies bid on how much electricity they can provide at a specific price. Most recently, PJM held an auction in December. But it’s unusual to hold an emergency auction and to offer a 15-year contract.
The bipartisan push arrives as voters express growing concern over energy costs skyrocketing due to tech companies’ data centers over-utilizing energy.
Over the last five years, energy utilization has risen in the U.S. – as well as energy costs.
President Donald Trump has made lowering energy costs a priority of his administration, declaring a “National Energy Emergency” on his first day in office and largely blaming renewable energy for driving up the costs.
But experts say multiple factors contribute to the problem, such as environmental challenges, aging power plants or natural gasline infrastructure, as well as new data centers utilizing large amounts of energy. But another major factor is how grid operators handle supply and prices.
The bipartisan group of governors includes Pennsylvania Governor Josh Shapiro, who has feuded with PJM for being “too damn slow” to introduce new power generation.
Under the new principles with PJM, which provides energy to 67 million people, the White House suggested it could bring $15 billion of new power online.
PJM told Reuters it was reviewing the principles. The company was not invited to Friday’s event.
Trump teased the new initiative earlier this week in a Truth Social post in which he said that tech companies, such as Microsoft, were working with the administration “to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption.”
