Summary
- Companies
- Governors, Trump administration sign two-year price cap deal for future PJM power auction
- PJM grid covers 67 million people in 13 mid-Atlantic and inland states
- Rising power bills cause political backlash in PJM region(Reuters) – The White House on Friday urged the largest U.S. electric grid to conduct an emergency power auction to protect against rolling blackouts as energy demand from data centers grows faster than the country can build new generation plants.
The Trump administration initiative calls on PJM Interconnection, which serves 67 million customers in 13 states and Washington, D.C., to conduct an emergency procurement auction to address escalating electricity prices and growing reliability risks across the mid-Atlantic region of the United States.
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PJM later on Friday unveiled its own plan, which called for big data centers to voluntarily bring their own new generation or face the potential of having their power supply curtailed during peak demand periods. The grid operator also called for the creation of an accelerated interconnection track for state-sponsored generation projects.
At a White House event, U.S. Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum joined several state governors to discuss initiatives to speed the construction of more than $15 billion in new power generation on PJM, which has been criticized for being too slow to build a cushion against rotating blackouts as demand rises.
Rapid expansion of data centers to fuel things like artificial intelligence has stretched the resources of PJM and other regional U.S. electric grids. President Donald Trump is seeking to combat consumer price inflation that risks undermining support for Republicans ahead of November’s midterm elections.
The White House is seeking caps on the amount existing power plants can charge in the PJM capacity market. A recent PJM capacity market auction set record-high prices for power generators that were more than 800% higher than the previous year, increasing electricity prices for homes and businesses.
The agreement would also require data centers to pay for the new generation built on their behalf – whether they show up and use the power or not – rather than buying up existing power. The concept is called BYOG, or “bring your own generation.”
PJM said it is reviewing the principles set forth by the White House and governors. PJM was not invited to the event, a PJM spokesperson told Reuters.
PJM has forecast that the grid’s peak usage in the summer will climb by about 70 gigawatts to 220 gigawatts over the next 15 years. The record summer peak for PJM was 165 gigawatts in 2006.
Since 2023, PJM says it has processed more than 170 gigawatts of new generation requests. Nearly 60 gigawatts of projects have completed PJM’s study process and have either signed or been offered generation interconnection agreements.
RISING POWER BILLS HAVE LED TO BACKLASH
Rising power bills in PJM’s region have led to a political backlash over the last year and threats by some governors to abandon the regional grid. Last summer, nine state governors wrote an open letter to the PJM board of managers criticizing the grid operator for not doing enough to address an escalating electricity affordability crisis.
“Unfortunately, what we have seen in our region is that PJM has been too damn slow to let new generation onto the grid at a time where energy demand is going up,” Pennsylvania Governor Josh Shapiro said at the White House event on Friday.
Burgum said PJM has been lucky so far in avoiding widespread blackouts.
Reporting by Jarrett Renshaw in Philadelphia, Tim McLaughlin in New York and Timothy Gardner in Washington; Editing by Liz Hampton and Matthew Lewis
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