The explosive growth of artificial intelligence (AI) has also led to explosive growth in electricity demand. Infrastructure is straining under the weight of that demand, and nowhere is the strain more visible than in the PJM Interconnection region.
Data centers supporting AI workloads are driving unprecedented power needs, colliding with grid limitations and pushing the cost of backup generation sharply higher.
PJM, a regional transmission organization, operates the nation’s largest wholesale power market across the Mid-Atlantic and parts of the Midwest. It has become a focal point over who should bear the cost of keeping the lights on.
PJM serves all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia, according to its website.
PYMNTS has followed the intersection of data center expansion and energy infrastructure. Hyperscalers such as Google and Meta are committing billions of dollars to AI investments, including projects tied to the PJM footprint. We have also reported on federal efforts to accelerate grid connections for data centers, alongside growing pressure on operators to secure dedicated power supplies, including long-term nuclear and other generation agreements.
That context is critical to understanding why electricity pricing in PJM has moved from a technical market issue to a national policy concern.
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Washington Steps In on Who Pays
According to reporting this week, President Donald Trump is escalating pressure on PJM to prevent the AI-driven data center boom from pushing costs onto residential customers. The White House, joined by a bipartisan group of governors from PJM states, is backing an emergency plan designed to redirect the financial burden of new power plants away from consumers.
The Wall Street Journal detailed that the proposal would create a parallel financing mechanism: a special emergency auction offering 15-year contracts for new generation. Under that model, technology companies and other large power users that have not built their own supply would be required to pay for the new capacity. The Journal said the contracts could total at least $15 billion and would be paired with a two-year extension of a price cap in PJM’s capacity auctions, aimed at limiting near-term rate impacts.
At a White House event attended by governors from PJM states, Energy Secretary Chris Wright framed the initiative as both an affordability and reliability measure.
“Our directives will restore affordable and reliable electricity so American families thrive and America’s manufacturing industries once again boom,” Wright said, according to the Journal.
Markets React, Signals Emerge
The policy shift immediately rippled through financial markets. The Journal reported that shares of GE Vernova, a major gas-turbine manufacturer, rose more than 7%, reflecting expectations of increased demand for new generation equipment. At the same time, shares of power producers including NRG Energy, Vistra, Talen Energy and Constellation Energy fell sharply, as investors weighed the implications of new cost-allocation rules.
Those moves underscored how sensitive the power sector is to changes in capacity market design, especially when driven by political intervention rather than gradual regulatory reform.
Emergency Auctions and Long-Term Obligations
Bloomberg reported earlier that the administration’s plan centers on a one-time reliability “backstop” auction limited to data center owners and operators. Under that approach, contracts would support a rapid build-out of new power plants, with large customers obligated to pay for the capacity over the full term, whether or not they ultimately use the electricity.
Bloomberg noted that officials are positioning the effort as an emergency measure rather than a permanent overhaul of PJM’s market structure. The initiative is tied to a statement of principles signed by Trump’s National Energy Dominance Council and governors in states including Pennsylvania, Ohio and Virginia.
A Broader Read-Across for the Digital Economy
The PJM debate highlights a critical dependency often taken for granted: reliable, affordable power.
As data centers become foundational infrastructure for the digital economy, touching everything from digital payment to AI-driven financial services, electricity pricing and grid capacity are emerging as strategic variables, not just utility issues. The fight over PJM rate shocks signals that as AI adoption accelerates, questions about who pays for the underlying infrastructure will only intensify.
