By Amrith Ramkumar, Scott Patterson and Jennifer Hiller
WASHINGTON -- The Trump administration is planning to propose that the nation's largest power grid operator hold an emergency auction in which tech companies would bid to have new power plants built, according to people familiar with the matter.
The directive, expected Friday, would be an unprecedented attempt by the federal government to check rising electricity prices within PJM Interconnection, a 13-state power market spanning from New Jersey to Kentucky. The build-out of data centers there in response to the artificial-intelligence boom is straining the grid's capacity and has resulted in substantially higher costs in several of the grid operator's recent power auctions.
The emergency auction would allow tech companies to bid on 15-year contracts for new power plants in deals that would be worth billions of dollars, some of the people said. Bloomberg previously reported on the plans for the auction.
PJM, home to the largest concentration of data centers in the U.S., has come under strain in recent years as tech companies seek to connect even more of them to the grid. Power plants there have been going out of service faster than they can be replaced, which has put a squeeze on power supplies as more electricity-hungry facilities come online.
"I never want Americans to pay higher Electricity bills because of Data Centers," President Trump posted on social media earlier this week. He said the administration is working with U.S. technology companies on the issue and "will have much to announce in the coming weeks."
Trump praised a pledge by Microsoft to pay its own way on data centers. He has publicly embraced the AI boom at a time when locals across the country have been pushing back on data centers over their effects on electricity costs, among other complaints.
A bipartisan group of governors, including Josh Shapiro of Pennsylvania, Mike DeWine of Ohio and Glenn Youngkin of Virginia, will gather at the White House on Friday for a meeting. They plan to sign a "statement of principles" focused on getting more new energy generation onto the grid while addressing affordability, some of the people said.
The governors' agreement would include a two-year extension of a cap on PJM's capacity auctions, which are meant to ensure that enough power generation assets will be available at times of peak demand on the system, typically during especially hot or cold weather.
"Data centers should embrace it. They will pay their fair share," said Neil Chatterjee, former chairman of the Federal Energy Regulatory Commission, which is known as FERC and oversees wholesale power in the U.S. The move "addresses affordability and helps solve for capacity. I suspect there will be close to unanimous support amongst Republican and Democrat governors."
PJM's most recent auction in December reached the price cap and fell short of its target for surplus power supplies, a result that analysts expect to continue.
While high auction prices are meant to be a signal to the market to build new power generation, the process of permitting, engineering and constructing new power plants that can deliver electricity round-the-clock isn't usually a quick one. The supply chain for natural-gas-fired power plant equipment is also backlogged for years.
The move would be another effort by the administration to encourage data center operators to build their own generation. In October, Energy Secretary Chris Wright instructed FERC to draft new rules that would give it oversight of how giant data centers connect to the power grid. The process is typically overseen by states.
State regulators have pushed back, arguing that Wright's plan violates the 1935 Federal Power Act, which carves out the separation of oversight of the grid between state and federal governments.
By overseeing how data centers hook up to the grid, federal regulators could make it easier and faster for them to construct their own power supply, administration officials have argued. They have said the rule could turbocharge data center growth as AI giants such as Google, Amazon, Meta and OpenAI tap their deep war chests to build power plants and potentially help solve supply-chain bottlenecks that have slowed growth of new generation capacity.
Across the country, regulators and utility officials are debating with tech companies how much they should have to pay for the massive infrastructure investments needed to support the number of data centers seeking to connect to the grid.
The idea that new data centers will need to adopt a "bring your own power" mantra has taken hold across much of the country already. Some of the largest projects under construction in places that include West Texas, Ohio and Tennessee, have plans to use on-site power either permanently or until grid infrastructure can catch up with the fast pace of data center construction.
The global race for AI dominance consumes far more power than earlier waves of cloud computing. A data center for AI training can devour as much electricity as 1,000 Walmart stores, while an AI search can use 10 times the amount of energy as a google search.
Some analysts say the impact of data centers on electricity prices has been overstated, noting that demand for other uses such as manufacturing and broad inflation have also boosted costs.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com, Scott Patterson at scott.patterson@wsj.com and Katherine Blunt at katherine.blunt@wsj.com
(END) Dow Jones Newswires
January 15, 2026 21:56 ET (02:56 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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