The Trump administration unveiled a plan at the White House on Friday that would require big tech companies to pay for the construction of new power generation in the region managed by PJM Interconnection, the largest U.S. grid operator, serving 67M customers in 13 states and Washington, D.C.
Secretary of Energy Wright and Secretary of the Interior Burgum were joined by governors from Pennsylvania, Maryland, and Virginia to outline a new plan that would require PJM to undertake an emergency wholesale electricity auction to address escalating electricity prices and growing reliability risks, as energy demand from data centers grows faster than the U.S. can build new generation plants.
The plan would require PJM to hold a power auction for tech companies and other big customers that have not built their own power to bid for 15-year contracts for supply from new power plants; deals would be worth at least $15B.
The agreement seeks 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.
The plan also would require data centers to pay for the new generation built on their behalf – whether or not they show up and use the power – rather than buying up existing power.
PJM also announced 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.
Rising power bills in PJM’s region have led to a political backlash and threats by some governors to abandon the regional grid; Pennsylvania’s Governor Shapiro, who was at the event, warned that if PJM does not change, the state would be “forced to go its own,” pointing out that the state is the second-largest U.S. net energy exporter.
“While a ‘statement of principles’ doesn’t appear to include a legal mandate for PJM to act, pressure from the Trump administration and a bipartisan coalition of PJM states is very likely to motivate a considerable response,” ClearView Energy Partners analyst Timothy Fox told Bloomberg.
Shares of power generators fell sharply on Friday: Talen Energy (TLN) -11.3%, Constellation Energy (CEG) -9.8%, Vistra (VST) -7.5%, NRG Energy (NRG) -4.1%.
Companies that make energy equipment that could benefit from new demand also gained, including GE Vernova (GEV), Quanta Services (PWR) and Vertiv (VRT), ended +6.1%, +4.3% and +2.5%, respectively.
Bitcoin miners that have expanded to AI also pushed higher on Friday, including Riot Platforms (RIOT) +16%, Iren (IREN) +11.5%, Cipher Mining (CIFR) +7.3%, MARA Holdings (MARA) +6.5%, CleanSpark (CLSK) +5%.