Trump Moves to Have Tech Giants Pay for Surging Power Costs
•January 16, 2026
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Companies Mentioned
Why It Matters
By shifting the cost of new generation onto data‑center owners, the initiative seeks to curb rising residential electricity bills and stabilize supply for AI‑driven workloads, reshaping the economics of the U.S. power market.
Key Takeaways
- •Emergency auction targets $15B new power capacity
- •Tech firms pay for 15‑year generation contracts
- •PJM to hold auction by September end
- •GE Vernova shares rise; independents fall
- •Smaller AI providers risk higher electricity costs
Pulse Analysis
The surge in artificial‑intelligence workloads has turned data centers into power‑hungry behemoths, especially across PJM’s Mid‑Atlantic footprint. As demand is projected to rise 17 % by 2030, the region faces a supply gap that threatens both grid reliability and consumer rates. By convening an emergency reliability‑backstop auction, the Trump administration and a bipartisan coalition of governors hope to fast‑track new generation—primarily natural‑gas turbines and potentially nuclear—directly financed by the hyperscalers that need the power. This approach mirrors earlier capacity‑market mechanisms but extends contract terms to fifteen years, offering developers a predictable revenue stream in a historically volatile market.
For technology giants, the proposed contracts act as a hedge against spot‑price spikes that have already pushed U.S. retail electricity rates to record highs. Under the scheme, firms like Amazon, Microsoft, Alphabet, Meta and OpenAI would lock in long‑term pricing while shouldering the capital risk of plant construction, regardless of actual consumption. The financial model could improve balance‑sheet certainty for these companies, yet it also transfers cost risk to smaller AI service providers that lack the scale to absorb price fluctuations. Market participants have already reacted: GE Vernova’s stock rallied on expectations of turbine orders, while independent power producers such as Vistra and Constellation saw shares tumble amid concerns about reduced competitive bidding.
Politically, the plan leverages a “statement of principles” to apply pressure without a binding mandate, signaling a rare alignment between a federal administration and state leaders on energy policy. If successful, the PJM auction could become a template for other regions grappling with data‑center‑driven demand, potentially reshaping how capacity markets address emerging technology loads. However, critics warn that earmarking costs for large hyperscalers may disadvantage smaller innovators and raise antitrust questions. The outcome will likely influence future regulatory debates on who should bear the infrastructure costs of the AI economy, while also testing the resilience of the U.S. power grid amid rapid digital transformation.
Trump Moves to Have Tech Giants Pay for Surging Power Costs
(Bloomberg) — President Donald Trump and the governors of several U.S. Northeastern states agreed to push for an emergency wholesale electricity auction that would compel technology companies to effectively fund new power plants.
The unprecedented plan, set to be announced Friday morning, seeks to address growing tensions over how the nation can supply electricity to power‑hungry data centers – seen as necessary to help win the global AI race – without simultaneously hiking utility bills for homes and businesses.
The Trump administration and some U.S. governors plan to direct grid operator PJM Interconnection LLC to hold an auction for tech companies to bid on 15‑year contracts for new electricity generation capacity.
If the auction proceeds as envisaged, tech giants would pay for power over the duration of the contracts, whether they use the electricity or not, providing secure revenues for years in a market notorious for price volatility and generator bankruptcies.
The auction would deliver contracts supporting the construction of some $15 billion worth of new power plants, said a White House official granted anonymity to detail the approach.
Still, representatives of PJM won’t be in attendance when the plan is laid out Friday.
“We don’t have a lot to say on this,” PJM spokesman Jeffrey Shields said by email. “We were not invited to the event they are apparently having tomorrow and we will not be there.”
In some ways, Trump is handing tech companies what they’ve been desperately seeking for the past three years: a massive supply of new electricity they can depend on when they energize the hundreds of billions of dollars in mega‑data centers now under construction. Amazon.com Inc., Microsoft Corp., Alphabet Inc., Meta Platforms Inc. and OpenAI have already collectively invested in the development of several gigawatts of new power – with a single gigawatt being enough to power roughly 750,000 homes at any given moment.
The White House didn’t immediately respond to requests for comment.
One of the biggest beneficiaries in reaction to the move was the maker of natural‑gas turbines GE Vernova Inc., which climbed as much as 7.6 % on Friday after Jefferies said it sees it as a winner from the auction. Shares of the largest independent power producers slid. Vistra Corp. declined as much as 9.5 %, Talen Energy Corp. slipped as much as 10.7 % and Constellation Energy Corp. dropped as much as 8 %.
The push by the administration and the governors – which will come in the form of a non‑binding “statement of principles” signed by Trump’s National Energy Dominance Council and the governors of Pennsylvania, Ohio, Virginia and other states – responds to growing concern about power demand far outpacing supply in the region managed by PJM.
The grid operator serves more than 67 million people from the Mid‑Atlantic to the Midwest. PJM is already home to the world’s biggest concentration of data centers, in northern Virginia. It expects peak demand across its system to jump 17 % by 2030 from this year’s high.
Trump has repeatedly described power plants being built alongside data centers, and on Monday, he doubled down on the idea, insisting in a social‑media post that the big technology companies that construct data centers must “pay their own way.”
“I never want Americans to pay higher electricity bills because of data centers,” Trump wrote in his post.
Cost‑of‑living concerns are already weighing heavily on Republicans’ bid to maintain control of the House and Senate in this November’s congressional elections. While Trump has stressed the plummeting cost of oil and gasoline since he took office last January, electricity prices have climbed due to rising demand – and there’s a building backlash against data centers that are fueling the surge.
The average U.S. retail price for electricity gained 7.4 % in September to a record 18.07 cents per kilowatt‑hour, the biggest gain since December 2023. Residential prices have jumped even higher, rising by 10.5 % between January and August 2025, marking one of the largest increases in more than a decade, according to the National Energy Assistance Directors Association.
Friday’s action is being cast as a one‑time emergency intervention into the PJM market, necessary because of the rapid rise in electricity prices in the Mid‑Atlantic region. The Trump administration and governors will urge the grid operator to return to market fundamentals after the acute problem is addressed, the White House official said.
The administration’s prescription for PJM is what’s known as a reliability backstop auction – something the grid operator already envisioned in the wake of repeated failed sales. But the administration and governors’ plan would mean holding the emergency auction right away after one clear failure – with unusual terms meant to foster a wave of rapid, new construction and the only bidders being data‑center owners and operators.
While PJM already holds auctions procuring electricity supplies, those are 12‑month periods. In the auction encouraged by Trump and the governors for 15‑year contracts, start‑up times for the new power plants are likely to be staggered. The White House and governors are urging PJM to hold the special one‑time auction by the end of September.
“It sounds like a significant improvement and a logical extension of bring‑your‑own new generation,” Joe Bowring, president of PJM’s independent watchdog Monitoring Analytics LLC, said in a telephone interview.
“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” from the grid operator, said Timothy Fox, an analyst with the research firm ClearView Energy Partners.
The plan could also fast‑track the development of natural‑gas generation and potentially nuclear plants by guaranteeing revenues – and profits – specifically to support data campuses needed to deploy artificial intelligence.
The approach could benefit larger tech companies at the expense of smaller firms. Amazon.com Inc., Alphabet Inc.’s Google and Microsoft Corp. are less exposed to electricity price fluctuations since they can pass those costs on to customers, said Gil Luria, analyst at DA Davidson & Co. However, dozens of smaller companies, including Nebius and CoreWeave that offer artificial‑intelligence infrastructure to cloud‑computing companies on multi‑year contracts, could be more exposed to big price swings since they are on the hook to absorb higher electricity costs, he said.
“If they have to pay more for electricity, their margins will get squeezed,” Luria said.
The effort has the potential to help PJM tackle a significant roadblock: improving the accuracy of its forecasts for demand growth. With tech giants paying for the power plants they need, the approach could weed out speculative projects that have skewed demand‑growth projections.
The involvement of governors – including Pennsylvania’s Josh Shapiro and Maryland’s Wes Moore, both Democrats – is seen by the Trump administration as helping to anchor the effort, since state policies have driven recent changes in the power mix, including the retirement of coal and gas plants. The initiative is also seen as aiding hyperscalers by ensuring reliable power supply, and it could be a model for other parts of the country, the White House official said.
Governors are committing to implement and assign these costs to the data centers, ensuring the price of these new power plants doesn’t land on the average household, the White House official said.
PJM’s auctions have emerged as a political flashpoint in the national debate about affordability after prices reached record levels in 2024. Although Pennsylvania’s Shapiro struck a deal with PJM to cap prices in future auctions, costs hit new highs in two subsequent sales.
The most recent auction, in December, also fell 6.6 gigawatts short of supplies, which PJM blamed on the frenzy to build massive data centers.
PJM is now being asked to extend the price cap for auctions held through this year, the White House official said.
While the statement of principles being signed Friday isn’t a binding legal document, administration officials have discussed the plan with a host of stakeholders, from PJM executives and state officials to utilities, power‑plant developers, Wall Street and the hyperscalers building these data centers, the official said.
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