White House Pressures PJM to Act as Data Center Energy Demand Threatens Grid Reliability

The White House has urged PJM Interconnection, the largest electric grid operator in the United States, to hold an emergency power auction to prevent rolling blackouts as electricity demand from data centers accelerates faster than new power generation can be built. PJM serves around 67 million customers across 13 states and Washington, D.C., making grid reliability in the region a critical national issue.

The initiative, backed by the Trump administration, aims to address surging electricity prices and growing reliability risks across the mid-Atlantic. It comes after a recent PJM capacity market auction produced record-high prices for generators, more than 800% higher than the previous year, driving up power bills for households and businesses. The White House is pushing for caps on what existing power plants can charge in the capacity market to protect consumers from further price spikes.

At the same time, PJM announced its own proposal that would require large data centers to “bring your own generation,” or BYOG. Under this approach, data centers would be responsible for funding new power plants built specifically to meet their needs, regardless of whether they ultimately use the electricity. If they fail to do so, they could face power curtailments during peak demand periods. PJM also proposed an accelerated interconnection process for state-sponsored generation projects to speed new capacity onto the grid.

During a White House event, Energy Secretary Chris Wright and Interior Secretary Doug Burgum joined several governors to discuss plans to fast-track more than $15 billion in new power generation within PJM’s territory. State leaders have criticized PJM for moving too slowly as demand rises, driven largely by rapid data center expansion linked to artificial intelligence and cloud computing.

PJM projects that peak summer demand could rise by about 70 gigawatts to 220 gigawatts over the next 15 years, far above its 2006 record of 165 gigawatts. While the grid operator says it has processed over 170 gigawatts of new generation requests since 2023, political pressure is mounting as rising power bills fuel backlash and concerns over future blackouts.