Tech Firms Pressed to Fund $15B Power Plants They May Never Use
In a move that’s raising eyebrows across the energy and tech sectors, the Trump administration is pushing major technology companies to commit to $15 billion worth of new power generation—despite uncertainty over whether they’ll actually use the electricity. The proposal centers on PJM Interconnection, the largest U.S. grid operator, which serves 65 million people across 13 Mid-Atlantic and Midwest states, including northern Virginia’s booming data center corridor. With data center demand projected to triple by 2036, federal officials argue preemptive investment is essential. But critics question why private companies should foot the bill for infrastructure they might never tap.
Why Is the Government Targeting Tech Companies?
The White House, alongside several state governors within PJM’s footprint, has issued a nonbinding “statement of principles” urging tech giants to participate in a capacity auction for 15-year power contracts. These contracts would guarantee payments to new power plants—likely natural gas or dual-fuel facilities—regardless of whether the electricity is ever consumed. The rationale? Anticipated surges in data center energy use could strain the grid within just a few years.
Data centers already account for a growing slice of U.S. electricity demand. In PJM territory alone, peak load rose 10% over the past decade and is expected to climb another 6.5% by 2027. Much of that growth stems from AI workloads, cloud computing, and hyperscale facilities clustered in places like Ashburn, Virginia—the so-called “Data Center Alley.” Federal officials argue that waiting for shortages to materialize could lead to blackouts or price spikes. Hence, the push for tech firms to “pre-pay” for reliability.
How Would This Work—and Who Pays?
Under the proposed framework, tech companies would bid in PJM’s upcoming capacity auction not as end users, but as financial backers of new generation. Even if their actual power draw falls short of projections, they’d still be on the hook for contract payments—effectively subsidizing standby capacity. Think of it as an insurance policy: you pay premiums even if you never file a claim.
But here’s the catch: PJM hasn’t endorsed the plan. In fact, the grid operator appears wary. “We were not invited to the event they are apparently having tomorrow and we will not be there,” said PJM spokesman Jeffrey Shields, signaling a notable rift between federal policymakers and the technical body managing the grid. PJM is currently finalizing its own long-term resource adequacy study, which may recommend different solutions—like demand-response programs or transmission upgrades—rather than forcing corporate prepayments.
The Stakes for Tech: Cost, Control, and Credibility
For tech companies, this isn’t just about dollars—it’s about autonomy and sustainability. Many have spent years building renewable energy portfolios and signing power purchase agreements (PPAs) with wind and solar farms to meet net-zero goals. Being compelled to fund fossil-fueled plants, even indirectly, could undermine those commitments.
Moreover, the financial exposure is significant. A $15 billion obligation spread across a handful of firms could mean hundreds of millions per company—money that might otherwise go toward R&D, efficiency improvements, or actual clean energy projects. And if future demand doesn’t materialize as forecasted (a real possibility given rapid advances in chip efficiency and AI optimization), these contracts could become stranded liabilities.
Still, some industry insiders acknowledge the grid is under pressure. “We can’t pretend data centers aren’t changing the energy landscape,” said one executive familiar with the discussions. “But the solution shouldn’t be a blunt instrument that shifts public infrastructure costs onto private balance sheets.”
Grid Reliability vs. Market Distortion
Energy economists warn that mandating corporate participation in capacity markets could distort pricing signals and discourage more efficient solutions. Capacity auctions are meant to reflect genuine scarcity—not political mandates. If tech firms are forced to bid regardless of need, it could inflate prices for everyone else and reduce incentives for innovation in load management or storage.
Others point out that PJM’s existing market mechanisms already allow voluntary participation. If companies truly feared future shortages, they could choose to secure backup capacity on their own terms. The administration’s approach, however, removes that choice—framing it as a civic duty rather than a business decision.
This tension reflects a broader national debate: as digital infrastructure becomes critical to economic security, who bears responsibility for keeping the lights on? Should tech giants shoulder more of the burden, or is this a classic case of public goods requiring public investment?
What Happens Next?
While the statement of principles carries no legal weight, it sets a clear political tone. The administration is signaling that it views big tech not just as consumers of electricity, but as de facto partners in grid stewardship. Whether that vision gains traction depends on several factors:
- PJM’s upcoming resource plan, expected within weeks, which could validate or challenge the urgency of new builds.
- Corporate pushback, especially from firms with strong ESG commitments.
- State-level reactions, as governors in PJM states weigh economic development against ratepayer impacts.
Already, electricity rates in the region rose 10–15% in 2025. If new capacity costs get passed through to consumers—or if tech firms relocate operations to grids with clearer rules—it could reshape the geography of America’s digital economy.
A Precedent in the Making?
If successful, this model could spread beyond PJM. Other grid operators—like MISO or CAISO—are also grappling with data center-driven demand spikes. A federal endorsement of “preemptive corporate funding” might become a template, especially in regions where permitting delays and NIMBYism slow traditional infrastructure.
Yet the optics are tricky. Asking profitable tech firms to pay for unused power plants may resonate politically, but it risks alienating the very innovators driving U.S. competitiveness. It also sidesteps harder questions about modernizing transmission, streamlining interconnection queues, or reforming how capacity markets value flexibility versus brute-force generation.
The Trump administration’s push highlights a real and growing challenge: the U.S. grid wasn’t built for the AI era. But solving it by compelling private companies to bankroll speculative power plants may create more problems than it solves. True grid resilience requires smarter coordination—not just deeper pockets.
As the debate unfolds, all eyes will be on PJM’s next moves and whether tech leaders dig in their heels or strike a compromise. One thing is certain: in the race to power the future, the rules of the game are being rewritten—and not everyone agrees on the playbook.
