Trump Administration and Governors Urge PJM Interconnection to Boost Power Supply Amid Rising Data Center Demand

White House Initiative Targets Grid Reliability and Consumer Costs

On Friday, January 16, 2026, the Trump administration, led by Energy Secretary Chris Wright and Interior Secretary Doug Burgum, joined a bipartisan coalition of governors to exert pressure on PJM Interconnection, the largest electric grid operator in the United States. The initiative calls for urgent measures to boost power supplies and mitigate escalating electricity bills for consumers across PJM's service territory, which spans 13 states and the District of Columbia, serving approximately 67 million people.

The primary catalyst for this intervention is the rapid expansion of AI-driven data centers, which are placing unprecedented demands on the electric grid. These facilities, particularly concentrated in areas like Northern Virginia, have been identified as a significant factor in rising electricity prices and growing concerns about grid reliability.

Emergency Auction and 'Bring Your Own Generation' Proposal

A central demand from the administration and governors is for PJM to conduct a one-time 'emergency' auction for new power generation. This auction would specifically enable data center owners to bid on 15-year power purchase agreements, a departure from PJM's standard operational procedures. The proposal, often referred to as 'bring your own generation' (BYOG), would require data centers to directly fund the construction of new power plants to meet their energy needs, potentially stimulating over $15 billion in new power plant investments.

Additionally, the plan advocates for the **reimposition or extension of price caps** on PJM's annual capacity auctions. This measure aims to protect ratepayers from further cost increases, building on a previous agreement negotiated by Pennsylvania Governor Josh Shapiro that had temporarily capped wholesale electricity payments to power plant owners.

PJM's Response and Broader Context

Governors participating in the announcement included Glenn Youngkin of Virginia, Wes Moore of Maryland, and Josh Shapiro of Pennsylvania, highlighting the bipartisan nature of the concerns. Energy Secretary Wright stated that President Trump had 'asked governors across the Mid-Atlantic to come together and call upon PJM to allow America to build big reliable power plants again.'

PJM Interconnection, headquartered in Valley Forge, Pennsylvania, was reportedly not invited to the White House event but has stated it is reviewing the principles put forth by the administration and governors. The grid operator has been grappling with its own challenges, including a backlog of new generation requests, particularly from renewable energy projects, and concerns about the retirement of existing baseload power plants. Analysts suggest that any 'emergency' auction would require approval from the Federal Energy Regulatory Commission (FERC) and could complicate PJM's ongoing efforts to reform its interconnection processes and capacity market rules.