The Trump Administration recently reached an agreement with a bipartisan group of Mid-Atlantic state governors to direct PJM (a regional transmission organization that manages the United States’ largest grid) to hold an emergency electricity auction to make tech companies pay for the construction of new power plants. In a new insight, Director of Energy and Environmental Policy Shuting Pomerleau provides an overview of the agreement, reviews potential challenges, and analyzes the major trends in the PJM electricity market.

Key points:

• The goal of the agreement is to ensure the rapid expansion of artificial intelligence (AI) data centers does not increase electricity costs for residential customers.
• Major challenges to implementing the plan include the long lead time it takes to build a new power plant and add electricity to the grid, and the potential push back from PJM as it tries to retain its independence in managing the region’s wholesale electricity market.
• It remains to be seen whether this unprecedented plan will be implemented, and if so, how it ultimately affects PJM’s electricity supply and prices for non-hyperscale customers.

Read the analysis.