Trump administration pushes PJM to hold ‘emergency’ auction to supply data centers

Core Viewpoint - The Trump administration and a bipartisan group of governors are urging the PJM Interconnection to conduct a one-time "emergency" auction to provide new power sources for data centers, which could lead to the development of $15 billion in new power plants [2][4]. Group 1: Auction Proposal - The proposed auction would allow data center owners to bid on 15-year power purchase agreements, marking a significant change from PJM's usual operational procedures [2]. - Data centers would be obligated to pay for the new generation capacity, regardless of their actual power usage [2]. Group 2: PJM's Response - PJM is currently reviewing the emergency auction proposal and will collaborate with stakeholders to align it with a forthcoming plan for data center interconnections [3]. - PJM operates the grid and wholesale power markets across 13 Mid-Atlantic and Midwest states, serving approximately 65 million people [6]. Group 3: Regulatory Considerations - Any emergency auction would require approval from the Federal Energy Regulatory Commission (FERC), with the new FERC chairman prioritizing data center connections and grid reliability [4]. - Analysts suggest that the proposal from governors and federal officials lacks binding authority, indicating that it is more of a policy signal than an immediate market reform, with a potential timeline of six to twelve months before an auction could occur [5]. Group 4: Current Market Structure - PJM typically ensures power supply through capacity auctions held in advance, which are based on estimates of future power needs [7].