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In his end-of-year address, President Donald Trump slipped in a line that drew less attention than the headline-grabbing talk of tariffs and $1,776 "warrior dividends": build enough electrical supply to power America’s AI boom. It sounded almost dull beside the theatrics, but it may be the most consequential pledge of the speech.
On that same day, the country’s biggest power market, PJM—serving some 65 million people from Illinois to New Jersey—released the results of its latest reliability auction. Prices hit a record for 2027-28 and the system is still roughly the output of six large nuclear reactors short of its target. Analysts estimate the customer impact at about $16 billion across the region for the year.
That is where affordability collides with politics. Rising capacity charges—the price paid to keep enough power "on call"—will feed into monthly electric bills over the next few years, just as voters say the cost of living will decide the midterms. Senate Democrats are already probing whether "American families bankroll the electricity costs of trillion-dollar tech companies," demanding transparency on the utility deals behind AI-era data centers. The worry is simple: if the grid must expand to serve AI, who pays?
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Common Knowledge
The administration casts the promise as more power, faster. Its AI Action Plan pairs the data-center build out with quicker approvals for energy projects and transmission, effectively creating a federal fast lane for the power that 24/7 data centers require.
Industry behavior is already telling its own story. Some tech companies aren’t waiting for the grid; they’re building on-site power—from gas turbines to fuel cells—to avoid queues. The Wall Street Journal called it an "energy Wild West." Steve Bannon, a former adviser to Trump, has also criticized a recent executive order aimed at blocking states from creating their own artificial intelligence (AI) regulations.
Progressives warn of the risk of costs shifting from Big Tech to everyone else. In their new investigation, Senators Elizabeth Warren, Chris Van Hollen and Richard Blumenthal ask whether utilities are signing secret deals that socialize the costs while privatizing the gains. Governors and mayors in swing states also want answers because their constituents are asking the only question that matters at the ballot box: why is the bill higher?
Uncommon Knowledge
After a decade of flat-ish consumption, U.S. electricity demand is rising again, and data centers are a big part of it, especially in Texas and PJM territory. When demand outruns new plants and lines, prices get tight. Estimates put 2024 data-center use near 4 percent of U.S. electricity, with credible scenarios that more than double by 2030 if the AI build-out continues.
Which brings us back to the PJM auction. To guarantee reliability in 2027-28, PJM will pay the maximum allowed—$333.44 per MW-day—and it still missed its target by 6.6 GW. It says the system is not merely getting pricier; it is undersupplied for the demand already on order. The expected $16–16.4 billion in capacity costs doesn’t show up as a separate line on bills, but it’s baked into rates—and that’s why affordability, not challenging China in the AI race, will frame the politics.
In response, the White House wants nationwide rules for connecting "large loads" like data centers, with action expected into 2026. A final rule would standardize and speed the process, but crucially intensify the fight over who pays.
None of this is abstract. In Illinois, officials warn the state is running low on power as data-center construction surges and lawmakers are scrambling for fixes because steep bill increases are political dynamite. In Northern Virginia—the world’s biggest data-center cluster—zoning fights are deciding who pays, where lines go, and whether projects move at all. A judge recently invalidated a massive "Digital Gateway" campus, and a special election turned on data-center growth.
These are national politics in miniature. If pressure continues to worsen, expect the affordability backlash to intensify. The verdict on Trump’s 2026 will be in voters’ bills.
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