By Jacob Bogage , Jarrett Renshaw and Tim McLaughlin
WASHINGTON, July 24 (Reuters) – President Donald Trump announced a non-binding pledge by U.S. power producers and data centers on Thursday to fund or build energy infrastructure that would meet massive AI-related power needs while shielding consumers from high electricity costs.
Consumer advocacy groups and other administration critics, however, dismissed the pledge as an empty promise to consumers as Trump tries to balance his support for power-guzzling data centers against public anger over rising utility bills.
Trump has been pushing an aggressive build-out of AI-related infrastructure, as part of an economic agenda that includes winning the AI race against China.
But data centers’ demands on overloaded transmission lines, compounded by the power sector’s labor shortages and plant retirements, have made rising energy costs a volatile issue for voters going into November’s midterm elections.
“Under this groundbreaking plan, America’s largest tech companies have formally committed to fund or build all energy infrastructure required to meet the demand they are placing on the grid,” Trump said at an Environmental Protection Agency event attended by Republican governors, power sector CEOs and data center developers.
“So they’re going to be funding all of those electric needs, and we’re giving them the right to build their own power plants.”
Average annual residential electricity prices are predicted to rise by 5.1% in 2026 and 2.4% in 2027, before inflation, the Energy Information Administration said.
Community meetings in many states have lasted into the wee hours as residents oppose development of data centers they view as noisy, bad for the environment and a factor in rising electric bills.
Trump’s take was more positive.
“You have communities that really want the data centers, and frankly those are the smart communities,” he said.
Critics, meanwhile, have questioned whether the voluntary pledge will prevent higher bills as AI power demand accelerates. Jesse Lee, senior adviser at advocacy group Climate Power, criticized the pledge’s lack of enforcement triggers, calling it a “pinky promise.”
“Instead of allowing affordable, scalable clean energy onto the grid, Trump has actively pressured tech companies to power their data centers with fossil fuels that will increase utility costs and expose Americans to toxic pollutants,” Lee said.
Josh Levi, president of the Data Center Coalition, defended the industry, which he said powers essential services such as telehealth appointments, digital classrooms, secure banking systems and air traffic control networks.
Republican governors from Georgia, Idaho, Louisiana and Nebraska attended Thursday’s event, along with chief executives Drew Marsh of Entergy Corp and Chris Womack of Southern Co. Marsh and Womack are among a group of CEOs at the 15 largest U.S. power companies sitting on nearly $1 billion in stock-based pay, according to a Reuters analysis. That value is poised to keep rising as firms invest to fix the U.S. electrical grid.
At the center of the political battle over data centers is PJM Interconnection, the largest U.S. grid operator.
“PJM is the face of a national problem,” according to analysts at Siebert Williams Shank, who cited its struggle to withstand unprecedented power consumption, along with power plant retirements, transmission line congestion and construction bottlenecks.
“AI data centers did not create every challenge facing electric systems, but they have amplified nearly all of them.”
PJM is battling escalating costs on several fronts as it manages the flow of electricity for 67 million people from Washington, D.C., to Chicago.
In PJM’s latest capacity-market auction, which secures power from generating sources for peak demand times, data centers accounted for $6.3 billion of capacity-market charges, or nearly 40% of the total. Those charges ultimately show up in customers’ monthly bills.
(Reporting By Tim McLaughlin in Boston, Jacob Bogage in Washington and Jarrett Renshaw; Editing by Timothy Gardner and Edmund Klamann)
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