The Trump administration, in conjunction with a group of governors, is pushing an energy plan that would effectively force large electricity users, including Big Tech data-center operators, to help finance new generation through long-term contracts. Artificial intelligence development has skyrocketed their power demand, leaving consumers to deal with shortages and increasing prices. According to the Wall Street Journal:
The agreement would be an unprecedented attempt by the federal government to check rising electricity prices within PJM Interconnection, a 13-state power market spanning an area from New Jersey to Kentucky. The build-out of data centers there in response to the artificial-intelligence boom is straining the grid’s capacity and has resulted in substantially higher costs in several of the grid operators’ recent power auctions.
The emergency auction would have tech companies and other big customers that haven’t built their own power pick up the bill for 15-year contracts for supply from new power plants. Deals would be worth at least $15 billion.
PJM, home to the largest concentration of data centers in the U.S., has come under strain in recent years as tech companies seek to connect even more of them to the grid. Power plants there have been going out of service faster than they can be replaced, which has put a squeeze on power supplies as more electricity-hungry facilities come online.
“Our directives will restore affordable and reliable electricity so American families thrive and America’s manufacturing industries once again boom,” Energy Secretary Chris Wright said. At a White House event including Democratic governors, he blamed past price increases on the clean-energy policies of the Biden administration.
Big tech companies deserve their share of the blame, by making irresponsible pledges to power their operations entirely with renewable energy. In reality, they purchase various forms of energy credits and certificates that “offset” their emissions. Supposedly, this strategy is not only climate-friendly but also the cost effective stewardship of shareholder capital. That’s because the cost to taxpayers, and to users and producers of energy that actually works (oil, gas, coal, nuclear), does not appear on their accounting ledgers.
Reliability, transmission, backup generation, and peak capacity are expensive, and somebody pays. If the Trump administration successfully presses Big Tech to stop hiding behind carbon laundering schemes and start backing their climate pledges with tangible investment in power generation infrastructure, the major AI players will be forced to reevaluate whether their progressive promises are worth the true cost.
That is exactly what National Legal and Policy Center has already asked two of the biggest names to do:
-
Apple (withdrawn after productive engagement): Our proposal asked Apple’s board to quantify the incremental capital and operating expenditures required to maintain “100% renewable electricity” across corporate operations and to reach 2030 carbon-neutral goals—plus the expected effects on hardware gross margin, services margins (e.g., iCloud/data), and consolidated profitability under varying power-price scenarios. Apple’s disclosures tally volumes and participation but don’t show the math investors need amid tightening power markets. (Proposal: Report on Financial Impact of Renewable Energy Implementation)
- Amazon: Our proposal requests a report summarizing incremental capex/opex tied to The Climate Pledge from 2019 onward and describing how the board has re-evaluated that pledge in light of exploding AI-driven power needs at Amazon Web Services. As the world’s largest corporate buyer of renewables, Amazon’s REC-heavy strategy and power-procurement costs are material to margins and grid realities that regulators are now scrutinizing. (Proposal: Report on Financial Impact of Renewable Energy Implementation).
A coalition of Republican Attorneys General recently opened an investigation into “green” claims made by Amazon, Microsoft, Alphabet, and Meta. The deceptive facade of viable “renewable” energy is rapidly falling apart in the face of economic reality. NLPC is not at all surprised.
