States Unite Behind Trump Administration Push for New Power Generation
A cross-party coalition of U.S. governors and senior Trump administration officials has agreed on a coordinated push to accelerate new power generation across the Mid-Atlantic and Midwest electricity system, as rising prices and surging data-centre demand put growing pressure on the regional grid.
The agreement brings together Energy Secretary Chris Wright, Interior Secretary Doug Burgum and the governors of all 13 states served by the region’s wholesale power market — spanning Indiana, Ohio, Virginia, West Virginia, Tennessee and Kentucky, alongside Maryland, Pennsylvania, Delaware, Illinois, Michigan, New Jersey and North Carolina. The group signed a joint Statement of Principles on Friday calling for urgent reforms to expand electricity supply while shielding households from further bill increases.
At the centre of the plan is a proposed Reliability Backstop Auction — an emergency-style procurement mechanism designed to bring new power plants onto the grid with long-term financial certainty. Under the proposal, the regional grid operator would hold a special auction no later than September 2026 to procure new generation capacity, offering successful projects 15-year revenue certainty outside the normal capacity market.
The long-term contracts are intended to unlock investment in large, reliable power plants that can meet fast-rising demand from data centres and other energy-intensive users. By guaranteeing stable revenues over 15 years, policymakers argue the auction would allow developers to move forward quickly with projects that might otherwise stall due to market uncertainty.
A key feature of the agreement is who pays. Rather than spreading the cost across all electricity consumers, the governors and federal officials argue that new data-centre demand should bear primary responsibility for funding the additional generation it requires. The Statement of Principles calls for the cost of any capacity procured through the backstop auction to be allocated to load-serving entities with new data centres that have not secured their own power supply or agreed to curtail usage during periods of system stress. Any remaining costs would be distributed based on remaining net short positions.
The approach reflects growing concern that unchecked growth in data-centre electricity demand could push capacity prices higher for households and businesses. Electricity prices in the region have risen faster than in most other parts of the country in recent years, a trend the Trump administration has repeatedly linked to tightening supply margins and the retirement of existing power plants.
To further protect consumers, the agreement also calls for extending the existing capacity price collar to cover the next two base residual auctions, limiting near-term price spikes while new generation is developed. Officials argue this would prevent residential customers from bearing the brunt of transition-period costs as the system adapts to rapid load growth.
Beyond the auction itself, the governors and federal agencies are urging reforms to improve how future demand is forecast. The Statement of Principles calls on the grid operator to tighten its modelling of large new loads, including data centres, and to only include projects in official forecasts that can demonstrate a meaningful and verifiable financial commitment, such as executed service agreements or posted collateral.
The agreement also targets long-standing delays in generator interconnection. It urges faster completion of ongoing interconnection studies, prioritisation of projects tied to system reliability initiatives, and rapid implementation of broader reforms aimed at cutting study timelines to 150 days or less, in line with federal regulatory guidance.
Taken together, the measures reflect a broader effort to return the regional power system to what officials describe as market fundamentals — expanding supply in line with real demand, restoring investment incentives for reliable generation, and preventing speculative projects from distorting outcomes. The coalition has also signalled support for a wider review of the capacity market itself, with reforms expected to be in place ahead of the auction scheduled for 2027.
The administration frames the initiative as a direct response to what it has labelled a national energy emergency, arguing that new power generation is essential to keeping electricity affordable, supporting manufacturing and enabling the continued expansion of artificial intelligence infrastructure. By pairing long-term investment certainty with cost allocation aimed squarely at new data-centre demand, policymakers are seeking to expand the grid without further burdening ordinary consumers.