Washington Steps In

The federal government just made data centers their problem.

On January 16, President Trump stood in the White House with governors from all 13 PJM states...

And announced something unprecedented:

A one-time "emergency" power auction specifically designed to make Big Tech pay for its own goddamn power plants.

Not a suggestion.

Not a recommendation.

A WARNING.

The era of data centers freeloading off the grid?

That shit just ended.

Here's what went down:

The Proposal:

→ A one-time emergency auction OUTSIDE PJM's normal process

→ Data center operators bid on 15-year power purchase agreements for brand new power plants

→ If you win the contract, you PAY for that capacity... whether you actually USE it or not

→ Potential to fund $15 billion in new baseload generation

Who Was In The Room:

→ Energy Secretary Chris Wright

→ Interior Secretary Doug Burgum

→ Governors from all 13 PJM states

(Including PA's Josh Shapiro... who literally threatened to WITHDRAW Pennsylvania from PJM if they don't fix this mess.)

Who WASN'T Invited:

PJM itself.

The grid operator found out about this the same way you did.

By reading the news.

Why This Happened:

PJM's December 2025 capacity auction was an absolute DISASTER.

For the first time in history, the grid operator failed to secure enough power to meet its reliability target.

The shortfall?

6.6 gigawatts.

That's the equivalent of SIX large nuclear plants just... not existing.

And here's the part that REALLY pissed everyone off:

Data centers accounted for 40% of the auction costs.

$6.5 billion out of $16.4 billion.

Nearly ALL of that... for data centers that haven't even been BUILT yet.

Energy Secretary Wright didn't mince words:

"High electricity prices are a choice. The Biden administration's forceful closures of coal and natural gas plants without reliable replacements left the United States in an energy emergency."

Translation:

The old power plants are shutting down.

The new ones aren't coming online fast enough.

And data centers are sucking up what's left.

So now?

You're gonna PAY to build your own.

Three days BEFORE the White House event...

Trump called out Microsoft by name on Truth Social.

The response came FAST.

Microsoft VP Brad Smith announced the company's new "Community-First AI Infrastructure" pledge.

What Microsoft Committed To:

→ Pay utility rates "high enough" to cover their OWN electricity costs

→ Won't ask communities for property tax reductions

→ Replenish MORE water than they use

→ Invest in local AI training and construction jobs

What This Actually Means:

Microsoft saw the freight train coming...

And decided to lay down on the tracks VOLUNTARILY.

They've watched $98 billion in projects get blocked or delayed in Q2 2025 alone.

They've seen the moratoriums.

The packed town halls.

The governors threatening grid withdrawals.

So they did the smart thing:

Get ahead of the mandate by VOLUNTEERING to pay.

Trump's Play:

Make hyperscalers pay their own way... or face political consequences.

Microsoft's Play:

Pay up now... before they FORCE us to pay even more later.

And here's the thing...

The other hyperscalers are gonna follow.

Google. Amazon. Meta.

Because they don't have a CHOICE.

The political pressure is too strong.

And Microsoft just showed them the only way out.

The same day as the White House announcement...

PJM released its 2026 Long-Term Load Forecast.

And the headline number surprised people:

Near-term demand forecasts went DOWN.

Summer 2028 peak dropped by 4.4 GW from the previous forecast (-2.6%).

Some people read this as "the AI boom is slowing down."

Those people are wrong.

Why The Drop:

→ PJM started vetting data center load requests WAY more strictly

→ Projects without firm commitments (signed contracts, actual construction timelines) are now getting DISCOUNTED

→ Updated EV and economic forecasts

Jefferies analysts nailed it:

"We read the load revisions as reflective of pushouts/delays, NOT weakness in demand."

The long-term picture is UNCHANGED:

3.6% annual growth for the next decade.

Summer peak could hit 241,000 MW by 2041.

Translation:

The demand is REAL.

The timeline is FUZZY.

Projects without secured power are getting filtered out of official forecasts.

Because PJM is done pretending every announced project is actually gonna happen.

While Washington was negotiating power auctions...

The grassroots opposition went NATIONAL.

The Big Move:

230+ environmental organizations — including Greenpeace, Friends of the Earth, and Food & Water Watch — sent a letter to Congress.

Their demand:

A nationwide moratorium on new data center construction.

Their Conditions Before ANY New Projects Move Forward:

→ Standards for energy sourcing and grid impacts

→ Cost allocation rules that prevent ratepayer subsidies

→ Water use and wastewater management requirements

→ Community transparency on siting decisions

Emily Wurth of Food & Water Watch:

"I've been amazed by the groundswell of grassroots, bipartisan opposition to this, in all types of communities across the U.S."

Bipartisan.

That's the word that should scare you.

When the left AND the right both hate your industry...

You've got a PROBLEM.

This Week's Local Battles:

→ Monterey Park, CA: 45-day moratorium passed... now considering a PERMANENT ban

→ Canton, NC: Public hearing February 11 on moratorium proposal

→ Howell Township, MI: $1B project WITHDRAWN after 200-person community panel pushed back... 6-month moratorium enacted

→ Georgia: 7 bills introduced targeting data centers

This isn't isolated anymore.

It's COORDINATED.

Georgia just became the new front line.

State legislators introduced SEVEN bills this week to restrict data center development.

Let me break down the damage:

SB 34: Protect residential customers from electricity costs of data centers

(Already advancing in committee.)

HB 559: End the sales tax break for data centers on December 31, 2026

HB 1012: Moratorium on ALL new data center construction until March 1, 2027

HB 528: Require data centers to report water consumption, electricity usage, and community impacts

Georgia has over 200 data centers.

It's one of the FASTEST-GROWING markets in the country.

And the political tide just turned HARD against the industry.

Rep. Ruwa Romman (sponsor of the moratorium bill):

"Before we permanently alter the landscape of our state, we have an obligation to properly regulate and assess both the benefits and impacts of these data centers on our communities."

Translation:

You came in too fast.

You asked for too much.

And now we're hitting the brakes.

If you've got projects in Georgia...

Price in the political risk.

Because this isn't going away.

Governor Pritzker signed the Clean and Reliable Grid Affordability Act on January 8.

This is the most significant energy legislation in Illinois since 2021.

What Matters For Data Centers:

Emissions Requirements:

As of January 8, 2026, new diesel-fired emergency generators at data centers MUST meet EPA Tier 4 emissions standards.

(For certain permit types, the deadline is December 1, 2026.)

Integrated Resource Planning:

Illinois now requires utilities to develop 5, 10, 15, and 20-year energy plans.

Data center load growth is front and center.

Reporting Requirements:

Starting in 2026, ALL data centers must report energy and water consumption to the Illinois Power Agency.

The UCS Report:

The Union of Concerned Scientists released their "Data Center Power Play" analysis on January 21.

Their projections:

→ Data center load growth could increase Illinois electricity system costs by $24 billion to $37 billion by 2050

→ Data centers could account for 64% of electricity demand growth by 2030

→ Without protections, these costs get passed to households

So yeah...

Illinois is making you report EVERYTHING.

And if you think they're collecting that data just for fun...

You're not paying attention.

PJM December Auction (Recap):

→ Capacity shortfall: 6.6 GW below reliability target

→ Price: $333.44/MW-day (FERC cap, third record in a row)

→ Data center load responsibility: 40% of costs ($6.5B of $16.4B)

→ New generation that cleared: 774 MW (less than 1% increase in supply)

ConstructConnect January Data Center Report:

→ Top 5 states for YTD starts spending: Louisiana, Texas, Virginia, Mississippi, Pennsylvania

→ $40 billion in starts from January-November 2025 (74% of total)

→ Power infrastructure spending projected: $27.8 billion in 2026 (up from $16.5B in 2025)

→ 80% of potential starts concentrated in just 5 states

National Opposition Tracker:

→ 230+ organizations calling for national moratorium

→ 7 data center bills introduced in Georgia

→ Active moratoriums or reviews in: California (Monterey Park), North Carolina (Canton), Michigan (Howell, Gaines, Lowell townships), Ohio (Jerome Township)

The game just changed.

Washington is now involved.

Not as a cheerleader.

As a REGULATOR demanding accountability.

If You're In Trucking/Heavy Haul:

The emergency auction is designed to bring $15 billion in new baseload power plants online in PJM's 13-state footprint.

When those plants break ground, they need EVERYTHING delivered:

Transformers. Turbines. Equipment. Steel.

Timeline?

6-12 months before the auction could even happen...

Then 5+ years to build.

This is a LONG game.

But if you position now in the Mid-Atlantic...

You'll be first in line when the projects start moving.

If You're In Electrical/Power Systems:

On-site generation just became MANDATORY.

Not optional.

The hyperscalers will be building their own power plants.

Either voluntarily (Microsoft model)...

Or by mandate (emergency auction model).

Gas turbines. Combined cycle plants. Potentially nuclear.

All of it needs interconnection, controls, distribution.

Illinois Tier 4 requirements mean cleaner but MORE EXPENSIVE backup generators.

Price accordingly.

If You're In Construction:

Georgia is now hostile territory.

Seven bills. Potential tax break sunset. Moratorium proposal.

If you're bidding work there, price in the political risk.

Illinois has new rules.

Permitting will take longer with Tier 4 requirements and reporting mandates.

Michigan remains a minefield.

Howell Township's $1B project just died.

Lowell Township's Microsoft project is in limbo. (Next meeting Feb 9.)

California local opposition is REAL.

Monterey Park could ban data centers entirely.

If You're In Equipment Supply:

Tier 4 diesel generators are now the standard in Illinois.

(And likely Virginia soon.)

Grid-independent installations need EVERYTHING from scratch.

Supply chains for backup power equipment will tighten further as demand shifts from "backup" to "primary" generation.

Stock up now.

Or pay more later.

February 9, 2026: Lowell Township (MI) planning commission meeting — Microsoft project decision

February 11, 2026: Canton, NC public hearing on data center moratorium

February 16, 2026: PJM full tariff revisions due to FERC on co-located loads

June 30, 2026: PJM next capacity auction (2028/29 delivery year)

End of September 2026 (target): Potential PJM emergency auction, if approved

The politics caught up with the projects.

For years, data centers were "economic development."

Now they're political LIABILITIES.

Rising electricity bills.

Water concerns.

Noise complaints.

Minimal local jobs.

Communities are turning HARD against the buildout.

Washington's Answer:

Make the hyperscalers pay their own way.

Build their own power plants.

Cover the grid upgrades.

No more ratepayer subsidies.

The Grassroots Answer:

Stop building until you prove you won't wreck our communities.

Microsoft saw the wall coming...

And volunteered to pay.

The rest will follow.

Or face mandates.

If your business depends on smooth data center development, understand this:

The easy approvals are OVER.

Every project now faces political scrutiny at the local, state, AND federal level.

The Winners:

→ Those positioned for off-grid installations

→ On-site generation specialists

→ Projects with secured power AND community support

→ States that haven't turned hostile (yet)

The Losers:

Those still assuming the 2023 playbook works in 2026.

It doesn't.