OPINION:
Earlier this month, Amazon, Google, Meta, Microsoft, OpenAI, Oracle and xAI — the most powerful companies responsible for the artificial intelligence revolution reshaping the global economy — committed to a simple principle: They will build, bring or buy the power their data centers require.
American households won’t foot the bill for the AI build-out. The tech giants will.
President Trump called it a historic win for American families. He is not wrong.
The Ratepayer Protection Pledge addresses a real and growing problem, but Big Tech’s energy build-out will be only as successful as the government allows it to be. Washington’s energy policies are designed to manage stagnation, not provide abundance. To fix that, the government must let industry deploy energy faster than ever before.
To understand why, consider what has happened to electricity prices in the PJM grid, the country’s largest, spanning 13 states from the East Coast to the Midwest and serving 67 million people. Two years ago, capacity prices were $28.92 per megawatt-day. They are now at $329.17. That’s an elevenfold increase. Analysts project that the average PJM household could pay $70 more per month by 2028.
This isn’t hard to explain. For decades, electricity demand barely moved. Whatever increase in demand was driven by industrial growth was compensated for by increased efficiency. As a result, utilities, energy companies and regulators built a system designed for stability, not expansion.
Nuclear deployment slowed to a trickle, clean energy innovations happened elsewhere, grid development stagnated, and permitting timelines stretched for years.
Everything changed when AI arrived. Along with manufacturing reshoring and electrification, the technology drove up demand faster than at any other point in modern American history. Power demand from data centers tripled from 2014 to 2023 and could triple again by 2028.
Our energy system wasn’t built for this world.
The Ratepayer Protection Pledge answers the question of who pays. That matters. Data centers accounted for 63% of the capacity price surge in PJM’s 2025-2026 auction, resulting in an additional $9.3 billion in costs for ratepayers. Requiring hyperscalers to cover their own infrastructure costs and pay for it whether they use it or not is a good move.
The pledge leaves unanswered the harder question: How can we build enough supply fast enough to bring down prices?
The fundamental problem is a regulatory framework designed for a stagnant grid that is now confronting a dynamic one. Thanks to red tape, building a new power plant and developing energy innovations takes longer than building data centers. As long as that’s the case, demand will rise faster than supply and prices will remain high.
The good news is that the Trump administration already knows this. Mr. Trump’s AI Action Plan, launched in July, calls for streamlined permitting, modernized transmission and expanded domestic energy capacity. These are the right instincts. The question is execution and speed.
Permitting reform is the most important. We need those building natural gas plants, solar farms, nuclear facilities, geothermal and every other type of power generation to focus on deployment, not pleasing bureaucrats. Congress should fast-track legislation that sets firm timelines for energy infrastructure approvals, limits ridiculous legal challenges and works through the permitting backlog.
The SPEED Act, passed by the House and languishing in the Senate, is a good place to start. The Senate should move that bill quickly.
When policymakers unleash the floodgates, industry will deploy the high-tech, clean energy that is already available. We can already see this happening. Google just acquired Intersect Power to gain access to a pipeline of gigawatts of solar capacity, marking the first time a major tech firm has bought a renewable energy developer outright. xAI is building solar in Memphis, Tennessee. Microsoft, Amazon and Meta are investing in next-generation nuclear technology. The behind-the-meter build-out being accelerated by the Ratepayer Protection Pledge is clean, innovative and competitively priced.
When tech companies pay for their own supply, it could create a positive, pro-energy feedback loop. More energy use creates more demand, which would generate more tech-funded supply, flooding the energy sector with resources and giving it a reason to scale rapidly.
AI-driven scaling plus innovation could then lead to lower prices for all in the long term, benefiting every factory and business around the country, not just data centers. The Ratepayer Protection Pledge has the power to be transformational. The companies that are straining the grid are now rushing to strengthen it.
The pledge will be only as powerful as the regulatory environment allows. If the permits don’t come, then the plants don’t get built. If the plants don’t get built, then the prices don’t come down.
Mr. Trump and major tech companies are preparing to lower energy prices. Red tape shouldn’t stop them.
• Chris Johnson is the founder and president of the American Energy Leadership Institute.
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