An AI Power Tipping Point

The AI and data center boom is now driving the electricity and affordability crisis. Just this week, President Trump took to Truth Social to show he’s focused on the challenge, writing, “I never want Americans to pay higher electricity bills because of data centers.” He added that his team is now working with technology companies to ensure they “pay their own way.”

The President’s focus is well timed. Data centers are rarely paying their own way—shorthand for bringing their own new generation onto the grid. Instead, they’ve gobbled up existing power supplies when they’re already stretched perilously thin, putting immense pressure on consumer prices.

Meta’s recent deal to buy up the output from two existing nuclear power plants in Ohio is case in point. The 20-year deal will see Meta essentially take that around-the-clock generating capacity out of the marketplace while it works to eventually add new small modular reactors (SMRs) to meet its surging electricity needs. Just when, or if, those SMRs get built is an open question.

While the deal is certainly good news for Vistra, the owner of the nuclear power plants, and provides financial certainty to keep the plants running and improve their performance over the next twenty years, consumers are getting the short end of the stick. Capacity prices in the PJM market are already through the roof as power demand surges and new capacity additions can’t keep up. Pulling two nuclear power plants out of the market is only going to raise prices for consumers that have already seen their bills surge over the past five years.

Tallying the Impact

In fact, PJM’s market monitor recently announced that data centers accounted for a staggering 40% of the $16 billion in capacity costs in the latest PJM capacity auction. Over the past three capacity auctions, incoming data center demand has driven $21.3 billion in costs—costs data centers aren’t picking up themselves but that are instead socialized across PJM’s 67 million customers. In New Jersey, for example, these surging capacity prices meant a 20% jump in residential power bills in June. Nothing about this is fair or sustainable.

If you’re tempted to say the answer is “no new data centers,” then put down your phone, unplug your streaming service and close that laptop. Data centers have become essential infrastructure. And ensuring that AI technology is developed and deployed here – and shaped by American values and regulations – isn’t just a tremendous economic opportunity but a national security imperative.

An Answer Hiding in Plain Sight

Power availability is the key constraint on the AI and data center revolution. There’s a glaring mismatch between the speed at which data centers – with the power needs of large cities – can be built and how fast new electricity generating capacity and enabling infrastructure can come online. And not only do data centers need power, but they need dispatchable, reliable power.

It’s past time technology companies and data center developers embrace the obvious answer staring them in the face: the existing coal fleet.

Out of necessity, the Trump administration has shouldered the burden big data should be carrying itself. The Department of Energy has worked to ensure existing, essential coal plants scheduled for closure remain open as the nation faces power supply shortfalls, even stepping in to issue emergency orders to keep plants running.

Data companies – not the government – should use the coal fleet to immediately bring additional, dispatchable generation to grids across the country as they work to develop new generating capacity and infrastructure. Doing so would bolster grid reliability and immediately relieve pressure on electricity markets. That’s the kind of social responsibility Americans want to see from the data industry—not more empty environmental commitments.

The coal fleet is the needed gigawatts of reliable, dispatchable capacity hiding in plain sight. While the capacity factor – or utilization rate – of the coal fleet jumped from 42% in 2024 to 50% in 2025 amid rising power demand and natural gas prices, the fleet can produce far more power. It was designed to do so.

Data center offtake contracts that keep coal plants online, invest in upgrades and enable higher capacity factors would add significant new supply to the market. As recently as 2021, there were several months when the fleet had a capacity factor above 65%. Today’s reduced utilization rates are an opportunity data companies should seize.

The grid reliability and electricity affordability crises are imminently solvable if we employ all the tools at our disposal. The data industry needs to recognize what the Trump administration already has: the coal fleet might well be our ace in the hole.