President Trump will host major technology executives March 4 at the White House to sign a "Ratepayer Protection Pledge" committing AI companies to fund their own electricity infrastructure rather than passing data center power costs to American households, following his State of the Union announcement Tuesday night that electricity demand from AI threatens to drive up consumer utility bills. Amazon, Google, Meta, Microsoft, OpenAI, xAI, and Oracle are expected to attend the signing ceremony.
The initiative addresses surging electricity costs linked directly to AI data center proliferation. Average national electricity prices increased more than 6% in the past year according to Energy Information Administration data, with households in high-concentration data center states including Virginia, Illinois, and Ohio experiencing rate increases as high as 16%. A CNBC analysis published November found these regional spikes correlated directly with data center construction density.
"We're telling the major tech companies that they have the obligation to provide for their own power needs and can build their own power plants so no one's prices will go up," Trump stated during Tuesday's address. Energy Secretary Chris Wright told Politico after the speech that "all of the brand-name hyperscalers" have signed onto the deal, though details remain sparse on enforcement mechanisms or compliance requirements.
Industry Already Moving Independently
Multiple hyperscalers had already announced independent commitments to cover electricity costs through building power sources or paying higher rates before the White House announcement, part of broader efforts to solve public relations problems around data center expansion and win over skeptical communities.
TD Cowen analysts noted in a research brief that "data center 'pledges' to ring-fence costs are both non-binding and not new," suggesting the White House ceremony may formalize existing industry practices rather than creating new obligations. More than a dozen states have changed power rules in recent years requiring data center developers shoulder more electricity costs independently.
The Federal Energy Regulatory Commission, with Department of Energy urging, is already working on policies pushing large industrial customers to cover costs like needed grid upgrades—mechanisms that would operate regardless of White House pledge participation.
Demand Growth Outpacing Grid Capacity
Lawrence Berkeley National Laboratory estimates power demand from US data centers doubled between 2018 and 2024 and could triple by 2028. Industry projections suggest data center electricity load could reach 76 gigawatts by 2026 and consume 7-12% of total US power supply by 2030.
In PJM Interconnection's service region—the country's largest grid operator—capacity prices exploded to $329.17 per megawatt-day for the 2026-2027 period from $28.92 in 2024-2025, an increase exceeding 1,000% driven largely by data center interconnection requests.
"We have an old grid, it could never handle the kind of numbers—the amount of electricity—that's needed," Trump said Tuesday. The administration is pressuring PJM Interconnection to hold an emergency auction where tech companies could bid for long-term power agreements attempting to control costs.
Criticism of Pledge Effectiveness
Energy experts questioned whether the pledge addresses root causes of rate increases. Ari Peskoe, director of Harvard Law School's Electricity Law Initiative, told Politico the White House is "putting this pledge on the wrong entities" since utilities and state regulators—not tech giants—determine how energy costs distribute among ratepayers.
Brandon Owens, grid expert and founder of advisory platform AIxEnergy, noted "most of today's cost pressure is coming from transmission, distribution, and system readiness, not energy supply. Those costs remain even if a data center self-supplies generation."
Emily Peterson-Casson, policy director for progressive advocacy group Demand Progress, characterized the pledge as "worthless pinky swears from the multi-billion dollar corporations who are trying to force us to sacrifice our jobs, our children, our privacy, and our communities for an uncertain, AI-powered future that they can control and we won't."
A federally funded study published December noted that adding new customers like tech companies to the grid can lower prices if excess power capacity exists on the market. However, current grid constraints mean new data centers typically require infrastructure upgrades that historically get socialized across rate bases—the practice the ratepayer protection pledge aims to prevent.
The March 4 summit represents the administration's attempt to balance AI infrastructure buildout crucial for competing with China against growing voter anger over rising electricity bills heading into 2026 midterm elections.
