In the longest State of the Union address in at least 62 years, President Trump devoted just over a minute to a topic that’s left many Americans feeling increasingly powerless: whether soaring data-center demand for electricity will drive up their own rates.

“Tonight I'm pleased to announce that I have negotiated the new ratepayer protection pledge,” he said about 44 minutes into the nearly two-hour speech. “We're telling the major tech companies they have the obligation to provide for their own power needs.”

He didn’t name any firms that have signed on to this commitment, although White House representatives have been telling media outlets such as the New York Times that an event at the White House next week will feature those companies.

Trump called the pledge “a unique strategy never used in this country before,” but some of these companies have already announced commitments to pay for any new generating capacity and grid infrastructure needed for their data-center projects.

Microsoft, for example, pledged to do just that in January, following earlier initiatives to pay for data-center power generation such as its 2024 deal to restart a nuclear reactor at the shuttered Three Mile Island plant near Harrisburg, Pennsylvania.

Later that month, OpenAI announced a comparable commitment for its $500 billion Stargate data-center plan “to [pay] our own way on energy, so that our operations don’t increase your electricity prices.” And on Feb. 11, Anthropic posted its own pledge, including promises to “pay for 100% of the grid upgrades needed to interconnect our data centers” and “bring net-new power generation online to match our data centers’ electricity needs.”

Google, meanwhile, announced in June 2024 that it had developed a new “clean transition rate” framework, first signed with the Nevada utility NV Energy, under which it would pay for new renewable power sources to cover its data-center needs without increasing residential rates. On Tuesday, the company announced another deal along these lines with Xcel Energy to add wind, solar, and battery capacity in Minnesota.

Last night, xAI CEO Elon Musk reposted a statement from xAI lobbyist James Burnham in which he said the company behind the Grok chatbot “has never caused our neighbors' electricity bills to rise.” He wrote: “When our team builds supercomputers, that includes power.”

And Meta announced Wednesday that it was already on board: “Meta pays the full costs for the energy used by our data centers, so they aren’t passed on to consumers.”

Trump’s brief description of this pledge in his speech suggested it was necessary because of an “old grid” incapable of meeting data-center demands, which checks out.

“So I'm telling them they can build their own plant, they’re gonna produce their own electricity,” he said. “It will ensure the company's ability to get electricity while at the same time lowering prices of electricity for you, and could be very substantial.”

But requiring data centers to include their own on-site power generation capacity may not make them any better neighbors, as the people living downwind of xAI’s gas-turbine-powered plant near Memphis can attest. A February Washington Post report cited concerns among communities in Texas and West Virginia, among others, about the pollution coming from off-grid power facilities for data centers planned near them.

The Trump administration, however, does not seem too concerned about that risk. The “AI Action Plan” announced last summer lists methane gas first among sources of “dispatchable” power for data centers, followed by an even bigger polluter, coal, and the zero-emissions options of geothermal and nuclear power.

This White House has also gone out of its way to slow or halt the development of solar and wind power, including multiple attempts to yank permits for offshore wind projects that have all been rejected by courts.

Republicans in Congress have joined Trump in that crusade: Last year’s giant “One Big Beautiful Bill” budget-reconciliation measure terminated most of the clean-energy credits offered under President Biden’s Inflation Reduction Act. That drew a mention in the official Democratic response, in which Virginia Gov. Abigail Spanberger criticized Trump for, among many other things, “driving up costs in energy.”

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved