During his State of the Union address on Tuesday night, President Trump said major tech companies will be required to fund their own electricity usage under a new “ratepayer protection pledge” he negotiated with the Big Tech industry.

“We have an old grid, and an amount of energy that’s never been needed before,” Trump said. Americans, he noted in his comments, are concerned that “energy demand from AI data centers could drive up their electricity utility bills.”

According to estimates from the Lawrence Berkeley National Laboratory, power demand from US data centers doubled between 2018 and 2024 and could triple by 2028.

President Trump promised to cut electricity bills by half on the campaign trail, but prices have instead surged throughout his second term on the back of the growing AI industry. The average retail price for electricity reached 17.24 cents per kilowatt-hour in December, roughly 6% higher than the same time the year prior, according to data from the Energy Information Administration.

With the administration’s rate payer protection pledge requirements, Trump said, “No prices will go up, and in many cases energy prices will go down for communities.”

A federally funded study published in December noted that adding new customers, such as tech companies, onto the grid can lower prices if there is excess power capacity on the market.

The White House is also pressuring PJM Interconnection, the largest power grid operator, to hold an emergency auction where tech companies would be able to bid for long-term power agreements to control costs.

In the service region for PJM Interconnection, the country’s largest grid operator, capacity prices — the price utilities must pay to generators for electricity — have exploded, rising to $329.17 per megawatt-day for the 2026-2027 period from $28.92 in the 2024-2025 period.