Navarro urges data centers to pay full grid costs, hitting Public Service Enterprise Group (PSEG)

White House Adviser Flags Data Center Cost Reallocation

Implications for Utilities Like Public Service Enterprise Group

White House trade adviser Peter Navarro is warning that the administration may require data center operators to bear the full costs their facilities impose on local utilities, a shift that would directly affect companies such as Public Service Enterprise Group (PSEG). Navarro tells Fox News data center firms, "Meta on down," should pay for the electricity they use, the resiliency impacts they impose and the water consumption they cause so those costs are "internalized." He offers no implementation details, leaving utilities and regulators to weigh how such a policy might be applied across jurisdictions.

For PSEG and peer electric companies, a policy that forces data centers to fund grid upgrades could reshape infrastructure planning and cost allocation. Utilities now often absorb connection and resiliency costs that are ultimately recovered through general ratepayers; shifting those expenses onto large commercial customers could ease upward pressure on residential bills and alter investments in transmission, distribution and backup capacity. The proposal also raises operational questions for utilities about interconnection procedures, demand forecasting and the treatment of water-intensive cooling systems used by some data centers.

Industry responses and regulatory uncertainty temper immediate effects. Major cloud and social media companies argue they already cover direct energy costs and invest in local upgrades, while utilities and state public utility commissions must consider legal and procedural pathways to reassign costs without disrupting service or violating franchise agreements. The absence of a clear federal mechanism leaves PSEG and other regional utilities assessing potential scenarios — from negotiated cost-sharing agreements with tech firms to formal rule changes at state commissions — as electricity demand from large data loads continues to grow.

Political backdrop

Navarro’s remarks come as U.S. electricity prices rise — up 6.9% year-on-year in 2025 — and affordability becomes a heightened political issue ahead of the 2026 midterms. He ties the proposal to broader affordability and wage policies, while Democrats use rising utility and consumer prices to criticize the administration’s economic stewardship.

Corporate response and unanswered questions

Meta says it already "pays the full costs for energy used by our data centers" and funds local infrastructure upgrades, and CNBC seeks clarity from the White House on enforcement pathways. With no specific policy blueprint, utilities like PSEG face near-term uncertainty over cost recovery, planning and potential negotiations with large data center customers.