PORTLAND, Ore. — FERC Commissioners Judy Chang and Lindsay See endorsed a recent letter by Chair David Rosner on the sharing of best practices around load forecasting in light of growing demand driven by data centers.
The commissioners discussed the letter in separate panels during the fall joint meeting of the Committee on Regional Electric Power Cooperation and Western Interconnection Regional Advisory Body (CREPC-WIRAB) on Oct. 2.
Both commissioners view the rapid growth of data centers as an opportunity for the U.S. economy but argued that development must be coupled with efficient planning and investments. Collaboration between state and federal authorities is key, they said.
“We have to work well with the states and the RTOs for this,” See said. “This is an area where we do not have all of the authority, even primary authority … a lot of it is more of a regional and state issue. But we do have an important role. We have to work well together. I think load forecasting and transparency … is one of the biggest challenges in front of us.”
See pointed to Rosner’s letter on Sept. 18, in which he asked all six jurisdictional ISOs and RTOs for information on best practices around load forecasting in light of growing demand driven by data centers and other sources. (See FERC Focusing on Large Loads, Clearing the Decks Under Rosner.)
The letter raises questions FERC and regulators across the country “keep hearing over and over … how do we know that load is real? When is it coming? Where is it coming from?”
“There are real dangers to both overbuilding and underbuilding, and trying to figure out how do we deal with that kind of uncertainty and load forecasting, I think, is one of the most important issues in front of us,” See added.
The industry is considering several alternatives to dealing with forecasting uncertainties, including requiring more collateral to ensure the viability of projects, See said. This is an idea discussed by, for example, the Bonneville Power Administration as it plans to overhaul its interconnection process. (See Utilities Back Some BPA Transmission Updates, Hesitate on Others.)
“I think that there’s a lot of really important solutions that are being discussed,” See said. She noted FERC may not always be able to mandate those solutions, but the agency can facilitate information sharing between entities and function as a “central repository to help encourage that conversation. I think that’s critical.”
In a separate panel at the CREPC-WIRAB conference, Chang also discussed the letter. She said forecasting is made more difficult when load projections can each produce different results, and that the “uncertainty span is huge.”
Chang noted that data center developers are shopping around for good deals, which can further complicate load forecasting. For example, a developer could discuss a project with Arizona utilities while simultaneously having conversations with utilities in Iowa, “and you wouldn’t know that,” Chang said.
“I think it takes some time for us to actually see the trends and to see how much load materializes,” Chang said. “I think the goal of that letter is to really encourage RTOs — and it starts with RTOs — to kind of say, ‘how are you looking at these uncertainties? Are there sort of best practices, are there ways that can be shared across regions?’”
FERC’s role, Chang said, is to “lay the rules of the road” and clarify regulations on how to efficiently build out the infrastructure needed to meet the challenges.
“This is a new challenge,” Chang said. “I don’t think it’s the first time we have large loads, but I think it is the first time we have these very large loads, localized in certain areas and with a fast pace.”
See and Chang both emphasized transparency, with See saying that information sharing between regions around calculating reserve margins and emergency protocols “is really important as we’re having this broader conversation.”
Chang also said that the challenge is to build enough resources when costs are high and labor and material supply chains are constrained.
“I think it is important to make sure that the signals are aligned with the needs to make sure that we are very clear and transparent about how the resource adequacy criteria are set,” Chang said.
