WASHINGTON — Data centers’ demand and speed-to-power prerogatives continue to dominate discussions in the electric industry, but some commonsense policy answers are starting to emerge, two FERC commissioners said recently.

More state regulators are adopting large load tariffs that address the challenges brought up by the new customer classes, FERC Commissioner Judy Chang told the American Clean Power Association’s Interconnection Summit on Feb. 11.

“The states and the regulatory commissions are at the forefront of dealing with how to connect new load and how to serve them, and how to ensure that those services also protect other customers,” Chang said. “So, I think again, back to alignment: I feel like we are very much aligned in the goal of meeting the need of this growth while protecting customers.”

Utilities are starting to integrate the new large loads in a way that protects residential customers and other businesses from higher power bills, Commissioner David Rosner said.

“My perspective is, we can walk and chew gum,” Rosner said. “There are some hard questions to ask, but when you have 13 governors from PJM all getting on the same page with the White House, when you have the questions that we got from Congress, I think [that] indicates support for the kind of commonsense arrangements that we’re starting to see more and more of. I think that’s good.”

The two were speaking just after NARUC’s Winter Policy Summit had ended and about a week after FERC commissioners appeared in front of the House Energy and Commerce Subcommittee on Energy. (See FERC Oversight Hearing Focuses on Affordability and Reliability.)

When it comes to FERC’s role, both commissioners have highlighted the need to improve grid planning, with Rosner bringing up PJM’s Reliability Resource Initiative, which sought to fast-track dispatchable resources, including a natural gas plant in Ohio.

“It had an upgrade cost of $1.2 billion, which included something like over 150 miles of either new or reconductored or rebuilt 345-kV transmission,” Rosner said. “And then if you look down the list, that’s the most extreme example, but there’s, I think, about a half a dozen examples of $400 million upgrade costs for things like batteries.”

FERC has spent plenty of time implementing changes to the generator interconnection queues, but it has work left to do on the transmission side, Chang said.

“Even if we can do the studies faster — even if we can use AI and simultaneously do multiple scenarios and then filter out which resources need to connect where and how much upgrades — we still need to upgrade the system,” she said.

The example of the Ohio natural gas plant shows that the grid is not ready to integrate the new loads and the generation they require, Chang said, but Order 1920 should improve things.

“I think the 1920-style of forward-looking transmission planning — figuring out and getting the states into the room to agree on ex ante cost allocation — those are all the planning steps that are necessary, and it’s even more urgent now than it was when we just started on this commission,” Chang said. “So, I think again, this is all a package deal. You can’t just solve the interconnection issue without figuring out the transmission issue.”

SPP CEO Lanny Nickell has been in the industry for 34 years, and even before large loads took over the conversation, he said he was seeing changes unlike anything he had witnessed. Speaking on another industry panel a couple of years ago, when the focus was on the transition of the generation fleet to clean power, the moderator asked participants to be more positive.

“When they turned to me, I said, ‘Well, I’m positive, absolutely positive, that I’m more nervous now than I’ve ever been in my career,’” Nickell said.

Now with large loads exacerbating pre-existing resource adequacy issues, the industry must figure out how to serve the new customers in a way that does not deteriorate reliability even more. SPP’s answer is its High Impact Large Load (HILL) service, which was recently approved by FERC. (See FERC Approves SPP Large Load Interconnection Process.)

“If the large loads are willing to bring the generation with them, either co-located or no more than two buses away, they can be studied together in 90 days or less, so you don’t have to go through the generator interconnection queue,” Nickell said. “And I know that that could create issues in the queue.”

The requirement that paired generation be no more than two buses away means any large load customers that use the process will be less likely to impact the queue, he said. Now SPP has a pending proposal at FERC for conditional HILL service, where flexible large loads paired with generation can get connected quickly.

“We think that’s also a very innovative speed-to-power solution,” Nickell said. “You don’t have to wait for transmission, which we all know takes a long time to get built.”

The rising demand from large loads has shown its impact on the wholesale market in PJM like nowhere else, which led to the aforementioned meeting at the White House with 13 of the region’s governors. (See White House and PJM Governors Call for Backstop Capacity Auction.)

Their calls to help large loads integrate are in line with ideas endorsed by PJM’s Board of Managers, said Asim Haque, the RTO’s senior vice president of governmental and member services. When supply and demand are out of whack, either new load needs to be stopped from coming online, or more generation needs to be added. Policymakers in PJM prefer the latter, he said.

“We have to say to ourselves, ‘How do we get a lot more supply on the system to meet this incredible influx in demand?’” Haque said.

In vertically integrated states like Virginia, the integrated resource plans should keep up with demand, but the rapid growth there has left it increasingly reliant on imports, Haque said. “In our restructured jurisdictions, that is a more dynamic issue to try and solve.”

The RTO is working on a backstop capacity auction to close the gap of 8 GW from its last Base Residual Auction, but stakeholders are still working out the details. That is the short-term plan, but over the long term, PJM will take a holistic look at its markets to ensure they are aligned with the industry’s investments needs.

“We need to look at this and determine whether or not our markets are actually collectively signaling the right incentive opportunities for new supply,” Haque said.