The volatility of supply and demand straining the U.S. bulk power system is generally accepted as the Senate Energy and Natural Resources Committee continues to work on permitting legislation. How to address that imbalance drew varied testimony in a March 25 hearing.

“This hearing is one of the series on the importance of permitting reform to inform our committee’s deliberations on the challenges facing the nation’s bulk power system and what Congress should do to address them,” Chair Mike Lee (R-Utah) said to open the hearing.

The imbalance is the result of power plant retirements made when demand growth was flat. Demand has surged because of the addition of large loads like data centers.

“These are structural changes in our economy that require really large amounts of electricity around the clock,” Lee said. “Our grid was designed to meet peaks most of the time. It operates with excess capacity, but that cushion is shrinking. In some regions, the margin is already gone.”

Ranking Member Martin Heinrich (D-N.M.) agreed the grid is straining due to rising demand but argued some Trump administration policies are not helping.

“This imbalance has led to electricity bills rising by as much as 13% since President Trump took office,” Heinrich said. “These rising costs made worse by the administration’s fossil-only agenda, which includes propping up uneconomic coal plants, stalling 116 GW of new capacity from coming online, canceling clean energy projects and starting a war with Iran that is driving up oil and gas prices.”

Demand is rising, but exactly when and where the new large customers will show up is far from certain, said Todd Snitchler, CEO of the Electric Power Supply Association.

“This uncertainty is perhaps the greatest risk for both reliability and affordability for electric consumers because of the danger of either over- or under-producing capacity during a time of volatile demand projections,” he added.

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That risk can be minimized by using competitive wholesale energy markets, encouraging bilateral or co-located agreements, improving load forecasting, passing a permitting law and recognizing that much of the recent increase in prices is due to state policies and regulations, Snitchler said.

“When competitive power suppliers, like our members, invest in generation assets, they do so without guarantees for cost recovery and an approved rate of return,” Snitchler said. “The risk of investing in those generation resources remains on the developers and owners of the plants and not the ratepayer.”

Travis Fisher, Cato Institute director of energy and environmental policy studies, said Congress should embrace competition, arguing that federal policy has fallen well short of that.

“I very much agree with a 2002 book by Cato that referred to the mandatory open access model of transmission, which is basically what we’re dealing with now, which is the restructuring — I wouldn’t call it deregulation —  restructuring from the late 1990s, referred to that as ‘infrastructure socialism,’” Fisher said. “Now that is, I think, a fair way to characterize the public grid. That’s why I’ve been advocating today for a new parallel path to allow private grids.”

The growth in artificial intelligence data centers and advanced manufacturing is a sign of an expanding economy, but the grid cannot keep up. Consumer-regulated electricity can meet that demand quickly without overburdening other consumers, Fisher said. (See GOP Senator Introduces Bill to Let Large Loads Set up Consumer Regulated Utilities.)

“The idea is straightforward: allow new large-scale customers, like data centers, to develop off-grid power systems under voluntary contracts,” he said. “These systems would be physically separate from the existing grid. That means no interconnection delays, no reliance on congested transmission networks, and importantly, no shifting of costs or risks onto existing ratepayers.”

The best way the committee can help the grid meet rising demand is by expanding the power grid, said Liza Reid, Niskanen Center director of climate and energy policy.

“We are building a more diverse set of energy resources at the same time: gas, nuclear, wind, solar, geothermal and storage,” Reid said. “But no single resource is sufficient on its own. Reliability depends on how these resources work together, and transmission is what allows that coordination to happen and ensures that every American has access to that affordable power.”

The bulk power system is made up of regional grids, with limited transfer capability between them, which has been illustrated in recent winter storms when one region is facing tight conditions while its neighbor operates normally.

“Interregional transmission lines are in the national public interest because of these affordability and reliability benefits that they provide, yet they face much higher siting and permitting barriers than other energy infrastructure, because the authority to prove approve interstate projects still rests largely with the states or even sometimes counties,” Reid said.

A shortage of grid capacity is the primary barrier to AI in the country, and without a dominant grid, the technology will develop faster elsewhere, she said. Congress can help deliver that grid with permitting legislation, she added.