WASHINGTON — Even as President Donald Trump and the new Republican-controlled Congress begin to roll back the clean energy policies of the Biden administration, the grid still needs to expand to meet new demand and become more resilient to extreme weather, state regulators heard last week.
Democrats tried to pass numerous transmission “permitting reform” bills last Congress to help realize the clean power investments in the Inflation Reduction Act, and that has impacted the partisan split on the subject. But now that demand is growing at a pace not seen in decades from data centers, the need to expand the grid goes beyond connecting renewable resources that are far from cities.
“We’re trying to solicit as many comments as we possibly can so that we can get this right, because it’s going to be threading a needle between the Republicans and the Democrats,” Sen. Shelley Moore Capito (R-W.Va.), chair of the Senate Environment and Public Works Committee, said at the National Association of Regulatory Utility Commissioners’ Winter Policy Summit. “There’s certain things that I might want that I’m going to fight hard for. There’s certain things, particularly on the transmission side, that the Democrats want. We’re going to try to marry those up and make an effective and long-lasting permitting.”
“There’s a lot of voices making that connection: that companies are looking for electrons,” Clean Energy Buyers Association Senior Director Bryn Baker told reporters Feb. 26 in a webinar on the state of transmission policy under the Trump administration and the new Congress. “And that there are economic advantages to those states and regions that are proactively planning for transmission, and that’s fundamental to getting those industries sited and built here.”
Serving the new loads from data centers, which are being built out by some of CEBA’s members, will require all kinds of investment in transmission, from interregional lines to reinforcing the existing system with grid-enhancing technologies and advanced conductors.
“I think transmission is kind of under that umbrella of energy infrastructure,” Americans for a Clean Energy Grid Executive Director Christina Hayes said on the webinar. “We’ve heard a lot more clarity under Secretaries [Doug] Burgum and [Chris] Wright [head of the departments of the Interior and Energy, respectively] talking about the importance of the backbone of the grid.”
Four years ago, predictions for demand growth were flat in most of the country, and AI was more of a vague concept for science fiction novels than it was a reality both on app stores and in the physical world, she said.
“The growth of data centers and artificial intelligence is driving up energy demand in ways we have not seen in decades, making transmission reform even more critical,” Hayes said. “Despite significant discussion about energy policy, we still need more definitive action, especially if we want to meet our projected energy demands.”
Even without hyper-scalers driving demand to new levels, the power system needs to be adequately maintained, and Exelon CEO Calvin Butler said that requires some spending. He recalled that before his company bought Pepco, the utility was running about a 6.4% return on equity and was in the fourth quartile for reliability.
“The utility wasn’t meeting its obligation to provide strong customer service and strong reliability,” Butler told NARUC during a panel on capital markets Feb. 25. “What we have recognized as a company [is that] operations and high customer satisfaction are foundational elements. We have to do that well before we can come to you and talk about our long-term strategy.”
By 2021, Exelon had gotten Pepco’s ROE up to 9.4% and its reliability improved by 50%, which involved investing in the underlying infrastructure needed for reliable and resilient service, Butler said.
In a panel Feb. 24 at NARUC on mutual assistance during extreme weather events, Southern Co. CEO Chris Womack said his firm was ready to meet demand from new sources thanks to the amount of investments it has made in its system, including new generation.
“With the careful oversight of our state regulators, elected officials, customers and shareholders, we have designed and engineered a remarkably flexible, resilient and affordable system,” Womack said. “We recently added new nuclear generation and now can dispatch in the largest nuclear station in America at Plant Vogtle.”
The Trump administration’s goal is for “energy dominance,” which Womack said translates to energy abundance that is important to meeting the new loads coming online in Southern Co.’s utility territories.
“Both energy dominance and energy abundance require a safe and secure energy grid, and thankfully, our nation’s power grid is up to that challenge,” Womack said. “It is advanced; it’s flexible and is integrated in a way that allows us to rely on each other day to day.”
Wildfires are becoming more common in Oregon, Portland General Electric CEO Maria Pope said. Devastating fires in California last decade caused its northern neighbor to start considering how the events could impact its utilities back when they were rarer, which proved prescient as Oregon saw more acres burn than any other state or Canadian province in 2024.
Now wildfires are so common, Pope argued that regulators need to insulate utilities from potentially devastating litigation as long as they can prove they followed a set of best practices, which would be similar to legal defenses against medical malpractice.
“Until we have something like that across this country, we’re going to continue to have economic hardship on the utilities,” Pope said. “Wildfire is an example. Like all the storms we’re talking about here, disasters are society-wide problems, and they need a society-wide solution, not just the backstop of a utility and the devastation that that brings the utility’s balance sheet.”
