Future-Proofing the Grid: How Smart Transmission Planning Can Meet Soaring Demand.

You can’t open the Wall Street Journal, New York Times, or Washington Post – let alone trade press – without seeing screaming headlines about artificial intelligence and data farms and how they threaten to devour the grid with their voracious appetites for power. And rightfully so – power demand forecasts have increased by 81% as result of various new technologies, which should, for the sake of national commerce and national intelligence, be located in the United States.

Transmission planning rules are beginning to take root that will eventually provide for a grid that can accommodate such demand, but in the meantime, some arrangements to co-locate “hyper-scalers” with generation facilities have come before the Federal Energy Regulatory Commission – and been rejected.[1] According to the Commission’s order, arguments about standardized rules to avoid preferential treatment and unforeseen impacts on neighboring customers were not satisfactorily answered, and so a narrow 2-1 majority with 2 recusals rejected the application.

But the arguments are not going to go away. FERC noted in its order that there were questions about how the load was served when the dedicated generation blinked – possibly through reliance on the grid – and that customers that receive benefits from the grid should pay related rates; protestors argue “that the Commission has long resisted customers’ attempts to allocate only portions of their load to the transmission system or to evade transmission fees based on unique or intermittent usage of the transmission system.”[2] Beyond the specific arguments in this particular case, the larger policy lesson is that building out separate two grids is simply not cost-effective or practical. Instead, we must plan for and build a modern electric grid capable of reliably meeting future electricity demand from all of its customers.

As FERC looks to implement Order No. 1920, it must require robust forecasting of load. Concern has been expressed that not all load is guaranteed to be developed, in the same way that not all generation is built; that is a fair criticism. However, the Commission has found ways to ensure that commercially-viable generation, that is, generation that is not speculative, is accounted for. The same must be done for interconnection of new large-load customers.

Additionally, greater effort must be put into developing robust and accurate forecasting of load – considering anonymization and aggregation to address commercial sensitivities – in transmission planning. FERC’s NOPR on transmission planning was developed before the dawn of massive new energy demands, but it does require that transmission planning account for load growth, and implementation should be strengthened according to the magnitude of the new demand. For example, California has an agency focused on, among other things, forecasting load – the California Electric Commission – separate from the agency focused on generation, the California Public Utility Commission, and the planning conducted by transmission operator, the California Independent System Operator; a memorandum of understanding between the three provides for close coordination and collaboration. Every regional transmission planner would benefit from a similarly robust load forecaster to inform its transmission planning, pronto.

Because while FERC debates the best way to power these new facilities, the fact remains: 

“We are on the cusp of a new phase in the energy transition, one that is characterized as much by soaring energy demand, due in large part to AI, as it is by rapid changes in the resource mix.  Ensuring reliable and affordable supplies of electricity throughout the coming period of increasing demand and changing supply will require pragmatic leadership that facilitates that transition.  If we instead throw up roadblocks to that transition, … we will only deprive our country of the resources needed to ensure our continued economic prosperity and national security.”[3] 

FERC should do more to ensure that transmission planning is sufficiently robust and occurs quickly enough to meet the need and allocates costs to those who benefit from the infrastructure. America needs a grid to power America.