NE Washington News

Washington D.C. — In a letter to the Federal Energy Regulatory Commission (FERC), House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC) are seeking detailed information on FERC’s capacity to manage the increasing electricity demand, particularly driven by the expansion of AI data centers.

"After years of minimal growth, electricity demand in the United States is projected to grow nationally at a significant pace through the end of the decade," states an excerpt from the letter. "It is anticipated that much of this demand growth will come from a surge in the number of data centers and the growing uses of artificial intelligence (AI) by data centers, onshoring of industry and manufacturing, and increased electrification. Estimates show annual growth of 5 to 6 percent through the end of the decade, a tenfold increase in the growth rate from current levels. By the end of the decade, data centers, which are driving increases in electricity demand, could consume as much as 9.1 percent of all electricity in the United States."

The letter highlights concerns over grid reliability amid rising energy demands: "Unlike many sources of demand that consume electricity at a lower energy density, data centers consume large quantities of power at a near constant level throughout the year. This surge in demand for reliable and dispatchable baseload generation comes at a time when NERC has repeatedly raised concerns over the adequacy and reliability of the grid."

In June 2024, The Energy and Commerce Subcommittee on Energy, Climate, and Grid Security held a hearing addressing energy demands posed by emerging technologies like Artificial Intelligence. Projections indicate a substantial increase in new power demand compared with previous decades.

The Biden Administration's Clean Power Plan (CPP) 2.0 has been identified as accelerating retirements of essential baseload power sources. On June 5, 2024, E&C Republicans led a resolution to halt President Biden’s CPP 2.0.

Chair Rodgers previously criticized EPA rules that threaten American energy infrastructure: “Chair Rodgers and Carter released a statement on April 25, 2024 blasting the EPA’s devastating power plant rules that would shut down American energy.”

Rodgers and Duncan have requested FERC Commissioners provide specific information by July 30, 2024:

- An assessment of challenges posed by new demand growth from data centers.

- Options being considered to ensure reliable delivery within FERC-regulated markets.

- The impact on capacity prices due to growing demand.

- Monitoring potential behind-the-meter agreements with data centers.

- Actions addressing incentives related to loss-of-load due to out-of-market financial arrangements.

- Potential cost increases if state and federal policies fail to maintain adequate baseload generation.

Further details can be accessed through their official communication channels.