Regulator Targets Faster Power Grid Access for Data Centers
The Federal Energy Regulatory Commission (FERC) has directed regional electric grid operators to reform processes related to connecting data centers and other large sources of power demand to the electric grid. The action is aimed at speeding up the buildout of data centers and reducing costs, according to The Hill.
FERC is the nation’s federal energy regulatory body and has jurisdiction over interstate power transmission. It’s made up of five commissioners, currently three Republicans and two Democrats.
“We are charting new territory and setting the standard for how America will responsibly and efficiently integrate large energy loads into the bulk electric grid while protecting consumers,” said FERC Chair Laura Swett. “My takeaways from the hyperscalers were … that the rules aren’t clear, and the markets aren’t going fast enough.
The Republican FERC Chair said the new orders require regional grid operators to show they have adequate safeguards to prevent costs from shifting to consumers, or to take steps to create them. The commissioner also said FERC is preliminarily directing operators to “provide unprecedented transparency” to allow states to use information to set electricity rates.
Swett acknowledged the commission’s authority to protect ratepayers is limited and called on states to take further action. “We call on our state counterparts to finish the job,” Swett added, notes The Hill.
The AI industry has pushed to rapidly build new data centers to support the development of the technology, which requires vast computing power. Data centers therefore use a lot of electricity and are, in many cases, increasing electricity demand. This creates both cost and grid reliability concerns, Inside Towers reported.
Americans have become increasingly wary of data centers and how the server warehouses will impact their electricity prices. Power costs continue to rise and were up 5.9 percent year over year in May.
Major tech companies attempted to quell these concerns, signing on to a White House pledge earlier this year to cover the full costs of bringing new data centers online and prevent ratepayers from facing price hikes, Inside Towers reported.
In the face of rising demand from large facilities like data centers, Senator Cynthia Lummis (R-WY) has proposed legislation to clarify that FERC has jurisdiction over how massive electricity users connect to the grid. It also directs the agency to create a standardized process for such interconnections.
By Leslie Stimson, Inside Towers Washington Bureau Chief
