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 pressing for more information on FERC’s ability to address the growth in electricity demand, particularly from the rapid growth of AI data centers.

KEY LETTER EXCERPT:

“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. 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.

"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 the NERC has repeatedly raised concerns over the adequacy and reliability of the grid. These risks are due to a confluence of factors, including state and federal policies that have forced premature retirements of reliable generation without adequate replacement generation resources and electric infrastructure. FERC’s recent summer assessment lists data center demand growth as a driver for increased demand while acknowledging that supply shortages are possible this summer.”

BACKGROUND:

• The Energy and Commerce Subcommittee on Energy, Climate, and Grid Security held a hearing on June 4, 2024 to discuss the energy demands of emerging technologies, like Artificial Intelligence, and how to ensure that America continues to be a technological leader.
• Some experts project a ten-fold increase in the growth rate of new power demand, compared with the past decade.
• Data centers that process AI and digital transactions are a major driver of this increase in demand.
• Biden Administration actions, like the Clean Power Plan (CPP) 2.0, are accelerating the retirement of baseload power sources, which are essential for providing the 24/7/365 energy needed to power our technological future.
• E&C Republicans led a join resolution of disapproval on June 5, 2024 to halt President Biden’s CPP 2.0 which will shut down critical baseload energy generation.
• 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.

The Chair requested the FERC Commissioners provide the following information by July 30, 2024:

1. Explain what FERC is doing to assess the challenges of this new demand growth from data centers and industrial sectors.
2. Explain what options FERC is considering to address this new demand growth to assure reliable, affordable delivery of power in the FERC regulated markets.
3. What effect will demand growth have on capacity prices? Are the FERC jurisdictional wholesale markets prepared to withstand retirement projections and coinciding demand increase projections?
4. The potential for co-locating data centers or industrial loads presents the risks of taking baseload, reliable generation off the grid at the expense of ratepayers.
5. Is FERC monitoring the potential for merchant generators to enter into behind-the-meter agreements with data centers?
6. What actions is FERC considering to address the incentives and impacts of any loss of load due to out-of-market financial arrangements?
7. If state and federal policies do not adjust to preserve adequate baseload generation, how will the growing demand for reliable energy add additional costs and strain to our grid?

CLICK HERE to read the full letter.