Advocates for Consumer Regulated Electricity @A4CRE

I asked ChatGPT to identify which country has the most successful and vibrant oil industry and which country has the most successful electricity industry. Here is its assessment of the U.S.: “The United States has the world’s most vibrant oil industry because it allows many private actors to take risks, innovate, own assets, contract freely, and respond to market signals. The United States does not have an equally vibrant electricity industry because too much of the sector is still organized around monopoly franchises, regulatory permission, utility planning, and socialized cost recovery.” Consumer Regulated Electricity (CRE) is state policy that can change the direction of the electricity industry. cato.org/briefing-paper…

Isn’t the point of our continuously larger grid is that it becomes more and more reliable? It seems we’ve finally come to the end of that road. Off-grid systems are generally considered less reliable albeit much faster to build. If an off-grid system could scale like a utility, the reliability would improve with each added customer, just the way the grid is supposed to work. No need to worry about flexibility plus speed all in the same system. That’s Consumer Regulated Electricity (CRE). utilitydive.com/news/data-cent…

Excellent analysis of the value of speed and control. One glaring omission is something I can’t stop talking about: the policy risk that comes with a grid connection We have taken for granted that the federal executive branch favors data centers. What if that flips in Jan 2029?

Dylan Patel @dylan522p

6 days ago

People don't quite understand how many behind the meter power generation assets are being built for datacenters because the US Grid sucks, despite the higher cost and complexity.

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Loan guarantees is the solution to a misdiagnosis of the problem. Hyperscalers and AI businesses aren't lacking for capital. Why is the nuclear sector? That's the problem to be solved. Government money will flow to those developers that are most focused on government money and less focused on the business itself. That doesn't set us up for success. Lastly, why is it that people who understand the importance of markets that are unfettered by government involvement seem to throw that understanding out the window when it comes to the electricity sector?

People are excited about the DOE loan guarantees, and I get it. We need a ridiculous amount of electric energy right now But the long view might suggest restraint, because each new intervention in energy markets begets more intervention. Where will it end?cato.org/blog/trumps-en…

AP story: Travis Fisher... said the Energy Department has the authority to issue these loan guarantees, but he doesn’t think the executive branch should be so heavily involved in the electricity sector apnews.com/article/nuclea…

My article on US grid capacity for @WorksInProgMag is out! I argue that grids can grow faster by prioritizing connecting the highest-value power plants and flexible power users. worksinprogress.co/issue/why-amer…

Data centers should bear the costs they impose, compete without subsidies, & operate within the same rules as everyone else. What concerns me is the growing tendency to treat data centers as a unique policy problem requiring government intervention at every turn. Markets, not politicians, are generally better at determining where investment, power generation, & infrastructure should be built.

Greg Abbott @GregAbbott_TX

a week ago

Data centers must bring their own power, they must reuse their own water, and they must reduce electricity costs for residential and small business customers. We will slash incentives and protect Texas neighborhoods. Those are bottom line expectations.

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@patrickrooney What if the best incentive is the promise that, in *our* state, you can focus on your tech business and not get pulled into the political sh!tstorm that is the public power grid? cato.org/briefing-paper…

@AndrewBurchwell Extra bullish on states that allow large customers to go off-grid (for any reason) Main reason used to be to avoid interconnection queues and costly grid upgrades New reason is to avoid the impossible politics of both the grid and data centers Best reason is to be innovative!

“The better answer is not a national data-center tollbooth managed by FERC; it is freer contracting, cleaner cost causation, and more ways for large loads to build or buy their own power outside the legacy utility maze. Right now everyone thinks data centers are politically vulnerable enough to kick around and maybe shake down a little. Data centers should take the lesson: remove themselves from the worst parts of the market where possible, push hard for Consumer Regulated Electricity, behind-the-meter generation, and other arrangements that let private capital build private power without asking the entire rate base for permission.” gridbrief.com/p/firstenergy-…

“The shale revolution shows how resourceful we can be. Not long ago, experts confidently argued that the US was running out of economically recoverable oil and natural gas. Then, entrepreneurs and engineers transformed global energy markets through hydraulic fracturing and horizontal drilling. Rather than continuing our slow decline in oil and natural gas production, the US now leads the world. The important lesson is more philosophical than technical. The shale revolution was not centrally planned into existence. It emerged from decentralized experimentation, private investment, risk-taking, and a government that respects property rights and otherwise gets out of the way. In other words, it emerged from the exact kind of society Simon believed produced human progress.” cato.org/blog/doomslaye…

“Allowing or even encouraging data centers and other large loads to develop their own private grids could help address several pressing problems. First, it could insulate other customers from potential rate increases associated with utilities building infrastructure to serve data-center loads. In a fully private grid that remains physically and electrically separate from the broader system, none of the direct costs of generation or its related infrastructure could be allocated to the broader public grid and its customers. …Second, establishing a private grid could enable large loads to avoid or streamline many of the regulatory requirements that apply to traditional electric utilities, which often slow infrastructure development.” energyanalytics.org/research/ameri…

Trump’s ratepayer protection pledge is a good idea, but the entities responsible for retail rates didn’t sign it If we want to hold utilities accountable, they should sign the pledge, along with public service commissions Private grids also solve this problem, by the way!

Governor Jeff Landry @LAGovJeffLandry

2 weeks ago

.@Entergy promised me that when they took @Meta on as a client, they would not be passing costs onto rate payers. The PSC should not allow anyone to take advantage of power markets at the expense of our ratepayers.

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We applaud FERC’s recognition that the large-load challenge cannot be solved through business-as-usual. Its action rightly pushes the grid operators toward faster studies, clearer cost responsibility, and protection against transmission cost shifting among other things. But speed cannot be the only objective. Some large loads may create reliability risks that go beyond the question of whether enough generation exists on paper. That is where Consumer Regulated Electricity (CRE) fits: FERC can improve the rules for large customers that connect to the grid, while CRE gives states a complementary path for customers willing to build and pay for independent power systems that keep their costs, risks, and operational consequences off the existing grid and away from ordinary ratepayers. ferc.gov/news-events/ne…

Governor Abbott said data centers should add to Texas’ electric capacity, pay their own infrastructure costs, protect local communities, and reduce the burden on residential ratepayers.  "Bring Your Own Power" (BYOP), a version of CRE customized for Texas, is a simple and practical way to help meet that goal. (1) BYOP makes it straightforward for data centers to add capacity.  A data center choosing a BYOP power supplier will eliminate any chance of burdening capacity serving captive residential ratepayers. (2) BYOP also makes it straightforward for data centers to pay all electric infrastructure costs: interconnection, transmission upgrades, distribution upgrades, reliability impacts, congestion impacts, planning costs, and other grid costs caused by the new load.  The cleanest way to avoid cost-shifting is to let new large loads build or contract for new islanded power systems that do not depend on the regulated grid. (3) BYOP will provide faster solutions for the data centers than waiting on the PUC, ERCOT, and the utilities.  Faster solutions mean Texans experience the economic benefits from data centers sooner. (4) BYOP developers will be able to experiment in ways that the PUC, ERCOT, and the utilities cannot.  Some successful BYOP experiments will discover new ways to reduce costs and improve service, which ERCOT and the utilities can then implement. (5) BYOP protects and simplifies the work of the PUC, ERCOT, and the utilities.  If every data center is forced onto a shared grid, the PUC, ERCOT, and utilities inherit the planning, reliability, congestion, and cost risks associated with the new load. gov.texas.gov/news/post/gove…

@reindsummit @robert_ivanhoe @IvanhoeMines_ Sounds like there’s a need for an open market, unconstrained by the past century of grid policy and design, and one that can design and build using 21st century thinking, technology, and recognizing 21st century challenges. That’s CRE.

18% of Americans said they oppose data centers in their local area because of “Energy consumption/Excess power usage/Grid constraints” and 15% said they oppose them because of “Higher utility bills/energy costs”. CRE is a tool that can help alleviate the concerns. CRE makes it easier to build off-grid systems and that can be attractive to data centers. The more data centers that choose off-grid systems, the lower the concerns listed above. news.gallup.com/poll/709772/am…

“While a vast majority of Houston-area residents (85%) utilize AI, nearly 63% oppose the construction of data centers within one mile of their homes due to overwhelming concerns regarding power grid reliability and energy demand.” CRE is one tool that can help. Making it easier to build off-grid power systems can reduce residents’ grid reliability and demand worries. uh.edu/news-events/st…

@ShanuMathew93 The regulatory compact was: legal monopoly over a service territory if you serve all customers at regulated, just and reasonable rates If you can’t serve all customers at reasonable rates, why should you keep your monopoly privilege? Here’s my proposal cato.org/briefing-paper…