U.S. Senator Martin Heinrich, Ranking Member of the Senate Energy and Natural Resources Committee, questioned experts on Mar. 25 about expanding transmission lines and efficiently powering data centers to help lower electricity costs for consumers.
The hearing addressed concerns about whether enough interregional transmission is being built to meet rising energy demand and how best to avoid passing additional costs onto consumers. Heinrich asked panelists Dr. Liza Reed of the Niskanen Center, Travis Fisher of the Cato Institute, and Todd Snitchler of the Electric Power Supply Association for their views on these challenges.
Heinrich opened by asking if current efforts are sufficient: “Do any of you think that we're building ... enough interregional transmission to service the existing grid and the kind of growth that we would hope for both the electric sector and the economy?” Dr. Reed responded, “We are not building the amount of interregional transmission that we need right now, and there are particular barriers that are preventing that from happening. Utilities are not incentivized or even expected to be looking to their neighbors, and so we are losing the economies of scale, and that is costing consumer purses.”
Fisher agreed with this assessment: “My short answer is no... We should look back at the history of ... FERC Order 1000 ... The intent was good, but the track record is very poor.” Snitchler added that moving electricity where it is needed ensures reliability: “That's how we ensure grid reliability...the importance of that transfer capability continues to be highlighted as an area of importance.”
Heinrich also discussed ways to develop transmission projects in ways that provide value for customers rather than increasing rates. Dr. Reed said delays stem from complex approval processes at individual states rather than a unified federal approach: “This is duplicative red tape that discourages developers... There are also not expectations at utilities to be looking to regions...” She noted high voltage direct current technology could improve stability while providing long-distance power transfer.
Addressing incentives for utilities regarding grid-enhancing technologies (GETs), Heinrich asked how policy could encourage better use without defaulting only to large-scale projects. Dr. Reed suggested Congress or FERC set higher expectations for line usage through advanced technologies such as dynamic line rating or power flow control.
The discussion turned toward powering data centers efficiently without shifting costs onto ratepayers. Dr. Reed stated: “I think the most efficient use of capital to power data centers is the choice of the data centers themselves,” emphasizing robust grids give companies more options while benefiting all users by spreading infrastructure costs among more participants.
