{"id":363951,"date":"2025-01-30T08:39:56","date_gmt":"2025-01-30T07:39:56","guid":{"rendered":"https:\/\/climatescience.press\/?p=363951"},"modified":"2025-01-30T08:39:57","modified_gmt":"2025-01-30T07:39:57","slug":"free-enterprise-zone-for-electricity","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=363951","title":{"rendered":"\u2018Free Enterprise Zone\u2019 for electricity?"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From Master Resource<\/a><\/p>\n\n\n\n

By Kennedy Maize<\/em><\/p>\n\n\n\n

\n

\u201cUnder the proposed deregulation plan, data centers would not need to worry about grid reliability to keep their business running. The two parties can make their own reliability arrangements, involving engineering (underground connections, backup generation, storage or through contract provisions).\u201d<\/p>\n<\/blockquote>\n\n\n\n

Data center madness due to artificial intelligence (AI) struck the U.S. Last week. President Donald Trump kicked it off with a strange White House session<\/a> January 21, as AI gurus announced a $500 billion plan (scaled up from an initial $100 billion bet) to use private money for a veritable plethora of data centers across the entire U.S. The moniker was \u201cStargate,\u201d not to be confused with \u201cWatergate.\u201d<\/p>\n\n\n\n

Joining Trump at the White House meet-and-greet were Open AI founder Sam Altman, Oracle founder Ellison, and SoftBank CEO Masayosh Son. They would find the money, not ask the government for it.<\/p>\n\n\n\n

Would it come from Saudi Arab? Saudi crown prince Mohammad bin Salman (aka \u201cMohammad bone saw\u201d) reportedly told Trump in a phone <\/a>call last week that his kingdom was looking to invest $600 billion in the U.S. in the next four years.<\/p>\n\n\n\n

What\u2019s the U.S. role? Prior to the meeting, Trump repealed a 2023 Biden executive order<\/a> aimed at preventing some of the AI\u2019s possible downsides, including infringements on civil liberties and privacy and threats to national security.<\/p>\n\n\n\n

AI Promise \u2026 and Electricity<\/strong><\/p>\n\n\n\n

AI may have enormous promise. It may be able to solve intractable scientific and engineering problems or cure cancer and the heartbreak of psoriasis. So far, it\u2019s chief ability appears to be providing effortless term papers for high schoolers and undergraduates.<\/p>\n\n\n\n

Business interests that make profits when their costs increase \u2014 regulated electric utility companies \u2014 love AI, because of the need for power-sucking data centers. Demand for electricity has been slow or declining for decades. Many more electric intensive data centers \u2013 already being constructed to serve cryptocurrency \u201cmining\u201d \u2014 could reverse that long-term trend.<\/p>\n\n\n\n

The irrational exuberance for data centers raises important questions. The fragile U.S. electric grid is at risk. A sea of data centers could crash the grid<\/a>. Adding electric demand might increase consumer electric rates<\/a> across the board. What\u2019s to prevent overbuilding, leaving consumers paying the bills? What impact will quantum computing have on data centers? As the always clear-headed Dan Yurman, proprietor of Neutron News, observes<\/a>, \u201cA question is whether the AI revolution in the US will really have the customer base to justify this level of investment.\u201d<\/p>\n\n\n\n

Who will regulate the data center surge? State utility regulators? The Federal Energy Regulatory Commission? So far, both are involved. A divided FERC in November rejected a plan by independent generator Talen Energy to snuggle up next to an existing nuclear power plant to build a data center. The plan crashed<\/a>. FERC concluded it couldn\u2019t understand how it would impact the PJM transmission grid.<\/p>\n\n\n\n

In Virginia, a data center wonderland pleasuring the incumbent monopoly utility Virginia Electric and Power Co. (aka Dominion Energy), a backlash is occurring. In the Old Dominion, a swath of installations in Loudoun County not far from D.C. has developed. In June, residents of Loudoun, the state\u2019s second largest political jurisdiction, ousted the top elected official after she led the board of supervisors to approve a 2,000-acre farmland rezoning to house more data centers.<\/p>\n\n\n\n

More recently, the 2025 session of the Virginia General Assembly<\/a> faces a series of bipartisan bills looking at energy and water consumption, land use and location, among other issues. Lame duck Republican Gov. Glenn Youngkin, once a data center enthusiast, is waffling. He\u2019s suggesting the issues should be up to local authorities.<\/p>\n\n\n\n

Consumer Regulated Electricity (CRE)<\/strong><\/p>\n\n\n\n

What to do? A grizzled ExxonMobil veteran and a young D.C.-area Cato Institute economist with experience at the Department of Energy and FERC are proposing a common-sense, free-market solution to data center madness. It\u2019s simple: get the data centers off the grid and out from under state and federal monopoly energy regulation. They recently discussed their idea with The Quad Report<\/em>.<\/p>\n\n\n\n

Glen Lyons was ExxonMobile\u2019s leader for electricity policy and regulatory advocacy when he retired. The company is a major cogenerator. He also served on the board of the Electric Reliability Council of Texas, the state\u2019s autarkic high-voltage electric grid, during 2021\u2019s devastating Winter Storm Uri.<\/p>\n\n\n\n

Travis Fisher was lead author of the Department of Energy\u2019s 2017 Staff Report to the Secretary on Electricity Markets and Reliability.<\/em> He then was a staffer for Republican FERC Commissioner Bernard McNamee before becoming Cato\u2019s director of energy and environmental policy studies.<\/p>\n\n\n\n

Together, Lyons and Fisher have established an advocacy organization they call \u201cConsumer Regulated Electricity\u201d<\/a> or CRE, pushing this somewhat revolutionary idea: \u201cWhat if we simply allow large, sophisticated buyers like data center companies to enter unregulated electricity utility arrangements with the suppliers of their choice? Why do we need a regulator to protect large businesses from their decisions, provided their decisions don\u2019t impact the existing regulated grid?\u201d<\/p>\n\n\n\n

This amounts to treating data centers as normal business enterprises that can meet their needs as most business enterprises do \u2014 by finding contractors and suppliers in conventional transactions. Normal commercial arrangements and rules \u2014 land use, zoning, etc. \u2014 would apply. This avoids expensive, time-consuming and fraught wrangles with energy regulators. As Lyons and Fisher note \u2014 something all who have interactions with federal and state electric regulators understand all too well \u2014 \u201cRegulators are risk averse, and the sector\u2019s big players (i.e., regulated utilities) are the grand masters of the rules.\u201d<\/p>\n\n\n\n

Data centers would not need to worry about grid reliability to keep their business running. The two parties can make their own reliability arrangements, involving engineering (underground connections, backup generation, storage or through contract provisions).<\/p>\n\n\n\n

No regulatory quagmires enriching lawyers, consultants, and special interest groups. No threats to the grid. Overbuilding penalizes the parties to the contracts, not the public. No meaningless White House gabfests and empty posturing.<\/p>\n\n\n\n

CER may be catching on. Shortly after the White House\u2019s anodyne photo op with the AI broligarchs, the Wall Street Journal<\/em> reported <\/a>that Exxon and Chevron are looking into the data center business:<\/p>\n\n\n\n

\n

Major oil companies have plenty of experience in building and operating natural-gas-fired power plants to support their own energy-intensive operations, such as refining, natural-gas liquefaction and petrochemicals. Exxon said in its latest corporate update that it has developed 5.5 GW worth of power projects since 2001.<\/p>\n<\/blockquote>\n\n\n\n

\u2014\u2014\u2014\u2014\u2014-<\/p>\n\n\n\n

This post, originally titled \u201cHow to End \u2018Data Center Madness<\/a>\u2018,\u201d has been slightly edited for MasterResource.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cUnder the proposed deregulation plan, data centers would not need to worry about grid reliability to keep their business running. The two parties can make their own reliability arrangements, involving engineering (underground connections, backup generation, storage or through contract provisions).\u201d<\/p>\n","protected":false},"author":121246920,"featured_media":363953,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691822666,691832942,691819776,691819409,691830386,691831255],"class_list":{"0":"post-363951","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-artificial-intelligence-ai","9":"tag-consumer-regulated-electricity-cre","10":"tag-dominion-energy","11":"tag-ferc","12":"tag-u-s-electric-grid","13":"tag-us-president-donald-trump","15":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/01\/0fercs_latest_market_manipulation_alert_social.webp?fit=1600%2C800&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1wGb","jetpack-related-posts":[{"id":276191,"url":"https:\/\/climatescience.press\/?p=276191","url_meta":{"origin":363951,"position":0},"title":"The Wounded Texas Grid: Who\u2019s On First?","author":"uwe.roland.gross","date":"08\/29\/2023","format":false,"excerpt":"The\u00a0Texas Electric Utility Restructuring Act of 1999\u00a0is approaching a quarter-century. And what a mess has resulted from the misnomer \u201celectricity deregulation.\u201d","rel":"","context":"In \"ERCOT\"","block_context":{"text":"ERCOT","link":"https:\/\/climatescience.press\/?tag=ercot"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/image-1061.png?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/image-1061.png?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/image-1061.png?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/image-1061.png?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/08\/image-1061.png?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":367548,"url":"https:\/\/climatescience.press\/?p=367548","url_meta":{"origin":363951,"position":1},"title":"The Great Texas Blackout (2021): When the Free-Market Electricity Debate Began","author":"uwe.roland.gross","date":"02\/25\/2025","format":false,"excerpt":"The Great Texas Blackout four years ago triggered a social media debate that reconfirmed \u2018classical liberal\u2019 Lynne Kiesling as an advocate of centrally planned, highly regulated electricity. It also revealed a cadre of electricity planners who bristled at the argument that government failed, including\u00a0Eric Schubert\u00a0and\u00a0Robert Borlick. The exchanges began a\u2026","rel":"","context":"In \"Battery storage technologies\"","block_context":{"text":"Battery storage technologies","link":"https:\/\/climatescience.press\/?tag=battery-storage-technologies"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/02\/0a2bfcebe-0b09-4388-9f8c-6c36d59d3999-texas_topper.webp?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/02\/0a2bfcebe-0b09-4388-9f8c-6c36d59d3999-texas_topper.webp?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/02\/0a2bfcebe-0b09-4388-9f8c-6c36d59d3999-texas_topper.webp?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/02\/0a2bfcebe-0b09-4388-9f8c-6c36d59d3999-texas_topper.webp?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/02\/0a2bfcebe-0b09-4388-9f8c-6c36d59d3999-texas_topper.webp?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":319400,"url":"https:\/\/climatescience.press\/?p=319400","url_meta":{"origin":363951,"position":2},"title":"No Care & No Responsibility: Massive Subsidies Only Reason Wind & Solar \u2018Industries\u2019\u00a0Exist","author":"uwe.roland.gross","date":"04\/22\/2024","format":false,"excerpt":"Sun\u2019s up, wind\u2019s blowing and wind and solar power is flowing. Wind drops, Sun sets and you\u2019re on your own. The so-called wind and solar \u2018industries\u2019 couldn\u2019t care less whether you\u2019re left freezing in the dark. Your power supply is somebody else\u2019s problem.","rel":"","context":"In \"electric vehicles (EVs)\"","block_context":{"text":"electric vehicles (EVs)","link":"https:\/\/climatescience.press\/?tag=electric-vehicles-evs"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/04\/OIG-70.jpeg?fit=1024%2C1024&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/04\/OIG-70.jpeg?fit=1024%2C1024&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/04\/OIG-70.jpeg?fit=1024%2C1024&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/04\/OIG-70.jpeg?fit=1024%2C1024&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":378317,"url":"https:\/\/climatescience.press\/?p=378317","url_meta":{"origin":363951,"position":3},"title":"New Texas Law To Force Renewables To Be\u00a0Dispatchable","author":"uwe.roland.gross","date":"05\/14\/2025","format":false,"excerpt":"Sounds like Texas is getting fed up with its electricity system being increasingly put at risk by wind and solar power.","rel":"","context":"In \"Electric Reliability Council of Texas (ERCOT)\"","block_context":{"text":"Electric Reliability Council of Texas (ERCOT)","link":"https:\/\/climatescience.press\/?tag=electric-reliability-council-of-texas-ercot"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/05\/0TxDOTAustin.webp?fit=1039%2C726&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/05\/0TxDOTAustin.webp?fit=1039%2C726&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/05\/0TxDOTAustin.webp?fit=1039%2C726&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/05\/0TxDOTAustin.webp?fit=1039%2C726&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":236388,"url":"https:\/\/climatescience.press\/?p=236388","url_meta":{"origin":363951,"position":4},"title":"FERC considers constraining renewables","author":"uwe.roland.gross","date":"12\/27\/2022","format":false,"excerpt":"The looming threat of numerous blackouts is their fault.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/image-853.png?fit=1200%2C516&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/image-853.png?fit=1200%2C516&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/image-853.png?fit=1200%2C516&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/image-853.png?fit=1200%2C516&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/image-853.png?fit=1200%2C516&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":245261,"url":"https:\/\/climatescience.press\/?p=245261","url_meta":{"origin":363951,"position":5},"title":"How FERC can protect the grid from wind and solar","author":"uwe.roland.gross","date":"02\/24\/2023","format":false,"excerpt":"FERC has no control over what power generators get built, that is a State function. But they do have a say in what is hooked into the grid, which is called interconnection. Reliability starts with interconnection approval.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-705.png?fit=1200%2C510&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-705.png?fit=1200%2C510&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-705.png?fit=1200%2C510&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-705.png?fit=1200%2C510&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/02\/image-705.png?fit=1200%2C510&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/363951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=363951"}],"version-history":[{"count":2,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/363951\/revisions"}],"predecessor-version":[{"id":363954,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/363951\/revisions\/363954"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/363953"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=363951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=363951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=363951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}