In Harrisburg, Pennsylvania, there’s a growing concern about increasing energy demands. U.S. states are eagerly exploring ways to expedite the construction of new power plants, as policymakers are keen on protecting residents and economies from rising energy costs and potential power shortages. The challenge comes as the tech sector, particularly artificial intelligence, significantly drives up electricity demand, with tech companies seeking to power their expansive data centers. Simultaneously, federal initiatives are encouraging a revival in the manufacturing sector, further upping the need for energy.
States are employing various strategies to address these challenges. Some are offering financial incentives, while others are dismantling longstanding regulatory frameworks in an urgent effort to ensure that their economies don’t falter. These measures reflect a keen awareness of the competitive race to provide reliable energy and gain a foothold in the rapidly evolving marketplace. Todd Snitchler, leading the Electric Power Supply Association, highlights the unprecedented nature of this surge in demand.
Energy companies see lucrative opportunities in this landscape, given that this marks the first major rise in electricity consumption seen in several years. As a consequence, state political leaders find themselves vying for new jobs and investments linked to the development of power plants. Big Tech companies, for their part, are taking initiatives to manage their energy needs independently.
In an effort to expedite power plant projects, some governors are pushing for rapid approvals. With federal leadership promoting fossil fuel projects, states face pressure to act. The National Governors Association has criticized the U.S. bureaucratic process for being slow compared to other developed nations and urged Congress to make regulatory processes swifter and more efficient.
For instance, Pennsylvania Governor Josh Shapiro proposes creating an agency specifically designed to fast-track power plant construction, with substantial tax incentives for projects that contribute to the grid. Shapiro expressed a willingness for Pennsylvania to consider operating independently from the regional grid system managed by PJM Interconnection, citing bureaucratic delays.
Other states like Indiana, Michigan, and Louisiana are exploring nuclear power options, while Maryland is contemplating a new power plant. Ohio, on the other hand, is considering legislation to limit utility companies’ influence, hoping to incentivize independent power producers to meet the fast-growing tech sector demands. This initiative has garnered support from consumer and business advocacy groups, though it has led to division within the energy sector.
Likewise, Missouri is considering repealing a law that has long prevented utilities from charging customers for power plants not yet operational, a move backed by utilities, business groups, and labor unions. However, consumer and environmental advocates warn it might lead to increased costs for ratepayers. Similar legislative actions in Kansas have led to commitments from companies like Evergy to build new natural gas plants, arguing that such measures enhance competitiveness and potentially reduce consumer costs.
John Coffman, representing consumer interests in Missouri, suggests that utilities are leveraging inter-state competition to their advantage, pursuing financial gain through legislative changes. Meanwhile, Snitchler warns of reduced consumer protection as states scramble to build power plants. The pressure to deregulate could shift financial risks from corporations back onto consumers.
In Pennsylvania, there’s a legislative push, spearheaded by Sen. Gene Yaw, to establish a substantial power plant financing fund akin to Texas’s post-blackout program. With energy demands forecasted to climb, Yaw stresses the necessity for Pennsylvania to attract new power plant projects to keep pace with demand, noting that the state hasn’t embarked on new builds since 2019.
