Pennsylvania faces a looming energy crisis fueled by the rapid expansion of data centers. The surge in cloud computing, artificial intelligence, and related technologies is driving a construction boom for these facilities, which require immense amounts of electricity. This escalating demand is placing significant stress on the state's power grid and, crucially, driving up electricity costs for all Pennsylvanians. The situation is particularly concerning given that a substantial number of residents already struggle with electricity shutoffs, a problem that will likely worsen with continued rate increases. Regional grid operator PJM is tasked with maintaining a stable power supply, but the unprecedented growth in data center energy consumption presents a serious challenge. While data center companies tout the economic benefits—job creation and increased tax revenue—they are also facing increased scrutiny regarding their environmental footprint and energy demands. Companies like Nvidia are exploring innovative solutions, including using artificial intelligence to optimize grid operations. Startups such as Emerald AI are actively developing AI-powered tools to reduce data center electricity consumption and enhance overall grid stability, demonstrating a potential 25% reduction in power usage during a recent field test. The risks associated with this energy crunch are multifaceted. A significant disparity between electricity supply and demand could lead to overloaded power lines, overheating, and potentially widespread blackouts or brownouts, particularly during periods of extreme weather. There's also a risk of increased reliance on fossil fuel-based power plants to meet the growing demand, which would impede the transition to cleaner energy sources and increase greenhouse gas emissions. Rising costs also disproportionately impact low-income households, exacerbating existing financial hardships. Further complicating the situation, older, less efficient power plants may be kept operational longer, delaying the integration of renewable energy technologies. Addressing this challenge requires a multi-pronged approach. Transitioning to renewable energy sources like solar and wind is paramount to ensuring a sustainable power supply. Holding data centers accountable for their environmental impact and establishing clear emissions reduction targets is essential. Strengthening consumer protections to shield vulnerable populations from escalating costs and potential service disruptions is also critical. Finally, substantial investments in grid infrastructure upgrades are needed to manage increased power flow and guarantee reliability. Pennsylvania representatives are expressing concerns about the impact of budget cuts and the vulnerability of residents, emphasizing the urgent need for action.

Wind and solar generators stop production at rising rates as grids and battery storage lags

New Orleans is working to bolster its power grid, focusing on both infrastructure upgrades and innovative demand management strategies. A multi-faceted approach is underway, aiming to improve reliability and resilience in the face of ongoing challenges. Significant investments are planned for the region's transmission lines. MISO’s Long-Range Transmission Plan (MTEP) represents a substantial, phased effort to increase transmission capacity across its service area. While Phases 2 and 1 are currently in progress, Phases 3 and 4, targeting the Southern region including New Orleans and Arkansas, await approval. Entergy is also making local improvements, although specific details aren’t readily available. Entergy actively supports community-led initiatives like the Community Lighthouse Project, demonstrating a commitment to localized solutions. Beyond grid hardware, the city is emphasizing demand management and energy efficiency. Older buildings consume a large portion of the city’s energy, so a key initiative is the Energy Benchmarking Ordinance, which mandates that large buildings publicly report their energy usage, encouraging conservation efforts. Distributed generation—generating power locally—is also a priority, with a push for solar panel and battery system installations, particularly in community centers. The vision of “virtual power plant” models, where distributed generation systems are interconnected and integrated into the grid, aims to provide backup power and enhance overall stability. Policy and regulation play a critical role in these efforts. Federal legislation affecting wind and solar energy credits presents both opportunities and potential hurdles to affordability and project approvals. The city’s energy benchmarking ordinance provides a concrete tool for driving efficiency. However, these improvements face notable challenges. Balancing the cost of resilience measures with the desire for affordable power remains a key consideration, as frequent outages carry significant economic and safety consequences. The impact of federal legislation on renewable energy project affordability has introduced caution among stakeholders. Regulatory approvals for MISO's long-range transmission plans can be a lengthy process, causing delays. A crucial distinction exists between “reliability” – consistent operation – and “resilience” – the ability to recover from disruptions. New Orleans’ aging infrastructure and climate conditions add to the complexity, and differing priorities among Entergy, the City Council, and community advocates present ongoing stakeholder disagreements.

Diversification Drives Growth: Enbridge's Strategic Shift In a move aimed at driving growth and staying ahead in the competitive energy landscape, Enbridge has been focusing on expanding its presence in the rapidly evolving world of renewable power. The Canadian energy giant is making significant investments in this space, with a clear emphasis on sustainability and reducing its reliance on traditional fossil fuels. One key area where Enbridge is placing its bets is through the development and enhancement of its grid infrastructure. This strategic move is designed to not only support the growth of renewable energy sources but also ensure that the existing energy landscape remains stable and efficient. By doing so, Enbridge aims to capitalize on new opportunities and create a more resilient energy system. As part of this initiative, Enbridge has outlined ambitious plans to spend $8 billion over the next three years. This substantial investment is expected to play a pivotal role in driving innovation and growth within the company's renewable power business. By doing so, Enbridge is positioning itself for long-term success and cementing its position as a leader in the rapidly evolving energy sector. The significance of this strategic move cannot be overstated. As governments and consumers increasingly turn towards sustainable energy solutions, companies like Enbridge must adapt and evolve to remain relevant. By diversifying its business and investing in renewable energy and grid infrastructure, Enbridge is demonstrating its commitment to meeting the changing needs of a rapidly evolving market. This forward-thinking approach is likely to have far-reaching consequences for the company's bottom line and position Enbridge as a major player in the renewable energy space. As the world continues to navigate the complexities of climate change and sustainability, it will be interesting to see how this strategic move pays off for Enbridge.

Executive Summary

The power sector stands at a critical juncture, experiencing a surge in demand fueled by data centers and electric vehicle adoption, prompting consumption growth not seen in decades. Despite potential challenges stemming from possible subsidy adjustments, the solar industry's resilience is supported by decreasing deployment costs and increased domestic panel manufacturing. However, corporate investment in solar, storage, and grid infrastructure dipped considerably in the final quarter of 2024, likely due to anxieties surrounding the upcoming presidential election and potential changes in governmental strategies. A slight increase in overall power usage occurred during 2024, with projections indicating a further climb, largely attributable to the expanding use of artificial intelligence. The pursuit of energy efficiency is anticipated to face a combination of hurdles and prospects this year, shaped by escalating prices and the evolving political environment. A shift in regulatory leadership is underway at the Federal Energy Regulatory Commission (FERC), with Mark Christie assuming the role of Chair. This change signals a renewed focus on safeguarding consumers from excessive power costs and ensuring system reliability. National Grid and Consolidated Edison are advocating for FERC to implement mandatory reliability standards for natural gas pipelines, especially in preparation for extreme weather events, moving beyond the current voluntary framework. Experts suggest that potential adjustments to existing policies are unlikely to substantially impede the overall growth in power demand. American Electric Power has reached a $19 million settlement with the Securities and Exchange Commission (SEC) regarding corruption issues in Ohio, underscoring concerns about lobbying practices. In the absence of favorable federal policies, states and local governments are poised to provide support for energy efficiency programs. Recent events, such as a well pad explosion near a state park, have heightened awareness of the potential dangers associated with oil and gas drilling on public lands. The SEC’s actions against American Electric Power demonstrate an increased level of oversight and enforcement related to possible corruption and improper lobbying. Moreover, the proliferation of artificial intelligence is projected to place considerable strain on power systems in the years ahead. Looking ahead, the energy sector is characterized by continued growth alongside inherent uncertainties. The rise in electrification will drive up overall energy demand, and solar power is expected to remain a significant contributor. Regulatory bodies like FERC and the SEC are expected to take a more active role in bolstering reliability, combating corruption, and protecting consumers. State and local initiatives will likely become increasingly important in promoting clean energy transitions and preserving energy efficiency in response to potential shifts in federal policy. Furthermore, risk mitigation, encompassing safety and regulatory compliance, will be paramount for companies expanding drilling operations into more sensitive regions.

Saudi Electricity Company Awards Major Contracts for Renewable Energy Projects in Najd Region The Saudi Electricity Company (SEC) has recently announced the successful completion of bidding processes for the construction of two 380kV substations at Afif city in central Saudi Arabia's Najd region. The substations, designated as Afif PV 1 and Afif PV 2, are integral components of ongoing Renewable Energy Projects across the country. The Afif 1 380kV BSP project has seen Al Gihaz Contracting Company emerge as the lowest bidder with a total bid amount of SAR960 million. This is followed by the Afif 2380kV BSP project where Al Babtain Contracting Company secured the contract at SAR1.17 billion, marking another significant win for the Saudi-based company. For the 380KV OHTL projects, SEC has identified Saudi-based Al Sharif Group and its Indian joint venture partner KEC as the lowest bidders. The duo successfully bagged two contracts worth SAR560.5 million each - one for the OHTL from BSP Afif PV-2 to Ar Rass PV BSP, and another for the OHTL from Mowaih PV BSP to Afif PV 2. Furthermore, the contract for constructing the 380kV OHTL from Afif PV-1 BSP to the existing network was awarded to Saudi Services for Electro Mechanic at SAR140 million. This milestone further solidifies SEC's efforts towards strengthening the national grid infrastructure and supporting its ambitious renewable energy agenda. Following the successful completion of these bidding processes, SEC has successfully expanded its renewable energy portfolio by investing in vital infrastructure projects across various regions in Saudi Arabia.

The PJM Interconnection, a critical power grid spanning parts of the Mid-Atlantic and Midwest, is facing unprecedented challenges in keeping up with escalating electricity demand, largely driven by the rapid growth of data centers and renewable energy sources. As traditional power plants are being retired at an accelerated pace, the existing infrastructure is struggling to adapt, resulting in grid congestion and potential blackouts. The issue is further complicated by a lack of consensus on how to address it, with stakeholders offering differing views on the causes and solutions, and key players including PJM, FERC, data centers, renewable energy developers, traditional power generators, and state governors working towards a unified approach to ensure reliable and sustainable electricity supply for the region.

PUCT Greenlights High-Voltage Transmission Plan to Bolster Permian Basin Power Reliability The Public Utility Commission of Texas (PUCT) recently approved a significant infrastructure project: the construction of extra high voltage transmission lines in the Permian Basin. This decision, detailed in a report by Kristin Barclay of Focus Daily News, addresses the escalating demand for electricity in the rapidly growing region and aims to enhance the overall reliability of the Texas power grid. The Permian Basin’s expansion has created substantial strain on existing electrical systems, necessitating upgrades to ensure a consistent and sufficient power supply. While an alternative, lower-voltage plan was considered, the PUCT opted for the extra high voltage approach. Although it carries a higher price tag—estimated to be 22% greater—this solution is projected to offer long-term benefits. The higher voltage lines possess a greater capacity to transport electricity, mitigating congestion on existing infrastructure and potentially averting the need for additional lines in the future. The approval process was rigorous, involving comprehensive analyses by the PUCT and ERCOT (Electric Reliability Council of Texas). These assessments considered not only costs but also supply chain logistics and project timelines. To ensure broad stakeholder input, six public workshops were conducted, gathering perspectives from the public, manufacturers, and transmission service providers (TSPs). This project aligns with a broader evaluation of the entire ERCOT grid. Texas is actively working to identify areas ripe for improvement to support continued economic growth and guarantee long-term grid stability. TSPs will now assume responsibility for the construction and ongoing operation of the new transmission lines. Kristin Barclay, a journalism and advertising graduate from the University of South Carolina, reported on this development for Focus Daily News. Learn more about her work and connect with her on her author page [https://www.focusdailynews.com/author/kbarclay/](https://www.focusdailynews.com/author/kbarclay/) and social media: Instagram [https://www.instagram.com/indeeph2o/](https://www.instagram.com/indeeph2o/), Pinterest [https://www.pinterest.com/InDeepH2O/](https://www.pinterest.com/InDeepH2O/), Twitter [https://twitter.com/zanymomintx](https://twitter.com/zanymomintx), and YouTube [https://www.youtube.com/user/kristinbarclay/](https://www.youtube.com/user/kristinbarclay/). For another recent article, see [https://www.focusdailynews.com/celebrate-mom-on-may-11-with-bonbons-brunch-more/](https://www.focusdailynews.com/celebrate-mom-on-may-11-with-bonbons-brunch-more/).

Electric companies and the PJM Interconnection grid are projecting they can handle anticipated power needs this summer, according to a recent summer readiness overview from the Public Utility Commission. However, forecasts predicting a hotter and wetter-than-average summer present a potential challenge, as increased temperatures typically drive up electricity demand. PJM is anticipating a peak electricity demand of 154,000 megawatts. Notably, for the first time, PJM’s “extreme scenario” projection exceeds 166,000 megawatts, raising the possibility of a shortfall under severe conditions. The annual summer readiness assessment necessitates that utilities detail their preparedness, encompassing storm response protocols and comprehensive demand and capacity planning strategies. Penelec, a local utility, has announced it will complete the cleaning and inspection of all transformer cooling systems by July 1st. Ongoing efforts include capacitor inspections, repairs, and replacements. All substation capacitor banks have been examined, and a thorough review and replenishment of spare equipment is currently in progress.

PJM Interconnection, the power grid operator for the District of Columbia and thirteen states – Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia – delivers electricity to approximately 65 million customers. This summer, however, anticipates significantly higher electricity consumption, potentially leading to a 20% increase in customer bills, as reported by Reuters. PJM attributes current supply and demand imbalances to factors beyond its direct control. State energy policies have resulted in the premature decommissioning of fossil fuel power plants, occurring prior to the availability of replacement generation. According to PJM spokesperson Jeffrey Shields, elevated prices are a predictable consequence of demand exceeding supply. While wind and solar development represent cost-effective options for expanding electricity generation, past policy decisions have hindered their adoption. Actions taken during prior administrations reduced incentives for solar projects. Furthermore, connecting renewable energy facilities to the grid necessitates extensive engineering assessments. Due to a substantial backlog of over 2,000 connection requests, primarily from renewable energy projects, PJM halted new applications in 2022. Beyond the loss of existing power sources and the complexities of integrating renewables, a surge in electricity demand, especially from data centers – a high concentration of which are located within PJM’s service area – has also contributed to the current challenges. The increased popularity of AI applications, such as ChatGPT, in 2023 placed additional strain on the grid and fueled price increases. PJM has implemented temporary price caps and is expediting the connection of 51 power plants, though many of these are not expected to be operational until 2030.

Pennsylvania sits atop a massive natural gas reserve, a factor that offers reassurance amidst growing concerns about the reliability of the region’s electric grid. Recent challenges, including rising energy demands, the retirement of older power plants, the rapid expansion of data centers, and infrastructure limitations, have raised fears of energy shortages and potential power outages across the northeastern U.S. Jim Welty, president of the Marcellus Shale Coalition, emphasizes the crucial role natural gas will play in addressing these concerns. "We are situated atop one of the top gas deposits in the world," he stated. The coalition, representing companies responsible for 95% of Pennsylvania’s natural gas production, prioritizes the efficient and viable utilization of this resource for power generation, supporting data centers, and facilitating advanced manufacturing. Pennsylvania is the second-largest natural gas producer in the nation, with Washington and Greene counties contributing significantly to this output. Globally, the U.S. remains the leading exporter of liquefied natural gas, demonstrating a significant international impact. Welty acknowledges the existing anxieties surrounding the PJM grid, a transmission network serving 60 million people across 13 states, including Pennsylvania. He points to a current deficit of 100 megawatts between energy demand and supply, which requires prompt solutions. Natural gas, according to Welty, is the optimal choice for bridging this gap. The burgeoning artificial intelligence sector presents both opportunity and challenge. The construction of new data centers, particularly in Pennsylvania, promises economic growth but also demands substantial electrical power and water resources. Welty believes Pennsylvania can lead the AI revolution by harnessing its natural gas reserves to provide the necessary power. However, the industry faces hurdles. Expanding infrastructure, particularly pipelines, remains a priority, though permitting and construction can be complex. Policy decisions, like setback requirements, can also impede investment. Welty credits past administrations for streamlining energy-related challenges and supports a diverse “all-of-the-above” energy strategy.

US retail electricity prices have surged 13% since 2022, outpacing the Consumer Price Index and increasing consumer expenses, despite a recent stabilization of wholesale power prices. A complex interplay of factors, including supply-side constraints and the growth of data centers, is contributing to these rising costs. As traditional sectors continue to dominate US electricity consumption, data centers are rapidly becoming a key driver of structural load growth, with projections suggesting they will account for 12% of total demand by 2030 and 21% by 2050. This shift in energy demand is placing pressure on power grids, particularly those with less robust infrastructure, highlighting the need for substantial upgrades to transmission and distribution systems to meet projected energy demand.

A recent report by Inside Climate News has shed light on the complex factors driving rising electricity costs across the United States, particularly in California, revealing that factors beyond renewable energy sources are contributing to the increases. The analysis attributes escalating rates to a range of contributors, including the high cost of maintaining and upgrading electrical grid infrastructure, as well as the impact of global events like the war in Ukraine on gas prices, which influence electricity costs.

New Jersey's Booming Data Centers: A Threat to Residents' Energy Costs? The state's rapidly growing demand for data centers has raised concerns about the impact on energy costs for residents. To address this issue, policymakers are exploring various policy solutions. One potential approach is to require data centers to bear their own reliability costs. Instead of passing these costs on to residential ratepayers, data centers should be responsible for funding their own reliability costs. This approach has the potential to alleviate some of the burden on residents and ensure that data center operators contribute fairly to maintaining the grid's infrastructure. Another possible solution is to establish statewide planning mandates. By prioritizing residents' needs and minimizing the strain on the grid, these mandates can help limit the build-out of new data centers and mitigate their impact on energy costs. The importance of prioritizing residents' interests cannot be overstated as the state navigates this growing challenge. According to Daniel Janowski, director of voter outreach for Action Together New Jersey Education Fund, immediate action is necessary to protect vulnerable populations from the cost increases imposed by data center development.

A major power outage hit Spain, Portugal, and parts of France, disrupting airports and telecom services, with investigations pointing to grid failures and fire damage.

ICF's recent report indicates substantial changes are on the horizon for the electricity sector, primarily driven by a surge in demand and the resulting impact on pricing. Projections estimate a significant increase in electricity load, potentially reaching 25% by 2030, with some scenarios forecasting a rise as high as 40% within the same timeframe. This revised outlook may exceed earlier forecasts, largely due to accelerating trends in electrification across various sectors. The increased demand is expected to put upward pressure on electricity prices, with the report suggesting potential price hikes of up to 40% by 2030. This isn’t solely about increased consumption; necessary investments in grid infrastructure and potential limitations in resources – including fuels and renewable energy sources – will also play a contributing role. Several regions are exhibiting particularly strong growth patterns. Areas with a high concentration of data centers are naturally experiencing heightened electricity usage. States actively promoting electric vehicle adoption are also seeing a rise in demand. Furthermore, regions undergoing industrial expansion are adding to the overall load. While the report doesn't pinpoint specific locations, these trends indicate the varying impact across different areas. The driving forces behind this growth are multifaceted. Electrification is the most significant factor, encompassing the shift away from fossil fuels for transportation, heating, and industrial processes. The ever-increasing demand from data centers, crucial for cloud computing and artificial intelligence, is another consistent contributor. Expanding industrial operations and the growing computational needs driven by advancements in artificial intelligence and machine learning are also playing a vital role. The anticipated surge in electricity demand poses several potential challenges. Existing grid infrastructure will be strained, necessitating substantial upgrades and expansion. Significant investments will be required across generation, transmission, and distribution networks. Moreover, potential resource constraints – impacting fuels, renewable energy availability, and even water resources – could further complicate the situation. Ultimately, higher electricity prices could create affordability concerns for both consumers and businesses. The report highlights the crucial need for proactive planning and investment to manage this growth and minimize price instability.

Pennsylvania is emerging as a prime location for data centers, attracting major companies like Amazon and Microsoft and promising an economic boost for the state. The appeal lies in affordable rural land, favorable property taxes, and readily available natural gas and electricity. However, this surge in data center development, driven by ever-increasing data demands – from critical government operations to online gaming and artificial intelligence – presents challenges for Pennsylvania's energy landscape. Data centers require substantial electricity, creating competition with other sectors like transportation, heating, cooling, and manufacturing, all vying for power. Allison Kaster, director of the commission’s Bureau of Investigation and Enforcement, highlighted the factors making Pennsylvania attractive to data center operators. Michael Fradette, representing Amazon Data Services, emphasized the escalating demand, noting their Luzerne County data center campus will consume electricity comparable to the city of Pittsburgh. Electricity distribution companies, like PECO Energy, PPL Electric Utilities, and FirstEnergy Pennsylvania Electric Co., alongside grid operator PJM Interconnection, are grappling with this unprecedented demand. PJM anticipates a nearly 17% increase in peak demand by 2035, posing significant infrastructure challenges. Richard Webster, from PECO, characterized the potential growth as "unlike anything we have ever dealt with before." The Pennsylvania Public Utility Commission (PUC) is tasked with balancing the needs of the growing data center industry with the interests of consumers. PUC Chairman Stephen DeFrank aims to establish a regulatory tariff that facilitates rapid grid connections for large-load customers while safeguarding against cost burdens for consumers. This includes potential financial security requirements and incentives for developers who invest in their own infrastructure, minimizing risk to ratepayers. The commission recognizes the importance of accommodating business timelines while preventing costly, abandoned projects from impacting consumers. DeFrank described the situation as an "industrial revolution for the information age," comparable to the invention of the printing press. Public comments are being accepted until May 27, with replies to comments due by June 11.