OPINION:
America’s power grid faces an era of tremendous opportunity and tremendous challenge. Demand for electricity is growing significantly for the first time in decades, driven by data centers, artificial intelligence, electrification, and a manufacturing resurgence. This demand can spur a rush of innovation and investment needed to bring our energy infrastructure into the future. But it also puts more pressure on a strained system. The nonpartisan independent operators of nearly every single electric grid in the U.S. have issued serious warnings that maintaining reliability is a growing concern. Moreover, customers are facing years of higher costs ahead, even as inflation cools in other sectors.
The issues our power grid faces deserve thoughtful conversation, compromise on political nice-to-haves, and deliberate action to ensure reliability in the face of rapid change. We need innovation and investment in all resources to meet the moment. Competitive power suppliers have shown they can lead the nation bringing some of the largest battery storage projects worldwide to key regions like California and Texas, piloting carbon capture efforts, operating nuclear plants efficiently and safely, maintaining massive geothermal resources, and developing cutting-edge wind and solar projects, among other examples. As EPSA members contribute billions of dollars to new technologies and zero-emission generation, decisionmakers must have a realistic understanding of the continuing need for dispatchable, “always-on” power sources like natural gas.
Natural gas generation has grown increasingly efficient and clean, and it is a vital partner to wind, solar, and other forms of renewable or zero-emission power. But aspirational policies on climate are racing ahead of operational realities, thus creating huge new demands for transmission and infrastructure while raising consumer bills. Meanwhile, those same policies are forcing inexpensive, dispatchable generation off the grid. Many of the country’s largest electric grids are facing a looming supply gap because megawatts of dispatchable energy are being replaced only with intermittent resources like wind and solar, or not at all.
We are acting on climate change. But energy reliability must be a non-negotiable part of that conversation. Balancing both is possible and solutions are out there and they don’t require forcing ratepayers to foot the bill for massive handouts to utilities.
Recent actions from the Federal Energy Regulatory Commission (FERC) are deeply encouraging. Members of both parties in Congress are working together to find real answers. Grid operators have taken significant steps towards reforming long interconnection queues that have kept many new energy generation projects waiting for years for a connection to the grid. Much more still needs to be done, but the signs are finally pointing in the right direction.
After years of distortions from subsidies and political meddling, wholesale power markets are sending the right price signals to attract investment in a wave of new generation. Competitive electricity markets have a proven track record of fostering investment, innovation, reliability, and lower costs for customers and competitive power generators have shown they are uniquely poised to bring new generation solutions online efficiently and without shifting investment risk onto captive ratepayers.
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Now, the question is whether the mountains of red tape and litigation that stall new power lines, pipelines, and power plants can be reduced quickly enough. If not, more demand will be chasing less supply and families across America will inevitably suffer. Many projects that do make it through interconnection queues today unfortunately face a perfect storm of baroque permitting rules, local opposition, and high interest rates.
New legislation from Sen. Joe Manchin (I-WV) and Sen. John Barrasso (R-WY) on reforming our inefficient permitting system would go a long way towards resolving decades of issues building energy infrastructure. It’s an all-too-rare example of the kind of legislation that would be a pragmatic win for whichever party occupies the White House. But even with strong action on permitting, the full effects won’t be felt for years, which makes it imperative that policymakers take a pragmatic approach today and keep essential generation online.
Bipartisan legislation like this acknowledges a critical truth: we need more of everything to power the grid of the future. Meeting the demands of an increasingly electrified economy, all while keeping power affordable for consumers, will require every tool at our disposal.
The grid needs significant investment in dispatchable energy sources, along with more renewable energy, more battery storage, more transmission, and other new technologies to run reliably and feed rising demand.
It’s equally critical that we preserve market structures that make sure that the risks of those investments fall on companies and their shareholders, not utility customers. We need to build more and faster—and we need smart policies that encourage that investment.
The time for passing the buck about the inevitable consequences of bad policies is over. Policies that shut down essential power plants without considering the consequences on a reliable energy system aren’t helping. A permitting and approval process that slows projects to a crawl is no longer something we can afford.
A better system is both possible and necessary. Solutions will require cooperation, bipartisanship, and honesty about the true costs of an evolving system. But a more pragmatic, market-oriented, and reality-based approach is the right way to meet the challenges we face head on.
• Todd Snitchler is president and CEO of the Electric Power Supply Association (EPSA) which represents America’s competitive power suppliers who own about 160,000 MW of electric generation resources throughout the U.S.
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