The House Energy Subcommittee hearing on March 5 laid bare the stark realities facing the American power sector. Industry leaders painted a picture of a grid under immense strain, as unprecedented demand growth collides with the retirement of baseload generation. The hearing, titled “Scaling for Growth: Meeting Demand for Reliable, Affordable Electricity,” highlighted a sector grappling with a surge in demand driven by AI data centers, manufacturing reshoring, and widespread electrification. Tyler Norris, a James B. Duke Fellow at Duke University’s Nicholas School of the Environment, pointed to AI-driven data centers as a primary driver of this surge. “While significant uncertainty remains, particularly following the release of DeepSeek, data centers are expected to account for the single largest growth segment, adding as much as 65 GW through 2029 and up to 44% of U.S. electricity load growth through 2028,” he said. This demand surge is not just a future concern; it’s already here. PJM Interconnection, the largest grid operator in North America, has seen its demand forecasts climb dramatically. Asim Haque, PJM senior vice president of Governmental and Member Services, testified that PJM expects its summer peak to climb about 70,000 MW, to 220,000 MW, over the next 15 years. This is a staggering increase from the record summer peak of 165,563 MW set in 2006. Winter peaks are also closing the gap, with PJM estimating a peak of 210,000 MW by 2039. Haque emphasized that while PJM has a diversified generation portfolio, it is undergoing a significant transition toward renewable generation. However, this transition is not without its challenges. Dispatchable generators, largely fossil-fuel-based resources, are retiring at a rapid pace due to state and federal policies. PJM estimates 40 GW of retirements by 2030, 60% of which is coal, and 40% natural gas-fired. Haque underscored that renewable resources do not replace thermal dispatchable resources on a one-to-one basis, due to their intermittent nature. This poses a significant challenge to grid stability. PJM’s efforts to reform its interconnection process are commendable, but the reality is that projects are not constructing at the pace needed. Haque noted that while PJM interconnected 48,000 MW into an otherwise 180,000 MW system last year, about 50,000 MW through the queue aren’t interconnecting or constructing. This supply-demand imbalance is a ticking time bomb for the grid. Todd Brickhouse, CEO of Basin Electric Power Cooperative, echoed these concerns, highlighting significant regulatory hurdles. He cited the complex and often redundant permitting requirements under the National Environmental Policy Act (NEPA) as a major barrier. “For example, Basin Electric’s Roundup-to-Kummer Ridge transmission project required two separate Environmental Assessments—one from the Bureau of Land Management and another from the Bureau of Indian Affairs,” he explained. While Congress passed NEPA reform measures in 2023, Brickhouse emphasized the need for full and faithful implementation by all federal agencies. He also criticized the EPA’s Power Plant Rule, issued in May 2024, as a direct threat to both existing and future power generation projects. The rule’s stringent emissions limits make new natural gas power plants difficult to develop, as they effectively require 90% carbon capture—a technology not yet commercially demonstrated at scale. Brickhouse outlined staggering cost implications of compliance with the EPA rule and other regulatory mandates. “Basin Electric has estimated that regulatory compliance with this rule may necessitate nearly $10 billion in incremental capital expenditures, in addition to approximately $12 billion needed to meet new load growth by 2035,” he said. “These compliance costs would lead to an estimated 60% rate increase for Basin Electric members by 2035,” he testified. Beyond permitting and emissions rules, Brickhouse highlighted the growing need for natural gas pipeline infrastructure. Without expanded pipeline capacity, the reliability of the grid could be at risk. Noel Black, senior vice president of Regulatory Affairs at Southern Co., echoed that call, stressing the need for continued investment in natural gas infrastructure. “The reality is clear: infrastructure, particularly natural gas infrastructure, is required now to meet the rising demand,” he testified. The hearing underscored an urgency for action. The power sector is at a precarious juncture, and the path forward is fraught with challenges. However, it also presents an opportunity for innovation and investment. The sector must navigate the complexities of permitting, emissions regulations, and infrastructure development while
House Hearing Warns of Grid Strain Amid Surge in Electricity Demand
