‘Unprecedented Surge’ in U.S. Power Demand Requires Transmission Overhaul, Says FERC Chair
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FERC acted to revamp the entire U.S. transmission grid to prepare for extreme climate threats and face the challenge of growing power demand – including for natural gas-fired generation – via a rulemaking that outlines how to plan and pay for facilities. Still to come are the legal battles.
The Federal Energy Regulatory Commission on Monday issued Order No. 1920, which it said marked the first time in more than a decade that it had addressed regional transmission policy (No. RM21-17-000). The “1920” recognizes the year that Congress passed the Federal Power Act, which created the precursor agency to FERC.
“Our country is facing an unprecedented surge in demand for affordable electricity, while confronting extreme weather threats to the reliability of our grid and trying to stay one step ahead of the massive technological changes we are seeing in our society,” FERC Chairman Willie Phillips said.?
[Inside the Political Firestorm: NGI sits down with Neil Chatterjee, a former FERC chairman and commissioner, to discuss the impacts of President Biden’s LNG pause on authorizing new liquefied natural gas export projects in the U.S. Tune into NGI’s Hub & Flow podcast now.]
“Our nation needs a new foundation to get badly needed new transmission planned, paid for and built. With this new rule, that starts today.”
FERC, acting as a minimum three-member quorum, was split in its decision. Phillips and fellow Democrat Allison Clements voted in favor, while Republican Mark Christie dissented.?
How Much Natural Gas Demand?
Natural gas consumption is expected to sharply expand with the build-out of data centers used for artificial intelligence (AI).?
“We are at a transformational moment for the electric grid, with phenomenal load growth from a domestic manufacturing boom, unprecedented construction of data centers fueling an AI revolution, and ever-expanding electrification,” Phillips said. “At the same time, the resource mix is at an inflection point, with aging infrastructure, economics, and state policies leading resources to retire.?
“On top of all of this, extreme weather events have become the norm, and the electric grid is routinely being pushed to the brink,” the chairman said. “Yet in the face of these challenges, high-voltage power line construction has declined to a record low in 2022.”?
NGI’s Patrick Rau, director of Strategy and Research, said how much natural gas consumption may grow is uncertain. However, many experts are forecasting demand to rise sharply.
“A year or two ago, the consensus seemed to be that natural gas demand for U.S. electric generation would be flattish through the end of the decade, if not down in the low single percentage digits,” Rau said.?
“Not everyone” thought consumption would be flat, “but that was the consensus. Now, there is seemingly no one who doesn’t agree that the growth in dat...
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