In this episode of Electric Perspectives, Hanna Grene, Microsoft’s Global Go to Market and Innovation Leader for Energy and Resources, joins EEI Chief Legal Officer Rachael Marsh. They discuss Microsoft’s Community-First AI Infrastructure initiative, how digital solutions can enhance the grid. They also explore how electric companies, technology providers, and communities can work together to ensure data center growth delivers benefits for the communities where they operate.

Following is an abbreviated transcript, lightly edited for length and clarity. To listen to the full episode and catch up with other recent interviews, visit electricperspectives.com/podcast.

Rachel Marsh (RM): Earlier this year, Microsoft launched its community-first AI infrastructure initiative, and I attended the launch event here in DC. What prompted Microsoft to develop that framework and what community-first means in practice when it comes to AI infrastructure?

Hanna Grene (HG): Absolutely. I've spent my career in energy and so much about what I love in this space is that we're always balancing between the different goals of reliability, affordability, economic opportunity and, and the trust that we have with our communities and the value that we deliver to our communities. And so to me, the work that is happening right now in delivering more energy for AI and also more AI to unlock capabilities in energy is still at the crux of those continued opportunities and some of those continued concerns. What we know is that the AI era will require more energy infrastructure. But as I mentioned, it can also give the energy industry powerful new tools. And so what prompted our community-first AI infrastructure work is to step back and listen to our communities. I hope what you see in our 5 pillars of community-first AI infrastructure reflects what you're also hearing from your members and in their communities.

We started from a point of listening. What we've heard is that communities understand and value the benefits that digital infrastructure deliver in their backyards, specifically the ability to create jobs, the local investment that accrues values to local businesses, as well as tax benefits and tax resources in communities. But they're also asking reasonable and important questions, like: what will this mean for my electricity bill? What does it mean for local water resources? You know, how do we benefit as a community, not just from the tax base, but from this AI era that we're living through? And so it was that listening and those questions that really infused our approach to community-first AI infrastructure.

RM: What are those five pillars?

HG: We'll pay our way to ensure that data centers don't increase electricity prices, that we'll minimize our water use and replenish more water than we use. We actually have some really exciting advanced technology where we're doing much, much more closed-loop and entirely recycled data center systems. So there's been leaps and bounds of, I would say, evolution, and new capabilities in that space. Three, we'll create jobs for residents. We invest in local partnerships and do offer local training and path to skilled jobs, often working with local community colleges and trades programs. Four, we add to the local tax base, and we've seen in communities that, that we've worked with over time that this has been used to fund hospitals, schools, parks, libraries, and that's really a highly local conversation on their priorities.

And then five, this is an era where more and more AI skilling is becoming important across different sectors. And so we want to be a part of that local skilling, investing with schools, community colleges, and universities, but also offering skills training for businesses and local nonprofits. So those are our 5 pillars. And, you know, as I said, it came out of community listening, but also listening to EEI's members, because having been in this space a long time, I think of utilities as community organizations. And so we learned so much through our direct partnerships with utilities as well.

RM: I love that framing. Now I want to talk about some of your work and your forward-looking solutions that help enhance infrastructure. I understand Microsoft has collaborated with utilities to enhance grid infrastructure through something called digital twins. Could you unpack how digital twins work and how they can help deliver value to customers?

HG: Sure. And I'll take an even wider lens than just digital twins, but to try to put digital twins in a nutshell, when you think about the power grid, it is truly the world's most amazing and complex engineering feat. It’s not just the physical assets, but the geographic space that they embody, the workforce that's constantly working on them. It is a living, breathing machine. Interacting with the physics of the world around it. 

And so when we talk about digital twins, you know, the most like layman's way to think about it is how do you take the massive amount of data that's in that big engineered system and happening in the dynamic world around that system, the weather, the temperature, the humidity, you know, where there's an outage because somebody's doing work, where you have a new subdivision coming online and take that big dynamic system and reflect it in a way that is digital using all of that real-time data, but to help you do planning, to help you make decisions about where you might build future infrastructure, to help inform things like predictive maintenance, to go out and repair or fix something like a transformer before you have an outage incident. 

And so, it’s about how you take this tremendous amount of data that we throw off of our assets across every part of the value chain, and use that data to improve your decision-making with accuracy before you're in a moment of need. 

RM: So a supercharged advanced form of modeling. And it sounds like it has both real-time moment-to-moment applications and then also longer-term applications. Can this deliver cost savings and efficiency for customers?

HG: Yes, and that's just scratching the surface. I get excited about grid use cases because I'm a bit of a grid nerd and because we're dealing with a level of complexity both in what we're building, I mean the absolute behemoth scale of the capital infrastructure plans that are happening across the industry right now to build infrastructure, to improve our infrastructure, to get new generation online, that's a tremendous AI opportunity. 

The benefits that I see there are that we've done a lot of work in AI for permitting and helping take what can be a very manual and slow process to build environmental permitting documentation, and even to do the front-end engineering design work. So there's a lot of AI that can be applied to streamline permitting. One of our customers in that, Aloe Atomics, saved $80 million using AI for permitting instead of taking a traditional approach. So big cost savings as well as big, big time savings. And as I mentioned, the engineering and design work is not only about safety and accuracy, but repeatability and de-risking projects.

And then when I look into the grid itself, this system that we're building, we're building in more complexity as we go. AI's superpower is helping us manage that complexity without compromising on reliability. And so when we think about things like predictive maintenance, when we think about things like storm restoration and repair, it's about reliability. It's about workforce safety. 

There's a ton of phenomenal work that's been done in helping our folks in the field have real-time, accurate information about the systems that they're working on that improve the safety and the productivity of our workforce. You know, do you need to do two truck rolls to have the right piece of equipment at a site, or can we provide some of the backend AI insights so that the equipment order was placed at the right time to get you the right equipment to go to the site with the right information. It's money, it's time, it's safety, it's reliability, and it's keeping the lights on for our communities.

RM: Let's shift gears just a little bit. I have an 11-year-old daughter, and like a lot of parents, I think about the future workforce and what that's gonna look like. And of course, here at EEI, we think a lot about the energy workforce. How does AI change how we should think about our workforce, and particularly our workforce in energy?

HG: We have such an incredible workforce opportunity in energy right now. There are two things happening in parallel. The first is a lot of the skilled trades that we talked about. There is a tremendous opportunity for us as an industry, and we're coming together as we already are with our partners and utilities to hire more trades and to grow the skilled workforce because we need more. The retirement rates of folks rolling out of these jobs is very, very high.

We are in a large growth and build cycle as an industry, and so we do need more of a skilled workforce to jump in. We have customers that are seeing AI as an opportunity to help with that skilling and to help with that workforce growth. So you probably have a set of engineers who know everything about substation X, Y, and Z. AI can actually be a path to help more of your workforce as they come on board, skill up, learn, dive into operating manuals, access best practices.

And I want to be super clear that that's about enabling folks to come online and do skilled work faster and more safely. Nothing here is about removing a job. We need more. I always say that an energy workforce is a yes-and equation. I'm really not worried about job loss in our industry. The answer is yes, and, and so AI is a tool, I think, to helping us grow and scale up and skill up and onboard for this tremendous growth that we are all experiencing and ensure that people enter the field and enter these high-risk jobs with the resources and the safety that they need to be successful.

RM: Last question: How can electric companies, technology companies, organized labor, and communities best work together to make sure this growth moment creates real benefits for communities, families, my parents, like all of us out here in America?

HG: I want to spend one more minute on what I'm seeing in the future. And then I really want to spend some time on that community benefit because I'm personally very passionate about it. But, you know, as I think more and more about this future we're entering into, I do think AI fluency will matter. And I do think getting your hands on these tools and challenging ourselves to rethink how we use them and how they benefit my day and your day and your productivity, I think it's important. But what I've already seen firsthand is that critical thinking, data literacy, cybersecurity, and judgment are more important than ever because the human is staying and our energy employees and our energy workforce is staying at the center of all of this work. And so the value is not, you know, AI making choices for us. The value is the people in our workforce who know the system, who ask the right questions, and who apply their judgment using this very powerful tool to augment their capabilities.

And while we're in this moment of building quickly and innovating and managing an increasingly complex system and delivering at scale. We need those tools to superpower what we do. But the human judgment, the human operator is who stays at the center. And so when I think about the nervousness people might have about AI, that's clear to me. The creativity, the human judgment, the you knowing your industry, your operations, that stays at the center of our work.

It is so important that we come together to the community organizations, to the utility, to those that are building infrastructure, in that the stakeholders have a voice. And so this is what's so central to us in the community-first AI work that we've put out there. It's central to how we work with and partner with utilities. Each stakeholder holds a piece of that vision of what it's going to take to be most meaningful and most productive in their community. And so I do think it is that coming together of those with the stakes to provide that point of view. To make this a moment that is really successful for communities.

This was part of what it took to build the grid to begin with was this engagement with communities to build infrastructure. It's what it took to build our water utilities. It's what it took to build railroads. It's what it takes to build airports. And so to me, this is not fundamentally different than those large investments that power our economy every single day. But we can learn from what worked and what didn't in those different time periods. And the more that we, again, center those stakeholders in the conversation and ensure that the communities reap the upside of this tremendous investment, I think that's the real opportunity at our fingertips.

Alliant Energy Chief Strategy Officer Raja Sundararajan and QTS Data Centers Executive Vice President of Government Relations Todd Malan recently joined EEI Chief Legal Officer Rachael Marsh on an episode of the Electric Perspectives podcast to discuss data centers, community engagement, and collaboration between electric companies and hyperscalers.

Following is an abbreviated transcript, lightly edited for length and clarity. To listen to the full episode and catch up with other recent interviews, visit electricperspectives.com/podcast.

Rachael Marsh (RM): Raja, let’s kick off with you. What can you tell us about Alliant Energy’s work with QTS in Iowa? Why was this the right fit for your company and the communities you serve?

Raja Sundararajan (RS): Thanks, Rachael. We serve around a million electric customers and half-a-million gas customers in Iowa and Wisconsin. Our philosophy is to bring on large loads that create “win-win-wins” for our customers. When I say win-win-wins, that’s for existing customers, new customers, and the community that the large load serves.

As part of that, Alliant Energy took the proactive step of investing in land near areas of significant transmission capacity, which we call Big Cedar Industrial Park. That’s where the Cedar Rapids data center that QTS is building is located. This will be the largest economic development project in the history of Iowa.

While we have an obligation to serve, what makes this collaboration successful is the DNA and culture at QTS, where they lead with communities first and are flexible with respect to the timing and issues that require us to serve the large load that QTS has.

The QTS relationship has always been about making growth happen in a way that respects communities and is responsive. That’s the single largest differentiator that we saw with this effort. We have the largest economic development project in Iowa right now, and we have not faced any significant issues with respect to communities. That’s how they do business – effectively investing in large projects while addressing community issues. That speaks volumes of QTS culture and how they serve communities.

RM: Todd, you have many choices and options for where to locate a project. What makes a partner like Alliant Energy attractive?

Todd Malan (TM): QTS has been building data centers and data infrastructure for more than 25 years. We are in a new phase of data infrastructure, where you have these larger campuses for AI workloads.

At the same time, we have built a strong relationship with Alliant Energy. We have an energy partner and a utility partner that believes in the exact same things we do: core principles about how to build capacity and recognize communities. You have to be a good listener, and you need to be able to adjust to what a community’s priorities are. You need to be able to stand in the public square and answer questions and be transparent. That’s a hallmark of how Alliant Energy builds their energy infrastructure, so they have been a good match for how QTS wants to build data infrastructure.

At any given time, QTS has 40,000 contractors at a QTS site. We’re building six large-scale data center campuses in the United States, on top of the 75 that we own and operate now. We’re very aware that there are concerns in communities. It’s really about how you respond to that. That’s a hallmark of Alliant Energy and QTS.

In Cedar Rapids, the other ingredient is we had strong elected leadership in Mayor Tiffany O’Donnell, who sat down with us and said, “Great, you want to build a data center here? Here’s what’s important to Cedar Rapids. These are the things you have to do to be part of our community.” That’s exactly what we want.

Alliant Energy also did the work of finding the land and getting it zoned as industrial land. There was an easier pathway for us to do this in Cedar Rapids.

RM: Raja, when a developer like QTS comes to your service territory and makes such a long-term commitment, how does that affect your company’s long-term planning for the future for all customers?

RS: It obviously requires planning in terms of serving that large load. We have grid investments that need to be made. Fortunately, the land already had transmission access readily available. The biggest component was the generation needed to serve this large load. That’s where we took more of a long-term view. When you have this large load, that allows us to appropriately size the amount of generation. They're paying their fair share for both generation and transmission investments, but, on the other hand, we want to make sure they’re actually providing benefit to existing customers.

That's the key ingredient. We are trying to navigate not just paying their fair share, but also how that can protect existing customers.

We were able to navigate and achieve a five-year “stay out,” or rate freeze. That’s unique, and that’s enabled by the large load that's coming in and providing benefits. That’s the biggest change that you can see, where utilities are navigating these win-win-win scenarios. We are not only trying to make sure that the existing customers are seeing lesser rate increases, but actually, in fact, in our case, no rate increase for five years."

If the large load leaves after 15 or 30 years, that generation can be used to displace other, existing generation assets that would be getting old and would be retired. There are a multitude of benefits that these customers bring in, and that allows us to do more holistic long-term planning.

TM: I’d add that this is a complex area, with some complicated economics in terms of planning, in terms of what would otherwise have been borne by customers in terms of improving infrastructure in the region.

If a large load customer can come in and take down the lion’s share of that cost, what it does is help stabilize rates for all the other customers in that area. That's a fairly complex thing to explain. What I love about what Raja and Alliant Energy President and CEO Lisa Barton were able to do is that, when we made the announcement of this data center, they had a very simple message for customers: These data center investments are going to allow us to keep your rates flat for five years. That was an on-the-record statement right out of the box, and it was a simple reassurance to people. Your rates aren't going up because QTS is here.

There’s an old saying in politics: “If you're explaining, you're losing.” I like how Alliant Energy was able to just cut to the chase and say, "We're guaranteeing your rates won't go up for five years."

RM: I understand Energy Secretary Chris Wright visited to discuss the project and highlight the Ratepayer Protection Pledge, which sounds aligned with everything you all have described. Todd, tell us more about the Ratepayer Protection Pledge and how it connects to your work.

TM: We think that the Ratepayer Protection Pledge is really an important assurance to individual ratepayers that are worried about affordability and energy cost – and rightly so. This historic investment in data infrastructure that we all need for our everyday lives.

By the way, this isn't just for AI. It's for if you use MyChart to schedule your kids' pediatrician appointment, if you are working with your kids' teachers online – that is all running through a data center.

The Ratepayer Protection Pledge is an important way for utilities, the large load data infrastructure, and AI companies to reassure people that we are going to pay for our own additions to energy infrastructure. In fact, we will be picking up the tab that would've normally gone to the other customers.

You're seeing quite a few governors who are putting out guidelines that are saying, “If you're going to build infrastructure in our state, you're going to meet these requirements.” That means transparency about water, or you're going to do a community benefit agreement. And I think that's really healthy – to actually have these elected officials who have to represent their constituents going out there and saying, “Yes, we need this. Yes, we have to stay ahead of China in terms of energy infrastructure and the creation and use of AI, but if you're going to do this in my state, you're going to meet these minimum requirements.”

The Ratepayer Protection Pledge and these other sort of standards and guidelines are important ways for people that have legitimate concerns to feel like they're heard and somebody is doing something about it.

RM: Raja, tell us more about how Alliant Energy structured its agreements to ensure the right balance of protecting reliability and affordability for existing customers while moving with speed to serve QTS and other large loads.

RS: Back in 2023, we were already having conversations with QTS and the Googles of the world that we serve in Cedar Rapids. We told regulators, “If you approve us working with these large loads and serving in a more efficient manner, that will effectively enable us to freeze rates for five years.” That’s what started off this conversation. It was very open and transparent. We showed various forecasting scenarios – what it would mean to bring in 500 megawatts to a gigawatt.

As part of that rate review, we created the ability for agreements to be made with large load customers, in our case, where the commission approves within 90 days. That addresses the speed-to-market issue. As part of the filing, we show revenues coming from large loads more than cover the incremental cost to serve large loads.

You need to effectively make a demonstration to not only our commission, but other key stakeholders like consumer advocates and industrial groups, to show the marginal revenues coming from this customer far exceed the marginal cost to serve them.

We have promised that we will not file a rate case until the end of the decade. To the extent we’re successful with additional opportunities, we might be able to extend our rate freeze. It’s a great way to showcase a win-win-win.

RM: Let’s shift gears: We’ve talked about affordability, but we’re also hearing about the speed part of the equation from data centers. Raja, how do you align that desire to bring projects online quickly given that we’re talking about long-lead-time infrastructure projects?

RS: Speed-to-market is the name of the game, and we have to address customers’ needs. What we have done historically is that developers purchase land in a favorable location to build a data center. Then, they come to us and say, “What will it take to power this data center?”

We have a great relationship with ITC Holdings. ITC has built a lot of transmission over the last decade or so that has enabled us to tap into existing transmission capacity across our footprint. There are pockets where it requires a not-significant transmission upgrade to enable a large load. We direct hyperscalers and developers to these locations to address speed-to-market.

On the generation side, we say, “Can you live with non-firm conditions? Can you live with the ability to curtail under critical times before a gas plant or other resource comes online?” That’s another shift in conversations, where developers and hyperscalers are OK with a bridge period. They’re OK with creative solutions to address speed-to-market. Utility infrastructure can take time to build.

This is where the collaboration and real-time conversation between the utility and developers like QTS effectively enables an objective to be met in a timely manner while making sure we don’t rush the development of generation that has community impacts. There are a lot of things you need to respect and address around public concerns and building generation.

That’s the conversation that allows us to navigate both the speed-to-market issues and the natural timelines of building utility-scale generation. This has been a great collaboration, and it’s a testament to the Cedar Rapids data center and the future data centers that we intend to build with QTS.

TM: There’s tension between speed and making sure you’re doing things the right way. It helps to have partners like Alliant Energy that have done a lot of the work. They’ve worked with the community.

It’s important for us to think about the contrast in China. One of the reasons China has been able to scale up their energy infrastructure and their data center infrastructure so fast, at such scale, is because they don’t have to follow the same rules. It’s basically government fiat that this data center is going to go in here.

RM: What is QTS doing to ensure communities benefit from these projects?

TM: We made a commitment to communities that's pretty holistic across the board. It's up on our website, so we're accountable for the principles that we've laid out there – and it starts with the ratepayer protection type of commitments around energy infrastructure and paying our own way and being transparent about that.

It extends to water and making sure people understand we are committed to using new technology we pioneered in 2018 that utilizes closed loop water systems. We take water into that system, use it, and it can go back into the municipal water system and be treated like any other input from an industrial operation. It’s not a net loss of water for the system in the region.

It extends to community benefit agreements, making sure we’re supporting communities based on listening to them and what they want and need. That may be different in Ohio than it is in Arizona. We’ve tried to learn from our 25-year history. In a lot of communities, QTS is thought of highly, as a good neighbor and a responsible part of the business community. We put a lot of resources and time and effort into listening and learning, taking action against what we’re hearing from the communities that we want to operate in.

RM: We’ve seen some communities really throw open the doors and welcome this infrastructure and investment. We’ve seen others with concerns about transparency, local impacts, energy use. What do you view as best practices for doing community engagement right?

RS: The first thing is to be open and transparent. We need to talk about what we are actually building. This era of non-disclosure agreements and agreements done in secrecy builds a lot of distrust in communities.

Any infrastructure that needs to be built requires a decent amount of public input and public involvement. We need to be open and transparent – and showcase that we have multiple projects to show what this means to a community. There are a lot of misconceptions out there.

We have to be much more proactive and open and transparent in terms of what projects are and how they affect communities. Without that, you quickly lose trust within a community.

We are seeing the economic development benefits of this construction project in Cedar Rapids in real time. You’re talking about 8,000-plus construction workers. You’re talking about meaningful impact to communities, and these are not temporary jobs. A significant amount of permanent jobs are created, also. There are a lot of misconceptions out there that need to be openly promoted and debated. As long as the community makes an informed judgment knowing all the facts, we respect each community’s decisions. I think being open and transparent goes a long way.

TM: The key is starting off with a level of trust and being able and willing to stand in the public square and say, “Here’s who we are. These are our values. This is how we operate. This is what we think could be built in your area that’s going to help society benefit from the tools of the digital economy.”

In Louisa County, Va., earlier this year, they announced that they’re lowering everybody’s property taxes because of data center tax payments in their county. Meta just announced a cool program around training in skilled trades for young people. There are a lot of strong examples around best practices that a lot of different companies are engaged in.

In this episode of Electric Perspectives, Gregory A. Beard, director of the Department of Energy's (DOE's) Office of Energy Dominance Financing (EDF), discusses how the federal government is deploying historic levels of capital to strengthen the energy grid and support long-term reliability. Director Beard outlines EDF’s focus on lowering costs for customers while improving reliability and energy security, including major recent loans to electric companies and a rapid pace of capital deployment.

Following is an abbreviated transcript, lightly edited for length and clarity. To listen to the full episode and catch up with other recent interviews, visit electricperspectives.com/podcast.

Electric Perspectives: How do you align EDF’s financing strategy with grid reliability, security, and customer affordability objectives?

Director Beard: In his first days in office, President Donald Trump declared that we have an energy crisis and an emergency. He chose Secretary Chris Wright to lead the Department of Energy because the policies that Secretary Wright is now deploying are making energy more affordable for the U.S., making the grid more reliable, helping us win AI, and that's giving us energy security—which is national security.

We are really the implementation arm inside EDF. We were appropriated under the Working Families Tax Cut Act—$200 billion to deploy into the market on projects that will, in every case, make energy more affordable for Americans and help bolster the grid, help us win AI, help us keep assets online that would otherwise be decommissioned.

We've already deployed about $60 billion since the Administration has started, so we're off to a fast start. I think we will invest the bulk of our capital even in the next 12 months. In every case, we are super focused on affordability. Every dollar will have that be part of the criteria for deployment.

Electric Perspectives: The recent $26.5-billion Southern Company deal was the largest loan that EDF has made to date. What are your goals as you continue this capital deployment?

Director Beard: Not only was the Southern Company loan the largest loan for EDF: It was the largest loan in U.S. history from the government to the private sector outside of a financial crisis. You can't overstate how seriously this Administration—President Trump and Secretary Wright—take this crisis.

We have hundreds of billions of dollars to deploy to help fix it. We've got about $75 billion left to lend to utilities to help with additional generation, to do reconductoring, to help keep assets online that would otherwise need to be decommissioned. And, we expect to have that capital deployed or committed over the next 12 months.

Electric Perspectives: How is DOE using its financing mechanism to support innovative grid technologies that otherwise may be too risky or cost-prohibitive to advance?

Director Beard: If you look at what's most beneficial to customers, to reconductor an asset or a transmission line might allow for more generation to be available on the grid without the expense of actually having to build new generation. We're very focused on technologies that really impact the rate payer affordability. Of course, we're a loan office. We're not a grant office. We don't want to take technology risk that would be viewed as what I would call “venture debt.”

In many cases, we're lending to in the utility space with customers that are investment grade. To the extent that they want to borrow from us to pursue new technologies while committing their investment-grade balance sheet as a supportive credit mechanism, we would be happy to support that. But, we can't—on a one-off, standalone basis—lend to technology ideas that aren't ready for deployment yet.

Electric Perspectives: So you’re looking at proven technologies, and even things like nuclear energy. How are you thinking about nuclear?

Director Beard: The President and Secretary Wright have been vocal about the need for the United States to be a leader in this space. We have the best capital markets in the world. I think we have the best entrepreneurs in the world focused on fixing this problem, which is why we've seen a lot of activity around capital raising and progress in the SMR space.

The technology that is here today that we want to support—and you'll see a lot of support for out of our office—is in the restart of the large-scale reactor program. We will do this through lending for long-lead-time items, as well as for support for the actual construction of these projects.

There are already more than 10 licensed sites in the United States where there are existing reactors licensed to add additional capacity. I think we will begin to see activity.

My suggestion for any potential interested party in this space would be to look at the support that these projects get in the form of investment tax credit (ITC). It's 30-percent to 50-percent ITC—which means, if you invest a dollar, you get 30-50 cents back. And, you don't get that back once it's complete, you can get it back even during construction.

We believe that the hyperscalers will be willing to lend their balance sheets through in the form of long-term power purchase agreements. We think that'll happen at prices that will make this program and these projects economic for equity investors, for the sponsoring utilities, and beneficial to ratepayers. This is a big push that we're embarking on now, and we think we'll have announcements in the coming months.

Electric Perspectives: It sounds like EDF is approaching this with an effort to de-risk some large-scale investments, making them more attractive for other long-term investors for these really big projects.

Director Beard: Absolutely. Obviously, the industry has said in the nuclear space that they're afraid of being alone. If you build just one copy of anything, it's going to be expensive. The reason why we're embarking on the restart of the program is to help drive those costs down, to make it more competitive with other energy generating technologies.

Electric Perspectives: What sort of timeline have you and your team been aiming for to review and get some of these funds out the door?

Director Beard: We're in a hurry. We cannot have an impact without deploying the capital, so take two potential borrowers. The projects that will have an impact, we will grade it.

The reality of the Southern Company projects is that those ratepayers are saving $7 billion over the life of that loan. Anything that will have a measurable impact, as soon as we can, we want to have involvement and get that capital out.

So, come to us with projects that are ready to go, where the capital can be invested in the next three years, where we can actually measure the impact for the ratepayer. We will be quick, and we will work at the pace of the borrower, which means we can have these loans committed in months—not years.

The last Administration averaged about 18 months from first interest to the closing of a conditional commitment. We aspire to get that down to under six months. We will work at the pace of the borrower, and we're, at this point, repeating many of the same sort of loan documents or using many of the same loan documents. This should not be months of negotiation to get to the finish line for these deals.

My advice for potential borrowers is to read the existing loan documents for the Southern Company deal, for example. And, to the extent that you can accept the terms and conditions that others have agreed to, it'll make the process much faster.

Permitting reform, energy reliability, and wildfire mitigation are top priorities for Congress and America's electric companies.

House Natural Resources Committee Chairman Bruce Westerman (R-AR) and Representative Scott Peters (D-CA) recently joined EEI President and CEO Drew Maloney for an episode of the Electric Perspectives podcast. The group discussed America’s energy landscape and the prospects for durable, bipartisan siting and permitting reform—including the Standardizing Permitting and Expediting Economic Development Act (SPEED ACT) and changes to the National Environmental Policy Act (NEPA).

Following is an abbreviated transcript, lightly edited for length and clarity. To listen to the full episode and catch up with other recent interviews, visit electricperspectives.com/podcast.

Drew Maloney (DM): Permitting reform is a big topic for everyone. It takes China one or two years to build a transmission line or new generation, and it can take us in the United States more than a decade to do the same. Chairman Westerman, what can you share about the SPEED Act, your permitting reform efforts, and how important this issue is?

Bruce Westerman (BW): It takes a long time to build things here in America. We have things that we need to build in the energy sector, but also in transportation and infrastructure.

Permitting affects so many different parts of our lives. And, to most people, it's out of sight and out of mind—but it adds cost to things. There’s a way we can do this, keep our environmental standards not only in place, but have even higher environmental standards—and build things again.

That's what the SPEED Act's all about. I'm glad to be leading the charge on it—in the House, at least.

DM: Congressman Peters, you’ve been a big advocate for NEPA reform. Tell us about how this issue fits into the larger permitting reform discussion.

Scott Peters (SP): First, Bruce brought the SPEED Act really far. The thing I give him credit for is that he will listen to folks on the other side to see where we can bridge the gap, where we can bring as many people in as possible. In this context, if you want to get 60 votes in the Senate to get something done that’s durable, it’s got to be bipartisan.

The SPEED Act is a very aggressive reform of NEPA. I think it’s one we need now, and, speaking from an environmental perspective, I see that the market wants to bring on a lot of renewables. We’re looking at an environmental law that’s actually getting in the way of us building renewables. I don’t think that’s what it was intended to do.

Back in the 1970s, the idea was to stop bad things from happening, and NEPA was passed even before the Clean Water Act and Clean Air Act provided substantive protections against the emissions of pollutants into the environment. Today, it’s the most-litigated environmental law. It creates a lot of delays.

Getting NEPA out of the way is really fundamental to environmental protection. It’s hard for folks to let go of it. Modernizing NEPA means building stuff faster. I think people, gradually, on the Democratic side, are starting to understand that, as well.

DM: Mr. Chairman, how optimistic are you that permitting reform can get done this year?

BW: I'm pretty bullish about it, and it really needs to happen this year. It needed to have happened years ago. There was an effort at the end of the last Congress to do some permitting reform, and it just wasn't ready for prime time. I think it's ready for prime time now.

Getting the SPEED Act out of the House was a good milestone. I know the Senate's working on it in a bipartisan fashion. I know the Administration wants permitting reform, and it would be a real shame if we don't deliver for the American people during this Congress.

I wish I had a crystal ball. A reporter asked me the other day if I thought the SPEED Act could ride on the Surface Transportation Bill, which is one of the rumors out there. I said, "I don't know, maybe the Surface Transportation Bill could ride on the SPEED Act, because I've actually got more confidence in the SPEED Act passing than the Surface Transportation Bill right now."

The good thing is there's so much interest in it. People are coming to Washington to talk to their members of Congress like I've never seen before on this issue.

DM: In my role at EEI, I've never seen an effort so involved in trying to get permitting reform done. When it takes you longer than a decade to build a transmission line or a generation facility, that's just unacceptable. Permitting delay costs add about 25 percent onto a project. We can't tolerate that.

BW: Energy is so important—so foundational to our economy—but it affects other things, too. In the reconciliation bill we passed last summer, there was $12 billion in there to upgrade control towers. The Secretary of Transportation told me their problem was they couldn't get through the NEPA reviews to get fiber-optic cables run to control towers. It's just stuff that's nonsensical. We need to put common sense back into the equation and let America build again.

DM: Congressman Peters, we're in this AI data center race while at the same time managing increased electrification, industrialization, and the reshoring of manufacturing activity. How important is permitting reform to those different areas and their connection to reliability and affordability?

SP: I agree with Bruce. This is something that has to happen this year. And we have got all the right players in place. We've got good products in the pipeline. And I heard all these same statistics about how delays cost people money, and every election I've seen has been about affordability. I think that's what people are concerned about. We need to get this done.

We have to do some work on the transmission side, too. To get a bill out of the Senate among Democrats, I think we're going to need some real transmission reforms, and we're having fits and starts in the House. We’re watching the Senate have conversations, and we had the Energy Permitting Reform Act. That was a great start.

It’s going kind of slow over here, but it’s got to happen this year.

DM: We totally agree on that. Chairman Westerman, in Arkansas, Entergy announced a Google data center project that will bring $1.1 billion in net benefits to customers. I know you're very focused on critical mineral production. Talk to us about the significance of that.

BW: We had a recent hearing in the Natural Resources Committee on copper—a whole congressional hearing on copper. It's amazing. Some people say we need to mine more copper between now and 2050 than we've mined in the history of the world. It's a global demand for copper.

Fortunately, we have a lot of copper in the ground here in the United States, but it's not helping us build transmission lines or electrical equipment if we can't get it out of the ground. Mining can take 20 or 30 years to get a permit, and we can't compete in the speed of the global economy if we're waiting 20 or 30 years to mine copper and all the other things that go into computers and electronics.

Arkansas is being pretty aggressive on building new generating power as it's needed—and on recruiting industry and recruiting data centers to the state. What people miss is that, if you're an electric company, a data center is your ideal customer. It's a big, consistent, heavy load that makes your generating equipment operate at a higher utilization rate, which means you can produce electricity at a lower cost for commercial and residential and industrial consumers.

And the data center can actually be a huge benefit to your grid operation and to your reliability and cost structure. I hope all the other states keep saying we don't want data centers and they all come to Arkansas and we're able to take advantage of the benefits of having them there.

DM: The states doing it right on data centers are seeing downward pressure on rates for their customers because of the point you just made. It's a fixed-cost system. If you have a large customer and the state has approved a large load tariff agreement, it's a big win for the grid in the state and the customers.

BW: The other part of that is the data companies are willing to pay for the investments if you need additional generating or transmission capacity. They're even saying they can set their data centers up so, if there's a peak load, they can throttle back their data center so you can meet the demands other places, which helps you even more on the grid.

SP: Right. There's a remarkable consensus that data centers should pay for their costs and assume their risk, because you don't want stranded assets and so forth. They have a lot of money that they're willing to invest. They're talking about how they can actually enhance the grid around a community, because it's in their interest to have that kind of reliability.

The other thing, in California, we notice is that a big part of our rates are the infrastructure that's been built. If you can serve a lot of energy, now you're spreading that cost along fewer and fewer units of energy. If you have more energy on there, more people paying, it actually could have a resulting benefit for customers.

DM: We're going to look back on this period and how we built a much more robust, more resilient grid based on all this data center investment. We're very excited about it. Switching topics, Chairman Westerman, you may be the only forester in Congress. What more needs to be done with forest management as it relates to wildfires?

BW: It's just a matter of doing the right thing. The way Scott and my relationship really started working together on legislation goes out to the Giant Sequoias that only grow in California. There was a two-year period when we lost 20 percent of those trees—the most iconic trees on the planet.

Trees are living history books, because you can go back and measure fire scars, you can count rings. When we had that two-year period, it goes back to the way these groves were being managed. After the gold rush in California, Native Americans quit burning, and we created federal agencies that put all the fires out. You had these slow-growing trees grow up in the understory that would have been taken out by fires that normally occurred every two or three years. They went 120 years without fires.

You had these white fur trees that got up in the lower crowns of the Sequoias. The fire came through, ran up the white fur—which we call it ladder fuel—got in the crown of the Sequoia, and wiped the whole grove out.

Poor Scott went on a CODEL, and I had him cornered on an airplane for hours, pulling out research papers, saying, “Look, this is what the researchers say is happening to the Giant Sequoias.” To his credit, he didn't just brush me off. The next thing you know, we're on a field trip out there looking at these burned up trees. We're working together on a bill called the Save Our Sequoias Act. And when I first got here in 2015, we could barely get any kind of forestry management bill passed out of the House. The Save Our Sequoias Act passed unanimously.

Then we went from there to the Fix Our Forest Act saying, "If this can work for the Sequoias, let's do it on a broad scale." Scott and I worked hours and hours together, and we came up with something we could both agree on.

I say this all the time: There's nothing we can do that's more proactive and better for the environment than to have a healthy forest. If we can't even keep our forest healthy, we've got problems. Our environmental laws aren't about protecting the environment when we can't keep our forests healthy. They're the lungs of the earth, as Teddy Roosevelt said. They're also the kidneys of the earth, because most of the drinking water in this country comes from water that falls on forested land.

I love Roosevelt's language. If you denude the landscape, you're taking everything off the landscape that holds the soil in place. You wash it into the streams, you kill fish, and you ruin our water. There's no downside to having a healthy forest, and that's what we're promoting with the Fix Our Forests Act.

SP: I had a guy from Arkansas who went to the Yale School of Forestry sit down and tell me about the Sequoias, which are my California Sequoias, right? No one from California had the expertise that Bruce had to save these trees. It was ironic, I think, that a lot of the pushback at the beginning came from the environmental communities that seemed more concerned to me at the time about not changing NEPA than they were about saving these iconic trees.

I think they were kind of embarrassed by their response to this, a lot of them, and have been much more constructive and have worked with Bruce and me on how to get this right.

We got overwhelmingly bipartisan vote in the House and this has passed and we're hoping the Senate takes it up soon, because I think it will have support in the Senate as well.

DM: The important thing that both of you all have highlighted is the fact that wildfires are not just a California or West Coast issue anymore. We're seeing wildfires in Georgia and Florida. This is a broader problem that we all need to figure out. How do we get the Fix Our Forests Act to the president's desk?

BW: It has two Democrat co-sponsors in the Senate. It's passed the Senate Agriculture Committee. If you take the two Democrat co-sponsors and the Democrats that voted for it in the Committee, it has the votes to pass the Senate. There's just a lot of cooks in the kitchen, and everybody's wanting to put their final mark on it.

It should have been passed long ago, but we work on it every day trying to get it across the finish line.

SP: I mean, I think the California electric bill is about a third wildfire management. San Diego Gas and Electric (SDG&E) did a lot of innovation around meteorology. They found that there are a lot of reasons why things burn. The benefit to my constituents of the Fixed Our Forest Act, in addition to the general environmental benefits of preserving habitat in the forest, is that the federal government will be doing its part. It will be paying its share and won't be in the way of fixing the forest in California, which is costing so much on our utility bills. I don't think people understand that as well, but that's a really critical cost control thing for us on our electric bills in California.

DM: That’s why we believe it's so critical to get this passed this year and get it to the president's desk. Let me focus on one last point: We all talk about the political division in Washington, but you two are a great example of a partnership that works. You work together on permitting reform. You’re working together on wildfires. How does that partnership work? What lessons can be learned so we can have more of these types of partnerships in Washington?

SP: I like solving big problems. I thought there would be more of that here. I thought that would be the natural thing, but some people are only interested in politics, some people are interested in TV, and some people are scared of their own shadow.

What we've learned is, if you see a big problem, you can follow the facts, you can start with the right answer, and you can build the politics around that. We’ve touched a lot of what people thought were third rails on the left, and there's no third rails. People understand that to solve the problem, you come up with the right answer.

That has not hurt me electorally one bit. People like that I work with the other side. Bruce is conservative. I don't want any Arkansans to think he's some sort of left winger. The thing is, we can agree on this kind of stuff, and he's got expertise that I can use.

I think it's fun to solve big problems. I want these bills to get passed, and I will feel like I have made a contribution as part of my congressional career if we do.

BW: I would agree with what Scott said. I served in the Arkansas legislature for a couple of terms before I came to Congress, and my background is engineering and forestry. I always define an engineer as a glorified problem solver. That's what you learn in engineering schools: how to solve problems.

I'm with Scott. I didn't come here to complain about things or to go on TV and make some point. I want to actually solve problems to make the country better. The way you solve problems is you figure out what the problem is. They teach you in engineering school to find the problem or come up with a plan, do the math, and present the answer. That’s really what you do in Congress. What's the problem? Here's the plan to fix it. Do the work. That last part's the hard part: presenting it and getting people to accept it.

You have to have people that you can work in good faith with that want the same objective. Who wants to see our forest burn down? Deep down, we all want to fix that. Who wants to see it take forever to build things in America, and who wants to see us fall behind China in lots of different areas? I don't think there's many people that fall into that category.

[President Ronald] Reagan said, “If you can get 80 percent of what you want, if you can agree on 80 percent of what's in a bill, you've got a tremendous win.” We live in an instant-information society, where you can find some problem with any kind of solution that's out there, and it's a lot easier to make a lot of noise about what was in the 10 percent or 20 percent that you couldn't get from an idealistic standpoint than to talk about the 80 percent that you get.

America’s electric companies are focused on providing customers with the energy of every day. They are prioritizing reliability and affordability as they position America to win the AI race and power the jobs, industries, and technologies of tomorrow.

An independent analysis conducted by Charles River Associates (CRA) recently found that average retail electricity rates have largely tracked inflation during the past several years—and that data centers are not driving up rates for customers throughout much of the United States.

EEI President and CEO Drew Maloney and CRA Energy Practice Vice President Matt DeCourcey joined a recent episode of the Electric Perspectives podcast to discuss the report’s findings, geographic variations, and the role of data centers in America’s energy landscape.

Drew Maloney (DM): I want to start by highlighting one key takeaway: For most U.S. electricity customers, retail rates have generally remained stable and have not outpaced inflation. This new research provides important context for why national average retail rates don't always reflect what customers are seeing at the state level. We're excited to hear more from you today about this, Matt.

EEI's member companies continue to work closely with regulators and policymakers to advocate for policies that keep customer bills as low as possible across the country, and the report highlights that electric companies are doing an effective job managing the cost that they can control.

Matt, can you give us an overview of how Charles River Associates analyzed data for this study?

Matt DeCourcey (MD): We started this process with the idea that we wanted to better understand what's been going on with rates—better understand how that compares to prevailing narratives.

We started with a data set of retail electric rates developed by the Energy Information Administration, giving us national average rates by month for 10 years. We also compiled a whole bunch of state-specific rates, going state-by-state for all the states excluding Alaska and Hawaii and including the District of Columbia.

We also used data from the Federal Energy Regulatory Commission’s Form 1 filing to give us very detailed financial data, including electric company spending on an account-by-account basis with great granularity. Because companies are regulated on a cost-of-service basis, we can understand how their costs are changing and how rates are changing.

We were able to look company-by-company, year-by-year, to see what’s changing, how that correlates with rates, and answers to questions around where things are happening and why.

The national average rate doesn't really reflect reality for most customers. It's sort of the perils of using averages from the conversation you had in your first-year statistics class. We found that there was a small group of companies that had big rate increases. For most companies and most states, the rates weren't increasing. That was an important finding for us.

We found that companies have been managing their costs well—and, in most places, rates have been pretty stable. That's a testament to cost control. It’s the work of the companies, the result of constructive regulation, and the efforts of policy makers in certain states.

We found that data centers—which a lot of people have pointed to as the culprits behind rate increases—haven't really been pushing up rates. With very, very limited exceptions, we found that the rates were going up for specific reasons that we could identify. Those reasons weren’t related to data centers.

DM: What's causing that national average to go up—which is so commonly cited by newspapers and things that we're reading?

MD: It’s rate increases in the small handful of states where rates have been increasing rapidly.

We looked at rate changes over 5 years and 10 years on a state-by-state basis. In California, rates have been going up dramatically in the last five years. That's because of wildfire spending.

In the Northeast, New England, and New York, rates have been going up because wholesale market prices have been going up. The companies buy electricity on behalf of their customers, and they pass that through in the rates. When the wholesale prices go up, the rates go up.

That puts a lot of upward pressure on that national average—just the nature of the arithmetic that goes into it. For most of the other companies and most of the other states, the rate increases had been very moderate.

The average doesn’t represent most of the states and most of the electric companies. In fact, something like 34 states had changes in their rates that were less than the national average. About half of the states saw rates that had gone up consistent with inflation.

We go from this story of broad-based nationwide affordability concerns to one of very local and specific trends.

DM: You mentioned data centers, which have been a very popular theme here in Washington—data centers and the cost associated with powering them. What did you find in your study?

MD: For starters, most data centers that we’re talking about haven't been built yet. When we look back at the history of rates, in most cases, it’s hard to see how they could have increased prices.

It's important to draw the distinction between the AI-training, mega-data centers that are on the horizon and dominating the news nowadays and the data centers that have always been in Northern Virginia for processing credit card payments and things like that. Those mega centers are the ones that we have concerns about causing rates to increase for retail customers across the board. It just hasn't happened yet, because most of them haven't been built yet.

When we look at rates historically, we see rates going up in California and in the Northeast, which is not where many data centers are planning to go. They're going to other places.

There is no evidence to support the idea that data centers have made rates go up. Where the rates are going up is not where the data centers are.

We found that there is this emerging set of principles in regulation and ratemaking that is designed very specifically to prevent rate increases from data centers from happening. The regulators are going about it in lots of different ways. What they're doing is making rates and setting rules that are going to require data centers to pay their own cost of service where electric companies have to make investments to serve data centers. Those costs are going to flow back to the rates to the data centers, and it's going to hold the existing customers harmless.

One interesting development of late has been some hyperscalers coming out and making very specific statements and very specific commitments that they're going to pay for all the costs to serve them. It's the emerging consensus, and a set of best practices is starting to form.

DM: We've seen more than 25 states either enact large load tariffs or consider agreements that will protect customers and enhance the grid over the long term, right?

MD: Yes. When you look at that universe of rate making, all those tariffs look different. There are a handful of mechanisms that are going to make it so that, if a data center wants to connect to the grid, they have to bring the capital and make commitments

And, you're right, there's potential benefits for existing customers. There are investments to be made on the grid. There's also the potential that data centers reduce the cost of retail service for some customers. If you have a new large load customer show up on the grid, and it is paying its own costs, it's going to absorb some of the shared costs. That's going to benefit the customers that are already there.

DM: If you were advising policy makers, regulators, and other decisionmakers on key takeaways from this report, what would they be?

MD: Everything is local.

If you're a policy maker or a regulator considering intervening in a market, understand the problem that you're intervening in and what the solutions would be to consider. If I am in California, and I wanted to intervene in the market, I'd want to think about how we pay for wildfire costs. How do we think about some of the rooftop solar ratemaking concerns that the California Public Utilities Commission has said is also making rates go up for some customers significantly?

If I was in the Northeast, I'd have a very different set of questions. I'd be asking about how we unlatch ourselves from volatile wholesale markets. Do we make investments? Do we change the rules? Do we let electric companies own generation?

Elsewhere, I might wonder whether I have to intervene. Do I have evidence that there is an affordability crisis within my jurisdiction? If so, what do I do about it? There have been rates that have gone up, but, mostly, the markets and the systems have been working as designed in most places.

My other consideration, if I was a policy maker, would be what the industry's responsibility has been. It seems like, in most places, costs are being managed well. We haven't found any evidence to support the idea that the rates are going up because of mismanagement, poor planning, or because of something that should have been foreseen and wasn't.

We don't have any evidence—and, frankly, we don't think it's the case—that companies are profiting from these increases in the rates. The nature of the increases, in most cases, is they're collecting operating expenses that pass directly through to customers at cost. No markup, no profit for the shareholders. They're highly regulated at the state level.

If I was a regulator or a policy maker, I would be very reluctant to do things like curtail returns or anything that would erode the financial integrity of companies and impose penalties. It's just not warranted, and it wouldn't be appropriate.

DM: Let me ask about affordability. You all looked at Americans’ energy wallet and how that's changed over a 20-year period. What did you see in the data?

MD: Generally, the share of the energy wallet has been declining. We looked at how much of your average household budget is consumed by electricity. It’s not a huge band that we’re looking at.

We had a couple decades of data, and it only moves from 1 percent or 2 percent or 3 percent of total household budget. Over time, it is showing a steady decline downwards, which is to say that, over time, less of the average household’s budget is going to electricity.

That’s driven by a lot of things. That’s driven by costs that are fairly stable and by efficiency programs and efficiency of appliances. Society, as a whole, became more efficient over time. The impact on affordability is that, over time, the industry is requiring fewer dollars every month from your average household. It’s less than 2 percent.

DM: How do you differentiate between bills and rates?

MD: We looked at residential rates, because we think those are going to be of greatest interest to most customers and to policymakers. For your average household, it's the residential rate that sets the total cost of energy every month.

When you multiply total usage by the rate, you get the total bill. The bill is a function of both the rate and energy usage, both of which can change over time.

DM: The White House recently announced an agreement with governors that EEI has broadly supported to make changes to the PJM marketplace. What's your view of that announcement?

MD: It's interesting, and we'll be watching it closely to see where it goes. It actually tells us a lot about how we're going to look at data centers entering the market going forward.

It's not clear what comes of the announcement, specifically, but what it does tell us is that policy makers are going to intervene to protect existing customers from the potential of cost increases due to data centers. It’s one of these emerging principles in the industry that, where large loads and data centers are entering the market, they're not going to be subsidized by existing customers.

DM: Do you see companies getting into the generation business in PJM and other regions as one of the possible solutions here?

MD: It could be. One of the things that differentiates the impact of this most recent PJM capacity auction is that they're much more sharply felt in the states where the companies have divested their generation.

Having generation is a natural hedge against variation in the market. That's axiomatic. This is a variation in the market, so if all else is equal, companies that own generation on behalf of their customers would be better insulated from price shocks like this.

America’s electric companies work 24 hours a day, 365 days a year to power the American economy and ensure the United States is home to the jobs, industries, and technologies of tomorrow.

They are working with tech companies, hyperscalers, and data centers to power the next wave of American innovation—while delivering clear benefits to the grid and existing customers.

Entergy Mississippi President and CEO Haley Fisackerly and Amazon Web Services (AWS) Head of Energy and Water for the Americas Brandon Oyer joined the Electric Perspectives podcast to discuss data center and electric company partnerships and a new electric rate and tariff study from Energy and Environmental Economics, or E3.

Following is an abbreviated transcript, lightly edited for length and clarity. To listen to the full episode and catch up with other recent interviews, visit electricperspectives.com/podcast.

Electric Perspectives (EP): Brandon, tell us about your role at AWS and how you work with energy partners, including Entergy Mississippi.

Brandon Oyer (BO): As the head of power and water here for the Americas with AWS, I have the distinct privilege of working with a bunch of very bright people around the country and in Canada, Mexico, and South America. We get to work with utility partners to craft rates and contracts that power AWS on time and at a cost that delights our customers, while at the same time making investments into local communities—from the East Coast to the West Coast to the middle part of the country.

I continuously get to see opportunities to innovate and refine how we power data centers responsibly, how we power them reliably, and how we power them in a path to continue being clean.

That's fun. It's a challenging role. The times are exciting, and we're growing. It's fun to see the United States electric grid growing at a high rate in comparison to history.

We like to look around corners and make sure that we're doing the right thing for the communities that we live in. We want to make sure our customers aren't being burdened on their electric rates.

That's why we think this E3 study is important. We took time to dive in and learn here, so I look forward to talking about it a little bit more.

On the economic development impact, in Madison County, Miss., we're investing $10 billion to build two data center campuses, creating at least 1,000 full-time jobs. In Warren County, Miss., we're investing $3 billion—the largest private investment in the county's history. We’re creating another 200 jobs at that data center campus while supporting 300 additional jobs in and around the community.

Combined, these investments will support an estimated 3,000 jobs to bring these data center campuses to life and add $3.9 billion to Mississippi's GDP. These are high-paying jobs, including data center engineers, network specialists, operation managers, and security specialists.

EP: Haley, tell us about Entergy Mississippi’s customers and the communities that you serve?

Haley Fisackerly (HF): Sure. Entergy Mississippi is one of the five operating companies of Entergy Corporation. We serve 460,000 customers in the western part of Mississippi, in 45 of Mississippi's 82 counties. We've been serving the area since 1923.

About 60 percent of our customers are coalesced in what we call the metro area around the capital city of Jackson, Miss. That’s where AWS is making most of their investments.

Most of the 45 counties that we serve are in very rural areas—a lot of agriculture. In Jackson, there's a very diverse mix of businesses, education, some manufacturing. We haven’t historically had a large industrial base in Mississippi like our sister companies in other states. We have more residential and commercial customers, so having a large customer like AWS definitely changes our profile from that standpoint.

EP: Tell us more about the E3 study and its key takeaways.

BO: The No. 1 finding from that study is that Amazon data centers are not being subsidized by their utility customers. There’s no cross-subsidization between a residential customer and a large-load customer, such as an Amazon data center.

We've seen this study after study. If you look at the Joint Legislative and Audit Review Committee, they published similar findings in 2024. If you look at the Lawrence Berkeley National Lab report that was released earlier this year, it found the same thing.

We actually find that these investments are enabling companies to make investments for the broader grid. Historically, customers would have to pay for this, but now that large load is coming along, these bigger customers are able to absorb that cost.

We find that data centers generate surplus revenues to the costs of producing and delivering electricity—on the order of about $33,000 per megawatt in 2025, growing to $60,000 per megawatt in 2030.

This surplus revenue enables the electric companies to continue making investments while not causing cross-subsidization. And, these crucial investments in grid infrastructure do everything from meeting immediate needs to supporting local residents to driving commercial growth while improving reliability. It’s a fun time to be a part of this.

EP: Haley, how is your team at Entergy Mississippi working with large customers like Amazon, and how does this work strengthen the grid and deliver value to your customers?

HF: Brandon touched on a good bit of this. If you take a moment to think about our industry, we have extensive infrastructure that we use to serve our customers: power plants, transmission lines, distribution lines, and a lot of these are fixed costs.

At the same time, we are facing aging infrastructure, the need to reinvest, weather risks that are impacting our business, and customer expectations. We are more dependent on electricity to power our lives and to support the way we work than ever before. That means there’s a lot of demand on the grid.

We’ve known that we need to make grid investments. Sadly, without demand growth in our area, the cost of our business was escalating very quickly. More than 20 percent of our customers live below the national poverty level. A large portion are living paycheck to paycheck. Affordability is a No. 1 issue for us.

What we’re able to do with Amazon is bring in this large customer with all the other benefits that Brandon discussed: new jobs and huge capital investments that are allowing us to make meaningful investments and improve the grid serving all of our customers.

We're also seeing them pay the full freight of their costs. We're having to make upgrades to the transmission system that improves import capabilities that benefit everyone, and they're paying those incremental costs. Substations that will have to be built to serve their facilities—they're paying 100 percent of those costs.

What is more exciting about this, and it makes me excited, is that we know we've got to invest to improve reliability. We had a $600 million capital plan already planned just to make the investments to improve our grid. Because of the new revenues coming in from AWS, we're going to be able to increase that by more than 50 percent—spending another $300 million on our reliability plan.

All of this will bring huge value from better service, more reliable service, and at a more affordable rate. In fact, because of AWS, we were able to pull a lot of those investments forward and improve reliability. We have a 50-percent reduction in outages with a 50-percent increase in spending, with no cost to customers. This is exciting, transformative, and it will make a difference in the lives of our customers and the communities we serve.

BO: There is a narrative out there that data centers are driving up costs. Haley, since we first started working together, back in 2023 and 2024, have you seen any shift in our thinking on this? Have you seen a shift since that narrative started to take hold?

HF: I’ve been in this business for 30 years and CEO of this company for 17 years. I’ve negotiated a lot of deals. Amazon and AWS were totally different characters. You were very cognizant of making sure this would not adversely impact customers and communities.

There has been a need for speed to market, service reliability, and recognition that these costs need to be covered.

Of late, there has seemed to be a lot of misinformation and confusion out there about what is driving rates.

In Mississippi, there was legislation passed to make this deal happen. The governor, the Mississippi legislature, and the public service commission were very supportive of the economic opportunity and made it very clear that this cannot harm existing customers. The legislation states specifically that, in my words, AWS is to pay their incremental cost to serve and provide benefits back to customers.

These new investments in the grid, from new generation down to enhanced transmission, are going to improve capabilities that benefit everyone.

EP: Brandon, how is your team working to support communities like those in Warren and Madison counties?

BO: In addition to paying our fair share, I do want to highlight that this isn't something new for us. This has been an operating tenet for Amazon for quite some time. Defining a good rate structure and providing impact to the community has been table stakes for us.

We're making significant investments, and we’re spending time and money to enable the local workforce. That's an important trait when we go and grow our business. We’ve partnered with Mississippi to build a skilled workforce for the future by partnering with Mississippi AI Innovation Hub and the AI Talent Accelerator program.

We’ve invested nearly $400,000 into the Bean Path, which is a Jackson-based AI tech educational nonprofit that's impacted 8,000 Mississippians. We're also proud to have the first cohort completed of the Infrastructure Pre-Apprenticeship Program in Holmes Community College.

These programs represent a commitment towards creating direct pathways from education to employment. We’ve also launched the Amazon Warren County Community Fund and invested an initial $150,000 to be managed by a non-profit, Change X. That grant supports local initiatives focused on science, technology, engineering, and math education; sustainability and environmental programs; digital skills; cultural and heritage programs; and health and well-being initiatives. It's open to individuals, community groups, schools, and nonprofits all across Warren County.

These are just a couple of the things that we do that impact the customers around us. We just want to have a lasting, positive impact and be a good partner in the communities where we operate.

EP: Haley, Entergy's long been a leader on workforce development and making sure that you're having positive community impacts. What have you all been seeing, and how does Amazon’s work complement the work that your team is doing?

HF: I'm a fourth-generation Mississippian, and I am so excited by what we're seeing here. We have struggled with brain drain and jobs being lost. Amazon has come in, and we have now brought in a new sector that’s creating new job opportunities for young people.

The $10 billion minimum that Amazon is investing in Madison County is expected to generate an incremental $80 million per year in ad valorem taxes. Half of that goes to the local school district. Think about the young lives that are going to be changed.

The infrastructure improvements, the water system improvements, the road improvements from this mean that local taxes won’t have to be raised for some time because of the revenue coming in here.

More than 55 local businesses have received contract work or work directly at these data centers. These are often small mom-and-pop businesses, though they can also be very large companies.

We have seen manufacturers in Mississippi announce expansions to make the components used by data centers and the electric power industry. More than 2,000 jobs have been created so far, so the ripple effect is like one we've never seen before.

We've worked with a lot of great companies that have come in and made investments, but it's usually been made after they have built out their facilities, and they're up and running.

Amazon came in earlier, started to work with local educational groups, looked at training opportunities, and looked at other partnerships as they’ve been building this out. When you think about all of those different businesses that are benefiting from this, the tax revenue coming in, that has a positive impact on local individuals and families.

EP: Electric companies are always looking to balance affordability with reliability. Haley, how do these projects align with your efforts to deliver both of those things for customers?

HF: I mentioned earlier that we were faced with this dilemma when we knew we had to make a lot of investment in this region, and we were not growing here in Mississippi. What Amazon has allowed us to do is pull those investments forward. For example, we knew we would have to build two new power plants post-2030. We knew that we had an opportunity to deploy more solar renewables and batteries.

The fact that we were able to pull those projects forward means we're saving customers more than $2 billion. These plants are also much cleaner.

They use less water. They also are much cleaner technologies. They will have carbon capture capabilities and the ability to use hydrogen if and when that becomes economic. That alone will save more than $700 million in commodity costs for our customers.

We're also dealing with more storm costs every year. Now, having a large customer like Amazon at the table means we can share in those fixed costs and create rate relief for our customers. It’s a huge value in the sense that a large customer is now helping share in the cost of large investments.

We're doing things right now that we would not have been able to do had this opportunity not come forward with Amazon.