5 Key Takeaways From House Energy and Commerce Committee Hearing on the Grid and AI
Featuring testimony from Duke Energy's Nelson Peeler.
On Wednesday, the House Energy & Commerce Committee held a hearing about rising energy demand, serving data centers and large loads, and prioritizing affordability for customers.
Nelson Peeler, Duke Energy Senior Vice President for Grid Strategy, Planning, and Integration, stressed to lawmakers that “large new electricity customers, if integrated into the grid responsibly, present local economic development opportunities and can limit rate growth by spreading the fixed costs of the grid across a larger base.”
Watch a recording of the hearing, and see below for highlights and key takeaways:
1. The Regulated Business Model Benefits Customers.
Electric Perspectives:
A vertically integrated utility under state oversight has the ability to be close to customers; execute contracts with customers, for example, data centers and large loads; forecast that load effectively with binding contracts; and then evaluate which solutions are most economic, whether that’s a transmission line, a generating resource, a storage resource, use of demand-side management, or the right combination. That provides the most cost-effective solution.
- Duke Energy's Nelson Peeler
2. Companies and Regulators Are Protecting Customers From Added Costs.
Electric Perspectives:
The biggest way we’re isolating [data center] costs currently is by using specialized tariffs, with energy services agreements on top of them, and requiring all costs within the confines of the agreement be paid by the company that needs the energy. … We’re having them pay for the estimated costs, and, generally, we have them pay a little bit more … which puts downward pressure on rates.
- Arizona Corporation Commission Chairman Nick Myers
Under the oversight of our regulatory commissions, we are implementing well-designed arrangements to ensure large-load customers pay their own full cost, enter long-term service arrangements that reduce stranded-asset risk, and provide financial security measures that protect existing customers.
- Duke Energy’s Nelson Peeler
3. One-Size-Fits-All Data Center Solutions Are Unrealistic.
Electric Perspectives:
In the end, there's a lot of local distinction. What's best for Georgia is not going to be the same as what's best for Arizona. And we should respect those local differences.
- Large Public Power Council President Tom Falcone
Respecting regional judgment is also critical as new large-load customers come online, because the costs and benefits of growth should be managed locally.
- Duke Energy’s Nelson Peeler
4. Grid Investment Will Be Critical to Meeting Demand.
Electric Perspectives:
To meet growing demand we're seeing across our service territory, we are investing over $100 billion during the next five years to add 14 gigawatts of new capacity and associated network transmission to our system—enough energy to power 10.5 million homes.
– Duke Energy’s Nelson Peeler
In this time of load growth, bill pressures, and more, we need action to maximize the existing grid and expand transmission capacity. … What we need now is investment, technology deployment, and steel in the ground to meet the demand of the moment.
- Muse Energy President Whitney Muse
5. Grid-Enhancing Technologies Are Making the Most of Existing Assets.
Electric Perspectives:
We are expanding and modernizing our transmission system through a combination of new lines, strategic upgrades, and deployment of grid-enhancing technologies, such as advanced conductors. We coordinate closely with regional grid operators and state regulators to ensure projects are properly scoped, cost-effective, and aligned with system needs.
- Duke Energy’s Nelson Peeler
The important thing is to support and encourage technologies without mandating their use. A lot of these really depend on the use case.
- Large Public Power Council President Tom Falcone