Faced with forecasts of soaring energy demand, U.S. states are urging ways to build new power plants as policymakers are increasingly concerned about increasing electricity bills, power outages and other consequences to protecting their residents and economies, falling behind the consequences of large-scale technology in an electric race.
Some states are hanging economic incentives. Others are regulatory structures for decades as they form a race that meets the basic needs of residents, avoid disasters, and keep their economies on track in a fast society.
“I don’t think we’re seeing anything like that,” said Todd Snitchler, president and CEO of the Electric Power Supply Association, which represents the owners of independent power plants.
Demand for electricity surged as tech companies were snapping up real estate and seeking power to develop energy-hungry data centers. Federal incentives to rebuild manufacturing industries also help drive demand.
In some cases, Big Tech is arranging its own power projects.
But energy companies are also looking for the opportunities for a significant increase in electricity consumption for the first time in decades, which puts national political leaders against each other’s new work and investments brought by new power plants.
The states’ moves are fossil fuels – friendly President Donald Trump and Republican-controlled Congress take power in Washington, D.C., cut regulations around oil and gas, increased drilling opportunities, and encouraged the construction of pipelines and refineries that can export liquefied natural gas.
States are seeking action, and the National Governors Association asks Congress to make it easier and faster to build power plants and criticize the United States as one of the slowest countries to approve energy projects.
But the federal government may do less immediately with the looming power shortage, as green light plants feed the grid, which is largely a province for state regulators and regional grid operators.
Pennsylvania Governor Josh Shapiro wants to set up an agency to quickly build large power plants and to provide electricity to the grid.
Shapiro said the state and the country need more power plants to win the AI competition and provide residents with reliable and affordable power.
“In the past few years, due to how slow the PJM cohort has been, it has proved difficult to get enough new generation projects,” Shapiro said in a February 27 press conference.
Indiana, Michigan and Louisiana are exploring ideas to attract nuclear power, while Maryland lawmakers are floating about building new power plants there.
In Ohio, lawmakers want to limit the impact of power companies in a bid to give independent power producers more incentive to build power plants to feed the state’s rapidly growing technology sector.
The bill awaits a vote, winning the support of Ohio consumer lawyers, the state’s residential taxpayer regulator, and business groups whose members care about electricity prices. However, it will split the energy sector between companies operating in competitive markets and companies operating under the state utility monopoly.
In Missouri, utilities including Ameren and Evergy, as well as the Missouri Chamber of Commerce, unions and the state’s highest utility regulator are supporting legislation to repeal an old law that has been nearly half a century to prevent utilities from charging customers to build power plants from customers until operations.
The law was approved in a voter referendum in 1976, when states sought to hedge utilities to raise funds in advance, potentially bloated, inefficient or worse, suspend power projects.
Consumers and environmental groups protested the bill, saying it would make new gas plants more expensive for taxpayers.
Last year, similar legislation was almost unanimously passed in Kansas, with peer legislation extending tax relief to new power plants.
Within months, Evergy announced the construction of two 705 MW gas plants with the state’s leaders, and said the legislation would “help Kansas compete with other states for investment and ultimately save money for its customers.”
Utilities are playing the role of two states, Missouri and Kansas, against each other and planning to build power plants anyway, said John Coffman, a utility consumer counsel for the Missouri Consumer Commission.
But, he said: “They are just looking for opportunities to squeeze out more money from the process.”
Snitchler said states are aware that electricity reserves are declining for a long time, especially as coal and nuclear power plants retire, and now all kinds of power companies are struggling to make money.
The trap he saw in the race to build plants was the removal of protection measures that some states once adopted and put expensive power projects at risk for company shareholders.
“The problem is certainly shifting the risk to people who may not be able to bear it,” Snitchler said.
Pennsylvania Senator Gene Yaw hopes to build a large-scale power plant fund like Texas that has set up a $10 billion low-interest loan program after the state was damaged by a deadly winter blackout in 2021.
Republicans are staggering no doubts about Pennsylvania, helping to fund power plants. He said even by conservative estimates, the state needs dozens of power plants to meet rising demand forecasts.
“What or plan are we doing now? Yaw said, nothing. We haven’t built anything since 2019. So we have to do something that encourages people to come here and build in Pennsylvania, just to keep things going.”
publishing – March 10, 2025 09:04 IS
