What April’s House Energy hearing revealed about rising demand, grid readiness, and the role of competitive power markets.
Last week, the House Energy & Commerce Committee’s Subcommittee on Energy held a hearing on one of the most pressing challenges facing the U.S. energy system: how to meet rapidly rising power demand driven by artificial intelligence and data centers, and how to best protect ratepayers while still winning the AI race.
The discussion closely tracked issues competitive power generators are actively addressing across the U.S. today.
Subcommittee Chairman Bob Latta underscored the stakes, noting that “access to reliable and affordable energy is the linchpin to U.S. leadership in AI development,” and that “AI is one of the defining challenges of our time.” He pointed to the fact that demand growth continues to outpace generation resources, with the North American Electric Reliability Corporation’s recent yearly assessment estimating that peak demand over the next ten years would grow by 224 GW alongside 105 GW of expected dispatchable generation retirements.
EPSA President and CEO Todd Snitchler has similarly highlighted that the U.S. is approaching an inflection point in electricity demand, while emphasizing that competitive power markets remain the most efficient and transparent way to meet that demand while protecting consumers. In testimony before the U.S. Senate Committee on Energy & Natural Resources on the state of the bulk power system delivered this March, Snitchler noted that “Over the last 25 years, competitive markets administered by ISOs/RTOs have definitively proven to be the most efficient and transparent way to meet our nation’s electricity needs at the lowest cost while protecting electricity customers from inefficient investment.”
While perspectives at last week’s hearing varied, the discussion reinforced a central reality: the United States is entering a new era of electricity demand growth that will require thoughtful policy, disciplined planning, and significant new investment while ensuring that average Americans don’t have to pay more than necessary to support data center growth. With utilities poised to spend record amounts on energy infrastructure in the coming year and calling to once again own and build generation in competitive electricity markets, getting this right is more important than ever.
Below are five key takeaways from the hearing, highlighting hearing themes and areas of consensus, along with our insights on how competitive power generators are already delivering reliable, cost-effective solutions to meet this moment.
1. Data Center Growth Shouldn’t Shift Unnecessary Costs to Households
Amidst the support for ensuring America wins the AI race, lawmakers from both parties agreed that households should not subsidize the infrastructure costs required to support data center growth.
This aligns directly with the cost-causation principles competitive power markets are founded on: those who drive costs should pay for them.
Competitive power markets are uniquely suited to enable the development of new supply while protecting consumers from unnecessary costs. Unlike traditional vertically integrated utility models, in competitive markets:
- Developers invest based on market signals—not guaranteed cost recovery
- Financial risk is borne by investors, not ratepayers
- Inefficient or unnecessary investments do not flow through to customer bills
As AI-driven demand grows, maintaining strong competitive power markets will be critical to preventing avoidable rate increases and protecting consumers.
2. Better Load Forecasting Is Essential to Prevent Overbuilding and Unnecessary Costs for Consumers
Lawmakers also raised concerns about forecasting demand in an environment where data center development is both rapid and uncertain. The Committee’s Ranking Member Frank Pallone emphasized that “Improving the accuracy of electricity demand may be critical to ensuring that we’re not making families pay for data center-related grid infrastructure that is never needed.”
Load forecasts are shifting rapidly. Projections can swing dramatically when speculative projects are filtered out or when developers are required to make financial commitments. In one case, a projected 30 GW data center load dropped to just 5.7 GW after more rigorous scrutiny. That puts ratepayers at significant risk should power plant investments approved by regulators turn out not to be needed.
EPSA emphasizes the need for disciplined, transparent load forecasting to avoid overbuilding and stranded costs. This requires prioritizing projections in real, financed projects, not speculative demand projections. Thoughtful load forecasting takes more time, but relying on skewed demand assumptions will only distort investment decisions and drive up costs for ratepayers by adding resources that may not be needed.
In vertically integrated regions, those risks are magnified. Customers can be left paying for stranded assets for decades. Competitive markets help mitigate this risk by tying investment to real market signals and ensuring that the costs of unsuccessful or unnecessary projects are borne by investors—not reflected in customer bills.
3. Maximizing Existing Infrastructure Is the Fastest, Lowest-Cost Solution
Lawmakers pointed to opportunities to improve efficiency through advanced transmission technologies and AI-enabled tools that accelerate grid operator studies and interconnection processes. The Subcommittee’s Ranking Member Rep. Kathy Castor noted that the grid currently operates at roughly 53% of its total capacity, while Rep. Diana Harshbarger highlighted a case where a single interconnection study step was reduced from two years to ten days.
Maximizing the grid also means making better use of existing infrastructure. Upgrades such as uprates, fuel conversions, hybridization, and reactivations can bring new capacity online faster—and often at lower cost—than building new facilities from scratch.
Competitive generators are already deploying these solutions. EPSA members, including AlphaGen, Calpine, Constellation, LS Power, NRG, Talen Energy, and Vistra, are already investing to add and preserve and expand the capacity of thousands of megawatts of reliable capacity across U.S. power markets. These market-driven investments are helping meet near-term demand while longer-term infrastructure is developed, serving as a critical bridge during a period of rapid load growth.
At the same time, companies including Constellation, Invenergy, and Vistra Corp. are working with NVIDIA and Emerald AI to pioneer flexible AI factories that bring artificial intelligence capacity online faster, support larger and faster interconnections, and boost grid reliability.
Near-term reliability challenges require solutions that can be deployed quickly. Maximizing existing infrastructure—supported by competitive markets—is one of the fastest and most cost-effective ways to meet rising demand.
4. Competitive Power Generators Are Already Responding to Rising Demand from Data Center Growth
While the hearing reflected urgency around the scale of investment needed to meet future demand, competitive generators are responding.
Developers are deploying private capital to build new generation based on market signals—not guaranteed cost recovery. Competitive power suppliers have announced more than 12,000 MW of new capacity in the PJM region alone since mid-2024.
Last Wednesday, PJM announced that over 800 generation projects, capable of producing 220 gigawatts of electricity, applied to connect to the grid through the first cycle of PJM’s reformed interconnection process.
These trends demonstrate that competitive markets are working: price signals are driving investment, and developers are responding with innovative, reliable, and efficient approaches to meet demand.
5. Competitive Markets Deliver Cost Discipline and Consumer Protection
Some utility representatives have argued that vertically integrated utilities are best positioned to meet rising demand given that their monopoly over generation, transmission, and distribution allows them to plan, build, and operate across the full electricity system.
However, that model relies on centralized planning and ratepayer-backed cost recovery, which can expose consumers to significant risk when demand forecasts change or projects fail to deliver as expected.
Competitive power markets, on the other hand, have more than two decades of proven results delivering cost savings, innovation, and reliable electricity—outcomes that are especially critical in today’s environment.
Unlike vertically integrated utilities, competitive generators must compete to provide power at the lowest cost, without guaranteed returns or captive customers. They invest based on market conditions and bear the financial risk of those decisions.
Utilities, by contrast, can recover costs—and earn a guaranteed return on equity—through customer bills, even when projects run over budget or are never completed.
While all project developers face challenges such as permitting delays, supply chain constraints, and workforce limitations, competitive generators bring decades of experience delivering projects efficiently without shifting those risks onto consumers.
What’s Needed From Policymakers:
The hearing offered a number of thoughtful proposals from legislators to address load forecasting uncertainty, consumer impacts, and barriers to development. To meet rising demand while protecting consumers, policymakers should:
- Enable competitive market solutions that allow hyperscalers and other large customers to pursue private arrangements, funded by private capital, without shifting costs onto ratepayers.
- Strengthen load forecasting practices to prevent overbuilding and stranded costs, and avoid cost-of-service approaches or other policy choices that place investment risk on consumers.
- Advance comprehensive permitting reform to accelerate the development of generation, transmission, and enabling infrastructure.
- Address and avoid policies that prompt premature retirement of dispatchable power plants or discourage energy infrastructure development of all kinds.
- Maximize and preserve existing capacity to deliver near-term reliability at the lowest cost.
- Preserve competitive market structures to maintain cost discipline, drive efficient investment, and protect consumers.
- In regions with restructured electricity markets, policymakers should not reverse course on competition. Allowing vertically integrated utilities to rebuild generation portfolios through ratepayer-backed funding would shift risk back onto consumers.
EPSA continues to advocate for comprehensive permitting reform, targeted solutions such as The GRID Act, and policies that enable infrastructure development of all kinds.
Bottom Line:
The United States must scale its power system to support AI-driven growth—while ensuring reliability and cost-effective outcomes for consumers.
Competitive power markets are already delivering the investment, innovation, and cost discipline needed to meet this challenge. The priority now is to adopt policies that enable these markets to work—not shift risk and cost onto consumers.
