At a Glance:
- Data centers, AI, advanced manufacturing, and electrification are driving rapid demand growth and putting new pressure on the grid.
- Competitive power markers ensure that new generation is built efficiently, keeping costs off of ratepayers while meeting reliability needs.
- Permitting reform and disciplined forecasting are critical to delivering reliable, cost-effective electricity as demand grows.
EPSA President and CEO Todd Snitchler testified Wednesday in front of the U.S. Senate Committee on Energy & Natural Resources. The hearing focused on the state of the bulk power system, the imbalance between electricity supply and demand, and the critical need to maintain affordability. Other witnesses included industry experts: Travis Fisher, Director of Energy and Environmental Policy Studies at the Cato Institute; and Dr. Liza Reed, Director of Climate and Energy Policy at the Niskanen Center.
The Grid Is Under Pressure
Electricity demand is rising rapidly, putting new pressure on the power system.
In his testimony, Snitchler emphasized that the U.S. has entered a period of significant demand growth, driven by data centers, artificial intelligence, advanced manufacturing, and electrification. He noted that while the scale and timing of this demand remains uncertain, the growing need for more electricity is not.
“It is not an overstatement to say that our nation is at an inflection point relative to demands on the electric grid,” Snitchler said.
Markets, Investment, and Reliability
Competitive markets are driving new supply while protecting consumers from unnecessary costs.
Much of his testimony focused on the role that competitive markets play in balancing reliability and affordability. He explained that unlike traditional utility models, competitive power suppliers take on the financial risk of their investment decisions—protecting customers from unnecessary costs.
“If competitive power suppliers make investments that prove to be inefficient or unnecessary, the investors bear the cost of that mistake,” Snitchler said. “The risk of investing in generation remains on the developers and owners of power plants – not the ratepayer.”
He also pointed to PJM as an example of how markets respond to changing conditions. After several years of historically low capacity prices, recent auctions signaled the need for additional generation. In response, competitive suppliers have moved to bring forward more than 12 gigawatts of new capacity through new investment, uprates, or delayed retirements.
In addition to market structure, Snitchler also identified permitting reform as one of the most impactful steps Congress can take to improve reliability and control costs. He mentioned that “there are more than 71 gigawatts of resources through the queue in the PJM Interconnection that are not yet adding electrons to the system or under active construction and development.”
He also addressed concerns about rising electricity bills, pointing to recent studies that show that increases in retail rates have been driven largely by transmission and distribution spending—not generation.
Finally, in his testimony, Snitchler cautioned against proposals to return to utility-owned generation, warning that doing so would shift financial risk back onto consumers.
“Reversing course to allow monopolies that haven’t built generation in decades to suddenly put ratepayers back on the hook for new assets overlooks the core reliability and affordability tenants that prompted the creation of competitive markets nearly thirty years ago.”
Planning for What Comes Next
Better forecasting and smarter policy decisions will determine whether the grid can keep pace with demand.
During the question-and-answer portion of the hearing, Committee Chair Mike Lee (R-UT) questioned Snitchler about load forecasting—a key challenge currently facing the power sector, especially as electricity prices are still continuing to rise.
In response, Snitchler explained that when data center developers and hyperscalers are shopping around for the best power, they can often produce significant inaccuracies in load forecasting due to double counting.
In his testimony, Snitchler states, “Thoughtful load forecasts take time and require more than basing projections on mere inquiries, and EPSA understands that the nation must move quickly to encourage and provide an adequate electricity grid for these investments. But allowing unrealistic or speculative projects to skew demand assumptions – instead of demanding disciplined forecasting – will only harm ratepayers by increasing costs and adding resources that may or may not be needed.”
Ranking Member Martin Heinrich (D-NM) also raised questions about the rapid growth in electricity demand from data centers and how associated costs should be allocated, to which Snitchler responded that large new loads should not shift costs onto existing customers, pointing to voluntary bi-lateral agreement and co-location arrangements as a solution.
The Bottom Line: At a time when the grid is under increased pressure, demand is rising, and so are electric bills, EPSA continues to advocate for solutions that protect consumers and ensure the power system can reliably meet rising demand.
Read Todd Snitchler’s full testimony.
