- Will Sen. Joe Manchin get his comprehensive permitting reform bill passed? With provisions to streamline infrastructure approvals, it cleared his committee by a bipartisan vote of 15-4.
- In an annual auction, PJM, the largest grid operator, has to pay eight times as much as last year for capacity as demand rises and plants are retired. Maryland’s ratepayers will suffer, with increases up to 24% next year. That’s a burden and a wake-up call.
- The Energy Department deploys $2.2 billion across 18 states to enhance America’s shaky electric grid.
- Amid the boom in natural gas production, an appeals court, acting on a Sierra Club suit, further delays two LNG projects.
- In California, tempers are flaring as utility rates skyrocket while the state tries to achieve an aggressive zero-emissions goal.
- AI needs so much power that plans are being laid to direct natural gas straight to data centers. North Dakota official says companies want to invest as much as $125 billion.
Manchin’s Permitting Reform Bill, With Major Changes to Speed Infrastructure Development, Is Approved by Senate Committee
Sen. Joe Manchin (I-WV) is leaving Congress at the end of the year, but he is still pushing for comprehensive permitting reform. His long-awaited bill was passed out of the Senate Energy and Natural Resources Committee, which he chairs, on July 31 by a bipartisan vote of 15-4.
The Energy Permitting Reform Act of 2024, which Sen. Manchin co-sponsored with the committee’s ranking member, Sen. John Barrasso (R-WY), seeks to strengthen U.S. energy security, streamline and simplify the energy infrastructure permitting process, hold costs down for consumers and businesses and improve the reliability of the grid.
Eight Republicans – all those on the committee except Sen. Josh Hawley (MO) – voted to report the bill to the floor. Only two of eight Democrats, Sens. Ron Wyden (OR) and Mazie Hirono (HI), as well as Independent Sen. Bernie Sanders (VT), voted against advancing the bill out of the committee. Of course, Independent Manchin, who, like Sanders, caucuses with the Democrats, voted in favor.
“The United States of America is blessed with abundant natural resources that have powered our nation to greatness and allow us to help our friends and allies around the world,” said Sen. Manchin. “Unfortunately, today our outdated permitting system is stifling our economic growth, geopolitical strength, and ability to reduce emissions.”
The bill, Sen. Manchin said, “will advance American energy once again to bring down prices, create domestic jobs, and allow us to continue in our role as a global energy leader.”
The need was evident to both Democrats and Republicans. Quill Robinson of the Center for Strategic and International Affairs (CSIS) wrote that “the federal permitting process has proven to be a chokepoint, slowing the deployment of the clean energy infrastructure necessary to meet the United States’ climate goals.” Robinson added:
According to one study, 80 percent of the IRA’s 2030 emissions reduction potential could be lost if transmission expansion remains at the current rate of 1 percent per year. The need to streamline the permitting process has brought Democratic climate hawks on Capitol Hill into the permitting reform conversation.
Among its provisions, the bill sets deadlines for modifications and reviews of leases on federal lands. Compliant projects of all sorts – from solar and wind to oil and natural gas – will be able to keep operating and take advantage of energy sources throughout the country.
The first section of the legislation sets a 150-day statute of limitations on judicial reviews or petitions to deny authorization of an energy or mineral project. It also requires “that if a court remands a federal agency authorization for an energy or mineral project back to the agency…the court must set a reasonable schedule and deadline, not to exceed 180 days.” In addition, courts must prioritize cases that review an agency’s permitting decision for an energy or mineral project, moving the case up the docket.
In its analysis of the bill, the Bipartisan Policy Center explained the reason for the change:
Under current law, aggrieved parties can file lawsuits for up to six years after an agency makes final permitting decisions on energy projects. This creates a legal limbo that drives up costs, even if developers ultimately prevail in the legal challenges, as is usually the case. Both fossil and renewable projects face these legal challenges; in fact, a recent study found that solar projects face the highest litigation rate.
The second section requires the federal government to offer to lease “at least 50% of the acreage actually nominated for oil and gas leasing, or at least two million acres…in the year prior to the date on which the Secretary [of Interior] issues any right-of-way for wind or solar development on federal land.” Reviews of coal leasing applications have to begin within 90 days of submission.
In other words, the bill enshrines a strategy of using a broad array of American energy resources. The bill accelerates renewable energy permitting and, at the same time, extends leases for drilling on federal land from three years to four. The bill requires at least one offshore oil and gas lease sale of at least 60 million acres per year through 2029 and, similarly, at least one offshore wind sale of at least 400,000 acres during the period.
Another key provision directs the Secretaries of Interior and Agriculture to make it easier to facilitate electric grid projects, including “the installation of grid-enhancing technologies,” as well as allowing “the development of batteries or other storage technologies on previously disturbed or developed land” – an encouragement to collocating with an existing power plant.
According to a World Resources Institute [WRI] statement, “The bipartisan bill contains important provisions to accelerate upgrades and expansion of the U.S. electricity grid to increase grid reliability.” The legislation follows the release of FERC’s transmission planning and cost allocation rule for the grid and Department of Energy’s recent announcement of initial selection of potential National Interest Electric Transmission Corridors (NIETC), where capacity constraints exist or are expected.
One of the bill’s key provisions, said the WRI “is to expand FERC’s backstop siting authority from projects located inside NIETCs to any project deemed ‘in the national interest.’ This would allow transmission developers to appeal to FERC for siting approval in instances where states are unwilling or unable to grant construction permits in a timely manner, expediting the buildout of transmission.”
All in, said Lori Bird, director of WRI’s U.S. Energy Program….
The transmission provisions…establish a critical framework to enable the United States to expand and upgrade the grid which will help meet the nation’s electricity needs and provide more affordable power to all Americans. A number of studies have shown that without improvements to transmission and grid systems, the United States will not be able to meet its climate goals.
The bill also clears up confusion and duplication by providing “that FERC [the Federal Energy Regulatory Commission] is the lead agency for environmental reviews” conducted for transmission permitting, and Section 401 “clarifies that FERC’s relevant authorities apply to offshore electric transmission.” The legislation also encourages testing, monitoring, and exploration of geothermal resources on federal land.
In addition, the bill tackles the controversial issue of the moratorium on the export of liquefied natural gas (LNG), which the Biden Administration announced in January. The bill says that the Secretary of Energy must “approve or deny all pending and future applications” to export LNG within 90 days of the date that FERC or the Maritime Administration publishes its final environmental review.” If the review goes beyond 90 days, “the application is deemed approved.”
FERC does not endorse legislation, but its chair, Willie Phillips, expressed what Politico called “cautious optimism” about the bill. He told reporters after the agency’s open meeting last month that he is hopeful the transmission policies within the new permitting package will be “a step in the right direction.”
The bill is a compromise, fashioned to be attractive to advocates of renewable sources of energy as well as the fossil fuels that will be necessary to help power the grid over an era of transition. The law firm Holland & Knight, in its commentary on the legislation, called it “a careful balancing act.”
“After more than a year of bipartisan negotiations with chairman Manchin, we are now one step closer to getting the bipartisan Energy Permitting Reform Act signed into law,” said Sen. Barrasso, who added:
Our bill is a true all-of-the-above energy policy – targeted, timely, and good for all Americans. I will continue to fight to get this bill signed into law and to unleash more affordable, available, and reliable American energy.
Congress, however, is on break for August, an election is coming up, and only a few months remain in the legislative session. Meanwhile, Rep. Bruce Westerman (R-AR), chairman of the House Committee on Natural Resources, and Rep. Scott Peters (D-CA) “have signaled they would like to put together their own permitting legislation but have indicated action is more likely to happen next Congress,” reported Holland & Knight.
Time is running out for Senate Majority Leader Chuck Schumer (D-NY) to bring the bill to the floor. Schumer was quoted saying, “I am happy to listen, but I’ve told Joe Manchin it’s going to be virtually impossible to get something done.”
Still, don’t count Manchin out. He is nothing if not persistent, and this bill is his legacy. There is almost certainly a majority in the Senate – as well as the House – that understands the need for this bill to secure the energy grid and promote energy projects nationwide.
Maryland’s Utility Bills Will Skyrocket as Capacity Costs at Auction Rise 800%
In a new report, the Office of People’s Counsel, the State of Maryland’s ratepayer advocate, warned residents that their electricity bills would skyrocket, rising “by 2% to 24%, depending on location,” starting in the middle of next year.
Why?
The nation’s largest grid operator, PJM Interconnection, which covers all or part of 13 states and the District of Columbia, is responsible for assuring “adequate capacity to meet peak loads and reliability standards.”
To accomplish that critical goal, PJM holds base rate auctions (BRAs). The latest BRA, held on July 30 and covering the period from June 1, 2025 to May 31, 2026, resulted in “a more than 800 percent increase in system-wide prices relative to the prior BRA for the 2024/2025 delivery year, a price spike unprecedented in PJM,” the report said.
The cost across all of PJM for this capacity will be $14.7 billion, compared with $2.2 billion last year.
The report pointed to increases in load from the rise in demand for electricity and extreme weather that we discuss elsewhere in this newsletter – and to “a reduction in capacity market supply due to plant retirements and retirement-related ‘reliability must run’ (RMR) arrangements.” In other words, demand is up and supply down.
“The largest wholesale electricity market in the U.S. is signaling that there’s a shortage of power plants on its grid,” said the Wall Street Journal’s Heard on the Street column on July 31. “PJM said auction prices were significantly higher due to a large number of older power plant retirements (about 6.6 gigawatts).”
As a result, ratepayers in the area covered by Baltimore Gas and Electric could see their bills increase by about $250 a year for residential customers and nearly $2,700 for commercial customers, reported Utility Dive on Aug. 15. “Ratepayers in the Allegheny Power System zone in Western Maryland, which includes part of Potomac Edison’s service territory, will see a 24% bill increase.”
As a net electricity importer, Maryland needs new transmission lines and generating plants, according to PJM.
The system operator has approved roughly 38 gigawatts of power that has not yet been built. Most of that capacity comes from renewable sources: solar, wind and battery storage.
If these types of projects are not real or viable when they are approved, how are ratepayers in Maryland supposed to have reliable energy?
For the near future, reliability risks and price increases are becoming the order of the day as plants that use fossil fuels are being shut down.
The headline of a piece on April 23 by Paul McGlynn, PJM’s vice president of planning, blared, “Interconnection Reform Is Working, but Will New Generation Actually Get Built?” He wrote:
Simply put, how do we maintain a reliable and affordable power system through this transition? One acute challenge is interconnecting enough new reliable generation resources to replace the fossil-fuel generators that are retiring en masse due to economics or state and federal policy requirements.
McGlynn noted, “According to Lawrence Berkeley National Laboratories, more than 300,000 MW of projects have been approved nationally but have not proceeded to construction – nearly 25% of current generating capacity in the country.”
Supply chain, financing and permitting issues like the ones we discussed earlier are holding these projects back currently. There is hope that the PJM region will have new capacity down the line, but McGlynn warned it will “require concerted government and industry effort to make sure those generation projects actually start generating electricity.”
The higher electricity rates that consumers and businesses will be paying are not just a financial burden and an economic drag; they are also a wake-up call. The nation is moving toward a grid that generates lower emissions, but between now and then, it will need to keep that electricity, air conditioning, and heat flowing with a combination of existing plants and new ones that are brought online as quickly as possible.
Energy Dept. Spends $2.2 Billion to Enhance the Grid in the Face of Rising Demand and Extreme Weather
On Aug. 6, the Department of Energy (DOE) announced $2.2 billion in new spending on “the nation’s grid for eight projects across 18 states.”
The funding is part of $10.5 billion allocated by the IIJA, also called the Bipartisan Infrastructure Law, for the Grid Resilience and Partnerships (GRIP) program. It follows a first round of funding of $3.46 billion in October of last year.
This second tranche intends to add nearly 13 gigawatts (GW) of grid capacity across California, the Northern Plains, the Carolinas and New England.
As Politico reported, the new round of funding includes:
- $700 million for the North Plains Connector project, “a high-voltage direct-current power line that creates the first large-scale grid connection between the Eastern and Western interconnections, the U.S. grid systems divided by the Rocky Mountains,” reported Politico. The Connector will create up to 3 GW of capacity, increasing interregional power-sharing by a factor of 14.
- $600 million for the California Energy Commission to replace old power lines with stronger transmission cables (see below for more on California).
- $250 million for the Utah Office of Energy Development “to install 250 miles of advanced conductor cables, increasing line capacity to permit delivery of 500 megawatts (MW) of renewable energy across six states.”
- $30 million to the New York Power Authority for its Clean Path New York project, which is supposed to deliver 1.3 GW of renewable energy from upstate and western New York to New York City.
- $85 million as the federal contribution to the Virginia Department of Energy for the creation of a new battery storage system at the Iron Mountain data center in Manassas. The state’s share of the project is $106 million.
Demand from data centers, including those focused on Artificial Intelligence (AI), have increased fears of shortfalls in electricity (see below). AI data centers are expected to increase their power consumption160% by 2030, according to Goldman Sachs Research, which pointed out in May:
On average, a ChatGPT query needs nearly 10 times as much electricity to process as a Google search. In that difference lies a coming sea change in how the US, Europe, and the world at large will consume power — and how much that will cost.
As a result, increasing battery capacity and expanding natural gas resources have become more in favor. Natural gas is playing an outsized role in supporting demand from AI centers, a major reason that U.S. natural gas futures prices have risen 62% between April and August, EuroNews reported.
The DOE’s GRIP program will enable the grid to handle a greater capacity of energy resources at a time of rising demand, not just from AI data centers but from electric vehicles, the modernization of manufacturing facilities, and the growing U.S. economy.
Like the Manchin-Barrasso permitting legislation, the GRIP program recognizes that natural gas is an affordable, reliable option, critical to the low-carbon transition. We expect DOE will continue to promote an all-of-the above strategy in future GRIP program funding opportunities.
Court Decision Further Delays LNG Projects in Texas
Because of new technology, U.S. natural gas exploration and recovery has boomed in recent years – the main reason that total domestic energy production in 2023 exceeded consumption more than in any year since at least 1950.
More and more U.S. natural gas is converted to a liquid for transport around the world on ships and then back to a gas at port. In 2023, the U.S. became the largest liquefied natural gas (LNG) exporter in the world, rising from zero in 2016 to 14 billion cubic feet a day.
As demand for LNG rises, U.S. investment is growing. According to Ben Cahill of CSIS:
More than 70 million tons per year (mmtpa) in baseload export capacity is under construction at Golden Pass, Corpus Christi Stage 3, Plaquemines, Port Arthur, and Rio Grande. Three of these projects reached final investment decision (FID) last year, attracting $40 billion in debt and equity financing. By 2028, the United States is slated to reach more than 160 mmtpa of export capacity—more than double the current output of Qatar, the world’s second largest exporter.
Exports from the U.S. to Europe have more than doubled in the past two years and have been critical since the Russian invasion of Ukraine.
But LNG has lately suffered setbacks, including the Biden Administration’s continuing moratorium, begun in January, on new export permits to countries with which the U.S. does not share a free-trade agreement (see above). And now, in an Aug. 6 opinion, a federal appeals court in Washington, DC, ruled that FERC had failed adequately to assess the environmental impacts of two LNG plants in Texas, so the court sent the matter back to the commission for a re-hearing, causing further delays.
Said the court:
Although we do not take this step lightly, the circumstances here require it. We appreciate the significant disruption vacatur [setting aside a judgment] may cause the projects. But that does not outweigh the seriousness of the Commission’s procedural defects.
The court explained that FERC had failed “in its analyses of environmental justice and climate impacts, air pollution modeling and procedural obligations,” said an Aug. 9 report by Inside Climate News. This is the second time the court has rejected FERC’s authorization of the two projects. In August 2021, it ruled FERC “failed to assess impacts of the projects’ greenhouse gas emissions and had picked an arbitrary two-mile radius within which to conduct its environmental justice analysis,” said Inside Climate News. “The court also said the projects modeled their air pollution using data from a faraway air monitor in Brownsville instead of the closer Isla Blanca monitor.”
Since that ruling, FERC decided to create a “social cost of carbon analysis.” That decision prompted one project to add a carbon-capture system, but the court ruled that there was not enough of a review of the system or comment period.
The two complexes under question are part of a boom in gas export projects along the Gulf Coast of Texas and Louisiana. One of them, Rio Grande LNG, is a project of NextDecade, a publicly owned company whose stock dropped 41% immediately after the court sent the matter back to FERC. The company said in a press release that it was “disappointed in the Court’s decision and disagrees with its conclusions.”
NextDecade added, “At this time, construction continues on the first three liquefaction trains and related infrastructure (Phase 1) at the Rio Grande LNG Facility, and the Company is evaluating the impact of the Court’s decision on the timing of a positive final investment decision.”
The company announced last July that it had secured investor funding to begin construction on its 750-acre, $18 billion facility.
The second project affected by the court ruling is Texas LNG Brownsville, a smaller, adjacent facility on the Brownsville Ship Channel. A spokesman for Texas LNG, which has yet to secure full funding, told the Brownsville Herald: “We have full confidence FERC will address this matter judiciously and efficiently and look forward to working with them on this important issue.” The spokesman for Texas LNG, owned by New York-based Glenfarne Energy Transition, added:
Texas LNG is an industry-leading export facility designed to be the greenest on the planet once operational. Our project has undergone environmental impact studies previously and received tremendous support from government officials and financial and export partners. Our team is committed to resolving this issue quickly and completely.
FERC originally authorized the Texas LNG project in 2019, and since then it has been involved in a protracted legal battle over the order. It took a year and a half for the earlier FERC decision to be appealed to the DC Circuit Court and then remanded back to FERC. Now the process continues. According to Oil & Gas Journal:
This most recent decision will likely delay Texas LNG’s final investment decision, which it planned to make later this year, ClearView Energy Partners said in a note Aug. 6, explaining that the project’s certificates could be invalid in 6 weeks if parties do not ask the panel or the full court to reconsider, and construction cannot occur without them. The length of any delays depends on how long it takes FERC to develop a supplemental EIS—a process that typically takes at least 6 months—and how any further appeals play out, the research firm said.
These sorts of prolonged fights in the courts – a uniquely American phenomenon – have become common, and they are part of the impetus behind efforts to streamline permitting (see above). “Advocates for permitting reform,” said a Utility Dive piece by reporter Diana DiGanji, “argue that the current demands placed on project developers can not only be burdensome but unhelpful to the communities they’re supposed to protect.”
In May, even before the recent court ruling, Texas LNG Brownsville asked FERC for an additional five years to place its export terminal into service. “These legal challenges and the various uncertainties the challenges caused delayed the project from multiple perspectives including commercial and marketing, regulatory and construction and constitute extenuating circumstances outside of Texas LNG’s control,” said a Texas LNG official in the request.
The court decision, coupled with the continuing export moratorium, threatens to deal a serious blow to U.S. natural gas production and bring new uncertainties to bear on the energy grid itself, imperiling reliability and energy independence.
California Conundrum: Reasonable Utility Rates Conflict with an Aggressive Zero-Carbon Goal
Lawmakers in California are caught between trying to lower sky-high electricity costs while maintaining a commitment under current law to a zero-carbon goal by 2045. The law requires the state to hit 90% of the goal by 2036.
The tension reached a boiling point on Aug. 6 at a hearing titled “Powering Through: An Update on Electricity Reliability as California Transitions to a Zero-Carbon Future,” held by the State Senate’s Energy, Utilities and Communications Committee. The panel’s chairman, Sen. Steven Bradford, who represents part of Los Angeles, cast blame on his fellow lawmakers for California’s struggles to keep energy affordable and reliable.
Utility bills have risen an average of 110% in the last decade for customers of Pacific Gas & Electric, according to the public advocate’s arm of the state Public Utilities Commission. PG&E is the largest of California’s three investor-owned utility companies. In the past three years alone, bills for customers of PG&E and Southern California Edison were up an average of 51%.
Said Bradford, a Democrat, “We find ourselves here today with these challenges because our legislation has been more aspirational than practical. Consumers are feeling this, and we need to be more practical in what we’re trying to do.”
The comments “come as concerns about power bills have grabbed the attention of state leaders,” reported the San Luis Obispo Tribune. Gov. Gavin Newsom wanted to push through a plan to lower prices before the legislative session ends on Aug. 31.
The Newsom plan proposed piecemeal short-term steps to reduce costs – such measures as deferring upgrades to school HVAC systems, lowering utility wildfire mitigation costs, cutting needed grid infrastructure investments, and introducing “securitization, a financial process that allows utilities to acquire low-cost debt rather than use expensive shareholder money to finance upgrades,” reported the Bee.
But on Aug. 23, Newsom pulled “much of his electric bill affordability plan” from consideration by the legislature, reported the Tribune.
Meanwhile, another legislative package is in the works, “aimed at making it easier to permit and pay for manufacturing and clean energy projects in California. Although it has yet to be officially released, it is backed by labor groups.”
During the Aug. 6 hearing, Sen. Kelly Seyarto, a Republican, said state lawmakers are trying to push an energy transition at 120 mph. The problem California is facing is “a curvy road with a bunch of potholes in it,” reported the Tribune. “Those obstacles include uncertain weather events, a smaller budget than expected and people leaving the state due to rising prices. ‘The faster we go through those curves,’ Seyarto said, ‘the more chances we are going to get that we will run off the road.’”
In fact, two years ago, the state nearly did run off the road, barely avoiding rolling blackouts in a record heat wave. The New York Times reported on Sept. 25, 2022:
California finds itself on edge more than ever with a lingering fear: the threat of rolling blackouts for years to come…. California relies heavily on energy from other states — the cavalry rushing over a distant hill. Sometimes the support does not show up when expected, or at all. That was the case this month, when millions of residents got cellphone alerts urging them to cut their energy use as the state teetered close to blackouts in blazing heat.
This June’s extreme heat, especially in California’s inland valleys, provided another example of the dangers of an unstable grid.
The goals of a fast transition to zero emissions and reasonable utility rates with a reliable flow of electricity are at best a delicate balance and, more likely, an impossibility. California’s leaders want quick action to curtail the effect of climate change, but consumers are bearing the brunt of that ambition.
AI Demand Is Leading to Plans to Build Gas Pipelines Straight to Data Centers; North Dakota Sees a Boom
This newsletter has provided frequent coverage of preparations for a significant surge in electricity demand, in large part because of the need for data centers focused on AI computing:
- In Issue No. 34, we reported, “The demand for electricity takes a turn upward. The reasons: manufacturing and Artificial Intelligence. Reliability will be tested.”
- In Issue No. 35, we reported, “Concern rises over the voracious demand for energy from Artificial Intelligence data centers.”
- In Issue No. 37, we headlined: “House Hearing Looks at the Impact on the Electric Grid of the Artificial Intelligence Boom.”
- In Issue No. 38, we cited a Bloomberg opinion piece by Liam Denning, formerly the author of the Wall Street Journal’s Heard on the Street column and the Financial Times’s Lex column. He wrote, “Forecasts for data centers’ electricity consumption have spiraled, with some now projecting 1,000 terawatt-hours by 2030, equivalent to a quarter of the grid’s entire load today.”
Denning also pointed to uncertainties, but there is no doubt that big tech and data center operators worry about surging electricity demand from the growth in AI – and, along with energy companies, they are doing something about it.
According to an Aug. 8 Bloomberg piece, pipeline giants Energy Transfer LP and The Williams Cos. are in talks with data center operators about building pipelines directly to facilities “to fuel on-site power plants as the centers prepare for a boom in artificial intelligence.”
“’We, frankly, are kind of overwhelmed with the number of requests that we’re dealing with, and we are trying to make sense of those projects,’ said Energy Transfer CEO Alan Armstrong said on a call with analysts.”
Williams is in talks to direct gas to data centers, particularly in the U.S. Southeast and the Mid-Atlantic, according to Bloomberg. Those regions lack the kind of infrastructure that exists in other parts of the country, such as the Midwest. To run gas straight to data centers, more pipelines will be necessary.
Meanwhile, as E&E News recently reported, North Dakota sees the AI surge “as a potential boon for oil and natural gas production, already the largest source of tax revenue in the state.” The piece, by Jeffrey Tomich, continued:
Josh Teigen, commissioner of the North Dakota Department of Commerce under Republican Gov. Doug Burgum, said state officials are in discussion with developers about using the Bakken shale formation’s vast natural gas reserves to fuel power plants to serve new data centers. Those dedicated plants could potentially sell excess power into the grid, he said.
Teigen said that “it used to be that tens of megawatts, maybe 100 MW, was a huge project.” But now, with AI, “they’ve approached us and said, ‘We want, you know, to start with, 500 to 1,000 MW and scale to 5,000 to 10,000 MW.”
In recent weeks, said Teigen, “developers of two large data center projects have met with the governor, the pipeline authority, landowners and owners of gas processing facilities. He said each project would be $125 billion investments.”
In late March, Microsoft and OpenAI (in which Microsoft owns a 49% stake) were reported by Reuters and other outlets reported to be considering construction of a $100 billion campus to run supercomputers. The tech publication The Information reported the project, to be called “Stargate,” could launch as soon as 2028 and require as much as 5,000 MW of electricity at its full buildout.
According to the E&E piece, Teigen “didn’t name Microsoft or OpenAI, but indicated the suitors were among the largest technology companies in the world. Cloud computing giants Google, Amazon and Meta are also building out data center capacity. On top of that, the dominant high-end AI chipmaker, Nvidia, is pressing those companies to identify where the power will come from to run computer servers needed for generative AI applications.”
A $125 billion data center would be a “huge, huge revenue stream for the state and counties and local communities in a variety of ways,” said Teigen. It could even eliminate the need for residents of the state to pay property taxes.
But the E&E piece also raises a major complication: “Making sure there’s enough grid capacity.”
North Dakota’s Public Service Commissioner Julie Fedorchak “questioned the ability of the region’s power grid to handle large-scale data centers and increasing demand given the continued retirement of fossil fuel power plants and declining supply.” Fedorchak is also the Republican nominee – and favorite – in the Nov. 5 election for North Dakota’s only U.S. House seat.
According to Midcontinent Independent System Operator (MISO) projections, 37 gigawatts of coal- and gas-fired generating capacity are expected to be shut down by 2027. And there’s a slowdown in new generation coming online, in part because of the permitting problems to which we referred earlier.
“The two lines are going the opposite direction,” said Fedorchak.