OPINION:
America is hurtling toward an electricity crisis, and the warning signs are clear.
The North American Electric Reliability Corporation (NERC) recently issued its highest-level alert about the “immediate risks” posed by surging electricity demand from data centers. In a single year, NERC’s 10-year peak demand forecast jumped 69%.
The Department of Energy warns that retiring reliable baseload power plants and replacing them with weather-dependent solar and wind is increasing the risk of blackouts a hundredfold by 2030. Spain showed us what that future looks like: one of the largest peacetime blackouts in European history, with losses estimated at $1.8 billion, arriving just after the country celebrated running entirely on renewables for a single weekday.
We’ve been warned. States can no longer afford to wait.
The problem is a collision of two powerful forces. On the demand side, artificial intelligence and the digital economy are driving explosive growth in electricity use. Data centers are the new industrial giants and their appetite for power is enormous.
On the supply side, reliable baseload generation, plants that run around the clock regardless of weather, are being shut down and replaced with solar and batteries that fail precisely when the grid is stressed.
Blackouts don’t happen on pleasant spring afternoons. They happen during heat waves, ice storms and moments of peak human need.
State legislators must respond on two fronts.
First, states should pass baseload-for-baseload laws requiring that any retiring firm generation be replaced with equal or greater firm, dispatchable capacity. These protect consumers from overreliance on intermittent wind and solar while keeping electricity available and affordable.
Reliability and affordability are inseparable, and states must treat them that way.
Second (and this is where states should act right now), legislatures should make it easy for data centers and other large power users to build their own “behind the meter” generation. These facilities need electricity and they will get it one way or another. The question is whether they take it from a grid already stretched thin or will supply their own.
The policy framework should be simple. Large power users that generate their own electricity should have a clear, streamlined permitting pathway built for speed while protecting nearby communities. They should be allowed to sell excess generation back to the grid, adding supply rather than draining it. More supply helps reliability and drives down prices for everyone.
If they connect to the grid for backup, they pay the full cost of that hookup themselves. No cost-shifting to ratepayers. They should be exempt from lengthy rate-case proceedings before utility commissions that can drag on for years.
Safety and siting rules must be followed; the public interest is non-negotiable. But red tape must not be the obstacle that delays capacity we need now.
Every step of permitting and approval should have strict, enforceable deadlines. We don’t have the luxury of open-ended timelines. The electricity is needed now, not after years of administrative delay.
New Hampshire, Ohio, West Virginia, Oklahoma and Utah are already moving in this direction. Major tech companies have pledged to power their own data centers off the public grid. The momentum is real. More states should codify it into law.
The grid is under pressure it was never designed to handle. Data centers and AI aren’t going away, nor should they. But they cannot cannibalize the electricity that families, hospitals, small businesses and manufacturers depend on every day.
And their massive electricity appetite must not drive up prices for everyone else by stressing the grid.
States have the tools. They have model legislation. What they need now is the will to act before the next storm, the next heat dome or the next cascading failure turns a foreseeable crisis into an unforgivable one.
The time to act is now.
• Frank Lasee is president of Truth in Energy and Climate.
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