Data Centers

Data centers are rapidly expanding across the United States, driving sharp increases in electricity demand, exacerbating rising household energy costs, and adding growing pressure on local water systems and land use. Forecasts for data center electricity consumption continue to climb, prompting the buildout of additional energy infrastructure while straining electric grids and consumer energy bills. Beyond energy demand, data centers can deplete local water resources, worsen air pollution, consume rural land, and incentivize further fossil fuel development, among other environmental and community impacts. In response, state legislators are increasingly considering guardrails for this rapidly growing industry to protect communities, consumers, and the environment.

Utility policy plays a pivotal role in the pursuit of climate goals and the transition from a fossil fuel-based economy to a clean energy economy. The utility sector is a primary source of greenhouse gas emissions, with the power sector contributing 25% to total U.S. emissions. Currently, about 60% of electricity generation is still derived from fossil fuels such as coal, natural gas, petroleum, and other gasses. By creating and implementing effective utility policies, legislators can help steer the energy industry away from fossil fuels and towards cleaner, more sustainable practices. The benefits from the transition to a clean energy economy cannot be achieved without investing in an efficient, optimized, and modern grid that can effectively utilize new technologies and resources, while also responding to customer needs and decreasing customer costs. The electrical grid plays a pivotal role in the clean energy future by enabling the reliable integration, distribution, and utilization of clean energy resources on a large scale.

In addition to introductory information on transmission in the U.S., this briefing book is broken down into four sections. First, we will examine how to better understand transmission and the opportunities presented by the “Three P’s of Transmission” (Planning, Permitting, and Paying). Second, we will examine how to maximize the capacity and ability of existing processes and infrastructure. Third, we will highlight ways to create new entities and authorities to better coordinate and streamline transmission development. Lastly, we will demonstrate how best to incorporate public interests into transmission policy to ensure that all communities benefit equally from this work.