Power Struggles in the Power Industry

Policy choices and price relationships frequently guide the transition from one energy source to another. Policy choices, such as feed-in tariffs and the subsidization of technological change, alter price relationships. In the recent past, state resource portfolio standards, along with the decline in the cost of renewable technologies, created a preference for wind and solar generation to meet new generation requirements. However, the sudden and dramatic growth in data center demand for electricity may reverse this trend because stakeholders are calling for an increased reliance on natural gas, nuclear power, and coal plants. This article focuses on how the power to control the size of the market and to control who gets access to the market provides the power to withhold service, leading to the ability to control what is built and who pays for it. Because the power to withhold supply is often embedded within the administrative rules of a regional transmission organization, changes in PJM’s rules will influence what type of plant will be built. Simultaneously, there is a struggle to determine who will pay for the resources needed to meet the increased data center demand for electricity. That struggle occurs in front of state regulatory commissions.