Finding Common Ground at NARUC

Last month, I once again had the opportunity to attend the National Association of Regulatory Utility Commissioners (NARUC) Winter Summit. I will admit that I was somewhat nervous to be in Washington, D.C. given the current political climate (tense would be an understatement). My kids peppered me with questions as I left (and again failed to be impressed by a conference of regulators and suggested I just meet with the President). And yet, as an energy professional, I was hopeful the conference would help us all – regardless of who we voted for – find desperately needed common ground.

One of the key topics at NARUC this year was how to handle demand growth across the country. With an emotional support Starbucks firmly in hand, I tuned into discussions on everything from the electric vehicle trends to data center load growth. Studies show U.S. data center demand is set to double, hitting 35 gigawatts (GW) by 2030, from 17 GW in 2022. That’s a lot of energy, and a lot of pressure on utilities to keep the lights on while trying to accommodate this rapid growth.

One potential piece of the puzzle that I kept hearing was increasing demand flexibility (adjusting energy usage in response to changes in supply or pricing, helping to balance supply and demand on the grid). The good news is that time-of-use (TOU) pricing can encourage customers (yes, even data centers!) to use energy when it’s cheaper and more abundant. By offering different rates for electricity depending on the time of day, TOU pricing can help reduce strain during peak hours and encourage off-peak consumption. This provides effective flexibility regardless of whether the energy is from oil, natural gas, or renewables. GridX even hosted a lunch panel on TOU rates, highlighting the findings from a Brattle report that shows how time-varying rates can incentivize demand flexibility when it’s needed most.

I kept thinking about a Duke University study I read discussing the concept of “curtailment-enabled headroom,” which essentially refers to how much extra load the U.S. grid can handle without significant capacity expansion or impact on demand-supply balance. The study found that data centers could save as much as 15% by optimizing workloads to take advantage of off-peak rates and reduce strain during peak demand. TOU rates don’t require an infrastructure overhaul and can be put in place quickly and affordably. These types of rates can (and should!) be a prominent part of the demand flexibility discussion.
As for my kids? I doubt they’ll ever think NARUC is exciting (especially because I failed to visit the White House or catch views from the top of the Washington Monument). But there is value in coming together to solve big problems. By approaching the uptick in load with innovation and collaboration – and by allowing regulators and utilities to work side-by-side – we can make real progress.