How data centers are complicating transmission expansion

Electric transmission development is notoriously difficult, and these days, NIMBYism gets the brunt of the blame. But as data center loads surge and electricity prices climb, there’s a new roadblock –  the messy world of multi-state cost allocation.

The Mid-Atlantic Resiliency Link (MARL) — a planned 100-mile, $960 million transmission line stretching across Pennsylvania, West Virginia, Maryland, and Virginia — was approved by PJM in 2022 under standard rules that spread costs across the entire region. But that plan was made before ChatGPT took off and data center forecasts shot upwards. 

Fast forward four years, and now state consumer advocates are asking why local ratepayers should foot the bill for an infrastructure project designed to feed data centers in northern Virginia.

In this episode, Shayle sits down with Maeve Allsup, senior reporter at Latitude Media, to unpack her reporting on the project. They dive into how the rise of generative AI has disrupted traditional grid planning and explore why this challenge has proven to be such an impactful rate limiter for the AI boom.

[Correction: In this episode, Shayle and Maeve refer to MARL as the Mid-Atlantic Reliability Line. The correct name is the Mid-Atlantic Resiliency Link. We regret the error.]

Shayle and Maeve discuss topics like:

- How a project approved in 2022 hit a vastly different policy and regulatory landscape by the time it reached state dockets

- Why data center growth breaks the historic assumption that regional transmission costs eventually "even out" between states

- How the Ratepayer Protection Pledge — a voluntary commitment signed by tech hyperscalers at the White House — is being harnessed by state advocates as a cudgel to demand data centers pay for grid upgrades

- Why the United States has gone from building thousands of miles of transmission a decade ago to just hundreds today

- How the intersection of local opposition and confusion over utility tariffs is delaying grid buildouts

Resources

- Latitude Media: How the Ratepayer Protection Pledge became a transmission hurdle in PJM

- Latitude Media: FERC to grid operators: Connect large loads to transmission faster

- Catalyst: Looking for a turnaround in transmission

- Catalyst: The rise of flexible data centers

- Catalyst: AI scaling pathways: On grid, on edge, off grid, off planet

- Open Circuit: Grid utilization vs expansion: The 100 GW debate

- Open Circuit: A five-alarm fire for the grid?

Credits: Hosted by Shayle Kann. Produced and edited by Max Savage Levenson. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.

Tune into Critical Capital, a brand new podcast from Crux and Latitude Studios. Hosted by Crux CEO Alfred Johnson, Critical Capital explores the interlocking forces powering clean and critical infrastructure. Join us every other Tuesday for in-depth conversations at the intersection of energy, government, finance, and global markets. Listen here, or wherever you get podcasts.

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