The U.S. electricity sector is at a crossroads, with regulatory decisions, infrastructure investments, and market shifts shaping the future of power generation and distribution. The Federal Energy Regulatory Commission (FERC) just approved a controversial fast-track plan for new power plants in PJM’s territory, while a Duke study highlights the untapped potential of flexible load management to handle surging electricity demand. Meanwhile, states are flirting with the idea of taxing cryptocurrency mining operations as a revenue stream—raising critical questions about energy policy and grid strain.

FERC Greenlights Fast-Track Power Plant Approvals in PJM

The Federal Energy Regulatory Commission (FERC) has approved PJM Interconnection’s plan to expedite grid access for up to 50 power generation projects. The goal is to address looming capacity shortfalls in the PJM region, which covers 13 states and Washington, D.C. The initiative could bring 10 GW of generation online 18 months ahead of schedule by bypassing PJM’s traditional interconnection process. However, not all commissioners are convinced the fast-tracking will work in time to prevent shortages by 2026.

While traditional utilities and grid reliability advocates support the measure, renewable energy developers and environmental groups warn that it prioritizes large, complex projects that might not materialize on schedule. The move also includes reforms to PJM’s Surplus Interconnection Service, potentially unlocking 26 GW of additional grid capacity by enabling battery storage and other technologies to capitalize on existing interconnection points. With growing electricity demand—driven by data centers, industrial expansion, and electrification—policymakers are scrambling for solutions.

Duke Study: U.S. Grid Could Absorb More Load With Flexible Management

A new study from Duke University’s Nicholas Institute finds that the U.S. grid could integrate up to 126 GW of additional load if end-users accept small curtailments during peak demand. This research directly challenges claims that rising electricity consumption—especially from data centers and AI computing—will inevitably require an immediate, massive buildout of generation. The study analyzed 22 of the largest balancing authorities covering 95% of peak U.S. demand, finding that temporary load reductions as short as 1.7 hours per year could allow significant capacity increases without major infrastructure spending.

Key balancing authorities such as PJM, MISO, ERCOT, and SPP could each integrate at least 10 GW of new flexible load under modest curtailment scenarios. The findings suggest that regulators and utilities should rethink load growth strategies, leveraging demand-side flexibility rather than rushing to construct new power plants. As debates over transmission expansion and grid reliability intensify, this study adds weight to calls for optimizing existing resources before defaulting to costly new builds.

States Eye Crypto Mining Taxes as a Revenue Play

As cryptocurrency mining operations proliferate, some state governments are considering taxation as a way to reclaim lost electricity capacity and generate revenue. Nebraska lawmakers are currently debating an excise tax on electricity used for crypto mining, citing concerns over energy consumption and grid strain. In some areas, like Kearney, Nebraska, crypto mining accounts for nearly 50% of total electricity demand—raising fears that it could displace other industries or drive up costs for consumers.

While proponents argue that a tax would level the playing field and prevent excessive grid monopolization, opponents warn that it could push miners to friendlier jurisdictions, reducing tax revenue while doing little to address energy demand. Historically, state-level interventions in energy-intensive industries have yielded mixed results. As more states consider following Nebraska’s lead, expect a growing debate over whether crypto mining is a liability, an economic opportunity, or simply an easy political target.

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Conversation Starters

• Barron’s – GE Vernova Stock Gets Buy Rating. Why Electricity Is ‘Cool’ Again.
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• Bloomberg – Why Norway’s Political Crisis Is a European Energy Problem.
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• WSJ – California’s Plan: Make the Poor Sweat in the Dark.
  As the state mandates electrification, its pricing strategies and soaring costs of wind and solar threaten energy affordability—especially for lower-income residents.

Good Bet, Bad Bet

Good Bet: Invest in Smart Wires
As the demand for electricity surges, driven by the proliferation of AI technologies and data centers, enhancing grid efficiency has become paramount. Smart Wires, a company specializing in power-flow control systems, offers innovative solutions to optimize existing grid infrastructure. Their technology redistributes power from congested transmission lines to underutilized ones, effectively increasing grid capacity without the need for extensive new infrastructure. This approach not only addresses immediate capacity challenges but also provides a cost-effective and scalable solution for utilities. Recent investments, including a $65 million infusion led by BP Energy Partners, underscore the confidence in Smart Wires' potential to play a pivotal role in modernizing the power grid. Investing in companies like Smart Wires aligns with the growing need for grid optimization solutions in the evolving energy landscape.

Bad Bet: LightSail Energy
LightSail Energy, founded in 2008, aimed to revolutionize energy storage with its compressed air technology. Despite attracting significant investments from prominent backers, including Bill Gates and Khosla Ventures, the company struggled to bring a viable product to market. Challenges in scaling the technology, coupled with competition from more efficient energy storage solutions like lithium-ion batteries, hindered its progress. By 2016, LightSail had begun repurposing its assets, and in 2018, the company ceased operations entirely. This case highlights the risks associated with investing in unproven energy technologies, especially when more practical and scalable alternatives are available.

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