The U.S. electricity landscape is shifting rapidly, with regulatory shake-ups, market dynamics, and emerging technologies redefining power generation and distribution. This week’s GridBrief dives into FERC's controversial fast-track plan, flexible load management’s untapped potential, and the political power play behind taxing cryptocurrency mining.

White House Asserts Authority Over Independent Agencies

On February 18, 2025, President Donald Trump issued an executive order extending the White House's oversight to independent agencies, including the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission (SEC). This directive mandates that these agencies submit proposed and final significant regulatory actions for review by the Office of Management and Budget’s Office of Information and Regulatory Affairs. The order emphasizes the need for agency policies to align with presidential priorities, aiming to enhance accountability and ensure a unified execution of federal law.

FERC Chairman Mark Christie, along with other agency heads, is now required to coordinate policies with the directors of the OMB, the White House Domestic Policy Council, and the National Economic Council. The executive order also grants the OMB director authority to set performance standards for agency heads and adjust their budgets to advance the president’s agenda.

Legal experts highlight potential challenges to this order, citing statutory provisions that protect the independence of agencies like FERC. The Department of Energy Organization Act, for instance, prohibits DOE officials from directing FERC's actions, suggesting that an executive order cannot override such statutes. The implications of this directive remain uncertain and are likely to prompt legal scrutiny.Duke Study: U.S. Grid Could Absorb More Load With Flexible Management

Pennsylvania Sues Over Frozen IRA Funds

Governor Josh Shapiro of Pennsylvania has filed a lawsuit against the Trump administration, alleging unlawful restrictions on the state's access to over $3.1 billion in federal funds designated for programs under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). The lawsuit contends that federal agencies have arbitrarily suspended or restricted access to these funds, which are vital for initiatives such as the Solar for All program, greenhouse gas emissions mitigation, and infrastructure improvements.

The administration's pause on disbursing these funds stems from an executive order aimed at auditing and potentially revising programs associated with the "Green New Deal." However, Pennsylvania argues that this unilateral suspension violates the U.S. Constitution, as the funds were appropriated and obligated by Congress. The legal outcome of this challenge could have significant ramifications for state-level energy and infrastructure projects nationwide.

MIT Analysis: Diverse Factors Driving Electricity Demand

A recent report from the International Energy Agency (IEA), highlighted by MIT Technology Review, reveals a 4.3% increase in global electricity demand in 2024, with projections of continued growth at a similar rate through 2027. While the proliferation of data centers and AI technologies contributes to this surge, especially in advanced economies, the primary drivers are rooted in developing regions.

China, India, and Southeast Asia account for approximately 85% of the anticipated demand growth. In China alone, the production of solar modules, batteries, and electric vehicles consumed about 300 terawatt-hours of electricity in 2024, equivalent to Italy's annual consumption. Factors such as economic expansion, increased adoption of air conditioning, and industrial activities are significant contributors to this rising demand.

The report underscores the importance of balancing this demand with sustainable energy practices. While renewable energy sources are expanding, the continued reliance on fossil fuels in many regions poses challenges to emission reduction efforts. Addressing these challenges requires coordinated global strategies to enhance energy efficiency and accelerate the transition to low-carbon energy sources.

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Conversation Starters

• FT - Nuclear reactor groups raise $1.5bn amid race to power AI
  Developers of small modular nuclear reactors have secured over $1.5 billion in funding in the past year, capitalizing on growing investor interest driven by AI's massive energy demands.
  

• RealClearDefense - Electricity is Essential to National Security
  With escalating geopolitical tensions, reliable and resilient electricity generation is now a cornerstone of national security, particularly for strategic industries like semiconductor manufacturing and quantum computing.
  

• Science News - Squishy materials reveal new physics of static electricity
  New research shows that an object’s charge depends on its contact history, shedding light on the elusive physics behind static electricity—a phenomenon that continues to puzzle scientists.

Good Bet, Bad Bet

Good Bet: Clean Edge Smart Grid
Investors might consider the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID), an exchange-traded fund focusing on companies that develop and deploy smart grid technologies. This fund offers exposure to a diversified portfolio of firms at the forefront of modernizing electrical infrastructure, a sector gaining importance as the global energy landscape evolves.

Bad Bet: Perpetual Motion, Always
History cautions against investments in companies that promise groundbreaking energy solutions without credible scientific validation. A case in point is Steorn, an Irish company that, in 2006, claimed to have developed a technology providing "free, clean, and constant energy" through an alleged perpetual motion machine—a concept that defies the fundamental laws of physics. Despite significant media attention and investor interest, Steorn failed to demonstrate its technology's viability. After a series of unsuccessful demonstrations and mounting skepticism, the company was liquidated in May 2024.

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