State Commissioners
Floyd McKissick is a commissioner at the North Carolina Utilities Commission and chairs NARUC’s Committee on Consumers and the Public Interest. Paul Kjellander is PUF Senior Advisor and former Idaho PUC Chair.
Ten Commissioners discuss their concerns about electric power infrastructure.
PUF's Paul Kjellander: What are the most important needs for electric power infrastructure?
Commissioner Floyd McKissick: When I think about where we are today, it's all the new load growth that is projected as a result of data centers, advanced cloud computing, blockchain operations, and crypto mining. I realize that we will need to not just review resource adequacy but will need to contemporaneously invest in the infrastructure that's required to meet ever growing demand, while meeting decarbonization targets set by many states that will inevitably impact electric generation options.
In North Carolina, I think about the potential for increased reserve margins for utilities due to extreme weather, the impact of economic development decisions, as well as potential load growth from the electrification of the motor vehicle fleet. With all that demand coming onto the grid in the near and long term, it gives me concerns, as well.
The power grid is going to be challenged. There was a period where there was anemic growth and now the growth is substantial.
I was reviewing an article on the FERC report issued in December of 2023, which was projecting that nationwide demand would grow 4.7 percent over the next five years, whereas in 2022 demand was only projected at 2.6 percent. There's a lot to contemplate, a lot to deal with, as well as transmission capacity that will also need to be provided.
PUF: What are your greatest concerns about infrastructure?
Commissioner Floyd McKissick: We must have the grid ready and able to respond to that increased demand. We need to have transmission capacity in place.
Often today, there's a great emphasis on renewables, but where those renewables are located, there's not always the transmission capacity to get the power generated to where the power is needed. That's among the things that give me great concern. We've faced that in North Carolina, and I know that's occurring across the country.
A group called Americans for a Clean Energy Grid looked at the ten regions across the country and gave them an alphabet grade, theoretically between A to F, but there were only two regions that got a B based upon their regional transmission planning. Those were MISO and CAISO.
The rest of the country received grades of C, D, and F. Transmission capacity, and particularly the regional emphasis, needs to be in place.
PUF: Does regulation need to adjust to address infrastructure needs and concerns?
Commissioner Floyd McKissick: I think so, however the challenge is that each state must create the right pathway that's most effective and which works in their jurisdictions.
For example, in North Carolina we have legislatively mandated decarbonization goals we must comply with and we're closing out eighty-four megawatts of coal generating facilities. That's a target. We've got dates set to accomplish that.
But at the same time, we need to bring in renewables and we're considering technologies such as SMRs, as well as onshore and offshore wind. However, we don't know when certain new technologies will be available, and how we can make certain we have a reliable power supply and grid to accommodate increasingly growing needs and demands.
PUF: In the 2040s, how different will electric power infrastructure look?
Commissioner Floyd McKissick: The term infrastructure is broad, and it encompasses a lot. When I think about what will be different in 2040, I think about what new technologies are likely to have been brought to market by that time. I think SMRs will be a part of the electric generation fleet.
I think about the possibility that hydrogen is going to be available. Is it at a point yet in time where it will be commercially viable and feasible? I don't know. I think about all the charging stations that are going to be out there in 2040, when a large segment of the motor vehicle fleet will be using electricity as its fuel.
When I think that far out, it's going to be radically transformed. We'll be reaching many of those carbon-reduction targets, which are now just goals or targets. We won't perhaps be at net-zero yet across the country, but hopefully some states will be approaching that.
It'll be a new paradigm with all the increased demand coming. Who knows what's going to happen with cloud computing by then and with AI, with additional demand that's going to be on the grid.
Hopefully, we'll have overcome many of the transmission challenges that are looming. So, it'll be a transformation in progress that will present us with new challenges, and opportunities.
PUF: How do infrastructure needs compete with concerns about affordability?
Commissioner Floyd McKissick: There are serious concerns about affordability. This will not be a cheap transition, moving to carbon neutrality and building the infrastructure needs that are necessary. There are many challenges.
It's up to Commissioners within their jurisdictions to figure out how they can decrease the burden on those who are most financially vulnerable. Do they create programs that might provide a certain bill credit to those customers qualified for LIHEAP or CIP? Do they define affordability in terms of what a person pays for utilities as a percentage of their income?
These are variables each state will wrestle with and what works in one jurisdiction may not work in another. We will be challenged to think outside the box.
Do they look at what would be referred to as an energy burden based upon the amount of income that people have? It's all about helping segments of the population, so they're not struggling because of the cost and pathway of having a power grid that's essential, necessary, reliable, and allows us to modernize in a way that's critical as we decarbonize, if we're going to be successful.
All of that is going to come at a cost and we must come up with a way of mitigating that impact on those who are most financially vulnerable.
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