In late October, Energy Secretary Chris Wright sent a proposal to the Federal Energy Regulatory Commission (FERC) that included principles to “ensure all Americans and domestic industries have access to affordable, reliable, and secure electricity. To do this, large loads, including AI data centers, served by public utilities must be able to connect to the transmission system in a timely, orderly, and non-discriminatory manner.” (Load refers to any facility that consumes electricity, and large loads are defined as facilities that consume 20 megawatts (MW) or more of power.) Secretary Wright directed FERC to initiate a rulemaking and make a final decision on the Department of Energy (DOE) proposal by the end of April.
America’s Power submitted comments to FERC on the proposal because of the important role the coal fleet can play by providing dependable electricity for large loads. Our comments emphasize the need to establish an expedited process for large loads, such as data centers, that take advantage of the underutilized capacity of existingelectric generating facilities. In other words, the transmission interconnection process should incentivize the use of underutilized existing generating capacity, not just new capacity.
Most coal-fired power plants produce less power than they are actually capable of generating. The average capacity factor for the nation’s coal fleet was 43% last year, which means there is considerable underutilized generating capacity available to serve large loads. (Capacity factor is the amount of electricity that is actually generated by an electricity source compared the amount that the source could generate if it operated continuously.) Currently, the nation’s coal fleet totals some 176,000 MW of generating capacity. To illustrate the potential magnitude of this underutilized capacity, increasing the average capacity factor for the coal fleet to just 63%, the average fleet-wide capacity factor in January and July of this year, would translate into slightly more than 35,000 MW of additional power, or enough to operate 35 (more or less) of the largest hyperscale data centers. Thus, large loads that enter into contracts with existing coal-fired generators to produce more power should be eligible for fast-track interconnection to the grid.
The DOE proposal recognizes the advantages of siting large loads near or at the same point of transmission interconnection as new generation Our comments urged the Commission to recognize the benefits of siting large loads near existing generating facilities also because close proximity can reduce or even eliminate the need for costly transmission upgrades.