Supply chain constraints are exacerbated by the increasing competition for grid components from data centers. Developers are increasingly purchasing grid equipment for data center construction, such that in some areas of the country, utilities are no longer the primary purchaser of this equipment.

Most of this equipment is manufactured in whole or in part outside the United States.

While growing a domestic manufacturing base for grid equipment will help address supply chain challenges, this is a longer-term solution to an acute, immediate problem. Any federal actions, such as tariffs or trade restrictions, that increase the cost of grid components or time of delivery will exacerbate current shortages. Tariffs on steel and aluminum create additional cost pressures on broad range of finished products, including grid equipment, even in the absence of direct tariffs on that equipment.

•    What best practices or emerging technologies can enhance the reliability and security of the energy grid?

Reliability: Wide Area Monitoring Systems (WAMS) are instrumental in enhancing the reliability of utilities by providing real-time data and actionable insights into the performance and stability of power systems. WAMS employ Phasor Measurement Units (PMUs) to capture data at high frequencies. These PMUs generally measure electrical parameters at intervals ranging from 10 to 60 samples per second, which translates to measurement intervals of 16.67 milliseconds (60 samples per second) to 100 milliseconds (10 samples per second). This high- frequency data collection is crucial for providing real-time insights into the grid’s performance and stability, enabling utilities to respond quickly to any anomalies or disturbances. Here are several ways in which WAMS contribute to reliability:

1. Real-Time Monitoring: WAMS offer continuous monitoring of the power grid, enabling utilities to detect anomalies and disturbances as they occur. This real-time visibility helps in quickly identifying and addressing issues before they escalate into major problems.
2. Grid Stability: By monitoring key parameters such as voltage, current, and frequency across large geographical areas, WAMS help utilities maintain grid This is crucial for preventing outages and ensuring consistent power delivery.
3. Improved Fault Detection: WAMS can pinpoint the location and nature of faults more accurately, allowing for faster response and repair This minimizes downtime and reduces the impact of faults on the grid.
4. Enhanced Decision Making: The data collected by WAMS supports better decision-making processes by providing utilities with detailed information about grid performance. This helps in optimizing operations and planning maintenance activities effectively.
5. Integration with Renewable Energy: As utilities integrate more renewable energy sources, WAMS assist in managing the variability and unpredictability associated with these sources, ensuring they do not compromise the reliability of the grid.
6. Predictive Analytics: WAMS enable utilities to leverage predictive analytics, forecasting potential issues before they arise and implementing preventive measures to maintain reliability.

Overall, WAMS play a critical role in ensuring the robustness and reliability of utility operations by enhancing visibility, supporting quick response to issues, and facilitating effective management of complex power networks.

Security: Zero Trust Security is a cybersecurity model that can significantly enhance the security posture of electric utilities. Here’s how it can be beneficial:

1. Enhanced Protection: Zero Trust operates on the principle of “never trust, always verify,” meaning that no device or user, whether inside or outside the network, is trusted by default. This approach helps prevent unauthorized access and reduces the risk of cyberattacks, which is crucial for protecting critical infrastructure like power grids.
2. Network Segmentation: By segmenting the network into smaller, manageable sections, Zero Trust reduces the attack This means if a breach occurs, it can be contained within a segment, minimizing potential damage and preventing lateral movement across the network.
3. Continuous Monitoring and Verification: Zero Trust requires continuous monitoring and verification of users and devices accessing the This ongoing scrutiny helps detect and respond to threats in real-time, ensuring that any suspicious activity is promptly addressed.
4. Identity and Access Management: Strong authentication mechanisms, including multi-factor authentication (MFA), are central to Zero Trust, ensuring that only verified users can access sensitivesystems and data. This is vital for electric utilities to maintain control over who accesses critical infrastructure.
5. Data Protection: Zero Trust emphasizes encryption and secure data handling practices. By ensuring that data is protected both in transit and at rest, utilities can safeguard customer information and operational data from potential breaches.
6. Compliance and Regulatory Adherence: Implementing Zero Trust helps utilities meet stringent regulatory requirements related to cybersecurity, providing a framework for compliance with standards like NERC CIP (North American Electric Reliability Corporation Critical Infrastructure Protection).
7. Reduced Impact of Insider Threats: By limiting access based on roles and continuously verifying user actions, Zero Trust can mitigate the risk posed by insider threats, which are particularly concerning for utilities where internal sabotage could have severe consequences.

Overall, Zero Trust Security provides a robust framework for electric utilities to protect their networks and critical infrastructure against evolving cyber threats, ensuring operational integrity and reliability.

•    What are the timelines for data center, electric generation, and transmission construction, respectively? What does this say about the importance of our existing infrastructure?

 

GridWise members report that data centers in their service territories can be built in 12-18 months, whereas it can take 3 years for new generation and more than 5 years, and often closer to 10, to build new transmission. Providing power to new data centers varies depending on a utility’s excess generation capacity, which varies by location. A recent industry survey2 found that about 50 percent of respondents could energize their facilities in under 3 years, but wait times for other facilities ranged from 4-6 years (32 percent) to 7-9 years (11%).

Delays in providing power to new data centers occur not only because a utility need to build new generation; investments across the transmission and distribution grid (new lines, new substations, etc.) may also need to

occur before a data center can be fully connected to the grid. Access to power is not the only factor in timelines for data center construction: developers also must go through siting and permitting processes, obtain access to water for cooling, and address other state, local and federal issues.

In some locations, the mismatch in timing between building a data center and accessing power for the facility is leading some developers to consider co-locating on-site generation (typically natural gas turbines or

solar/storage). Some developers may see this as a bridge measure until the utility can build new generation, others may view co-location as a permanent solution. GridWise members, which include data center developers, believe that few if any data centers will be “off-grid,” meaning that we expect virtually all data centers to be connected to the grid even if they are generating their own power. Co-location does not necessarily reduce consumers’ share of the costs of meeting data center energy demand: natural gas prices could increase, and utilities will still have to make upgrades to the grid to provide reliable back-up power and to manage the impacts of large loads on the system. Regulators and policy-makers must carefully consider requests for co-location and weigh benefits and costs to both data center developers and other consumers. The GridWise Alliance will release a more comprehensive statement on co-location of generation resources and large load in the next month.

•   What gaps and/or roadblocks exist in current policy frameworks that could hinder America’s ability to meet the energy demands of the AI era?

As mentioned in the previous answer, fairly allocating the costs of grid upgrades (including generation) among consumers of all sizes is critical for maintaining affordable electricity that supports economic development and national security. A number of states have put forth innovation rate structures for cost allocation—see answer to the next question. DOE can provide technical support to states and further analyses to help develop innovative cost allocation tools. DOE has a long history of successfully providing such technical assistance without influencing specific rate cases.

Siting and permitting reform is essential for addressing the long timelines of building new grid infrastructure. Significant improvements in coordination between federal, state, and local governments and agencies are needed to reduce permitting process inefficiencies. Every Republican and Democratic administration over the last 2 decades has attempted to improve this coordination, but unless Congress enacts siting and permitting reform, these efforts will continue to result in minimal improvements. At the federal level, multiple agencies have overlapping and sometimes conflicting roles in implementing the numerous statutes governing siting and permitting (National Environmental Policy Act, Clean Water Act, Endangered Species Act, land conservation and historic preservation, etc.). Congressional committees also have overlapping and sometimes conflicting oversight over these statutes, so meaningful siting and permitting reform must be multi-jurisdictional, with multiple committees contributing to an overall legislative approach.

•    Are there state-level or international regulatory models that offer insights for effective policy adaptation in this space?

States are at the forefront of regulatory innovations to ensure energy affordability through new tariff structures. For example, stand-alone data center tariffs (rather than rate case increases) can insulate the ordinary consumer from rate increases associated with grid upgrades to meet AI energy demand. These tariffs can include a commitment by data center developers to procure grid equipment with assurances that any excess energy will be supplied back to the wholesale market only.

III.  Strategic Competition: Outpacing China

America’s global economic competitiveness is driven by affordable electricity. To keep power affordable, it is critical that all energy consumers use that energy as efficiently as possible. Data center developers must

continually strive to minimize energy per computation, adopting measures like liquid cooling, digital twin systems, and waste heat recovery to reduce energy demand.

America’s competitiveness depends on a skilled workforce, and U.S. innovation is threatened by a lack of workers proficient in specialized skills required for both advancing AI technologies and modernizing the electric grid. The

U.S. must address these skills shortfalls by strengthening training and educational pipelines for students and current workers through expanded STEM education, public private partnerships, and reskilling programs.