Recently KBIA reported on a new coalition in the energy sector:
Electric companies in the Midwest say new large scale power lines are needed to get more energy onto the grid to serve big power consumers such as artificial intelligence data centers. Now, the utilities argue reducing competition is the fastest way to [build transmission infrastructure].
Specifically, utilities want to reduce competition by halting competitive bidding for multi-state transmission projects, as the bidding process can take 16 to 20 months. If approved, the utilities would be the default developers of those projects, with no competition involved. In Missouri, both Ameren and Evergy, our state’s largest utilities, operate in multiple states and would gain that right of first refusal.
For starters, it’s worth acknowledging that 16 to 20 months is a long time to select a developer, and these companies are right that we quickly need more energy to serve big new customers.
This situation illustrates why Missouri is between a rock and a hard place in its efforts to modernize our electricity grid. Do we really need to choose between (1) remaining content with the slow, bureaucratic speed at which the energy sector operates, which is unsuited for this time of rapid and unpredictable growth or (2) giving up on a competitive bidding process and simply awarding the project to the biggest utility in the region?
There has to be a better way—and fortunately, there is. Missouri instead could allow private electricity grids (also known as consumer regulated electricity, or CRE) for large customers like data centers.
With CRE, a company like Amazon could partner with a supplier that would build and possibly operate a power plant and transmission/distribution exclusively for its customer(s). Since these grids would only be serving islanded, sophisticated clients, they would not need to be regulated like a utility serving the general public—meaning less red tape and fewer delays in getting power plants up and running.
Authorizing CRE would not mean replacing the existing regulated grid. Rather, it would create parallel pathway to serve the growing number of big power customers. Allowing private companies to work directly with electricity providers also would incentivize both parties to find innovative ways to bring power to data centers and other industries. Missouri doesn’t have to sacrifice competition for speed; rather, it can create more pathways for competition simply by letting the power suppliers and the power providers negotiate the price and schedule themselves.
