Utilities seek federal pause on grid bidding amid AI-driven power demand

A coalition of electrical utilities, led by Xcel Energy and American Transmission Company (ATC), has formally petitioned the Federal Energy Regulatory Commission (FERC) to temporarily suspend or ease competitive bidding requirements for new electricity transmission projects. The utilities contend that these bidding rules introduce significant delays, which could impede the rapid development of power infrastructure essential to support the escalating energy demands of artificial intelligence and data centers, thereby risking America's technological competitive edge. The complaint, filed on April 7, specifically asks FERC to exempt certain major grid upgrades from the competitive process for at least five years, or allow regional grid operators like the Midcontinent Independent System Operator (MISO) to make case-by-case exemptions. They argue that the current competitive bidding framework, implemented by FERC in 2011 to encourage lower costs, adds months to project timelines, as evidenced by a recent case in Wisconsin where ATC eventually won substation projects in Fond du Lac, Ozaukee, and Sheboygan counties to serve a Vantage data center in Port Washington, after a 15-month delay in the initial award to Viridon. Conversely, national and statewide ratepayer advocacy groups, including the Wisconsin Citizens Utility Board and the Electricity Transmission Competition Coalition, have voiced strong opposition. They argue that abandoning competitive bidding would remove crucial cost-containment measures, leading to higher electricity bills for consumers, and that competitive projects have a better track record for cost and schedule adherence. They also highlight that non-competitive projects, such as ATC's Cardinal-Hickory Creek transmission line, also experience delays. The controversy reflects a long-standing debate over the balance between competition, efficiency, and cost in transmission infrastructure development. Data center electricity demand is projected to reach up to 25% of the country's total energy use within five years, intensifying the urgency of this policy decision.