Data centers are driving the building of gas-powered plants in the Southeast but it will leave ratepayers on the hook if higher energy needs do not materialize.

A https://ieefa.org/resources/data-centers-drive-buildout-gas-power-plants-and-pipelines-southeast from the Institute for Energy Economics and Financial Analysis looked at utility and pipeline company plans in North Carolina, Georgia, South Carolina and Virginia. Utilities in the four states are expected to build 20,000 megawatts of natural gas power plants by 2040.

Cathy Kunkel, energy consultant at the Institute for Energy Economics and Financial Analysis and co-author of the report, said it is despite relatively flat energy demand from consumers, which means data centers will be using a lot of power.

"Generally speaking, in the Southeast data centers are responsible for anywhere between two-thirds to more than 85% of this projected demand growth," Kunkel reported.

Kunkel pointed out there is a high risk utility and pipeline companies will overbuild infrastructure because demand from data centers might not materialize, especially with questions around the financial viability and energy usage of artificial intelligence.

If plants are built but companies operating data centers scale back plans, Kunkel stressed utilities would still need to charge those costs to ratepayers.

"It's really important that utility regulators start taking proactive action to make sure that ratepayers and consumers are not on the hook for what may turn out to be a tech industry bubble that results in unneeded electricity infrastructure," Kunkel urged.

Kunkel noted plans to build natural gas plants are in opposition to North Carolina's legislatively mandated climate goals to attain carbon neutrality by 2050.

"These forecasts for data center development and the massive buildout of natural gas infrastructure that the utilities are planning in response is just completely incompatible with the action that should be taken on climate change at the moment," Kunkel contended.

As President Donald Trump rolls back clean energy initiatives at the federal level, states like Maryland are pushing ahead with their own energy transitions.

Legislation moving through the Maryland General Assembly includes a bill to codify Gov. Wes Moore's campaign pledge, to transition the state to 100% clean energy by 2035. Another bill, known as the Abundant Affordable Clean Energy Act, would expand battery storage to the regional grid.

Rebecca Rehr, director of climate policy and justice for the Maryland League of Conservation Voters, said clean energy investments can also help the economy and combat rising energy costs.

"We can create a model of economic growth and clean energy adoption that other states can follow," Rehr contended. "We can really lead here, especially in the face of federal rollbacks. You can have economic growth and a growth of the clean energy industry here in Maryland at the same time. These go hand in glove."

Energy costs for many Maryland households have recently gone up 50% for gas and 30% for electricity.

Clean energy advocates in the state are also playing defense. Top Democratic leaders in the General Assembly introduced the Next Generation Energy Act, to build new natural gas plants. Rehr argued it would impede progress the state has made in the clean energy transition.

"If this bill moves forward as it was introduced, it not only seeks to build new gas in Maryland," Rehr pointed out. "It seeks to fast-track new gas in Maryland, which could have consequences and again sort of flies in the face of any environmental justice provisions in state law."

The state also has goals to produce 8.5 gigawatts of wind power by 2031.

Texas would be one of five states to suffer the most if the Trump administration repeals the Inflation Reduction Act, according to a report from the think tank Energy Innovation.

Since the legislation was enacted in 2022, more than $17 billion in clean energy and transportation projects have been announced statewide.

Robbie Orvis, senior director for modeling and analysis at Energy Innovation, said ending the tax credits and reducing clean energy projects would negatively affect the Texas economy and environment.

"What the IRA does is, it creates an incentive for developers to build even more clean electricity," Orvis explained. "When those clean electricity plants come online, they help to lower the cost of electricity and bring down rates. That means that Americans pay less for their electricity every year."

The report showed ending the programs would increase the average annual household energy costs in Texas by more than $90 a year in 2030, and more than $370 a year by 2035. Some Republican lawmakers support keeping the IRA tax credits in place but the Trump administration said renewables make energy more expensive.

Orvis noted the nationwide study showed what would happen to energy projects and jobs between 2025 and 2035 if cuts are made.

"When we compared the top 10 states for each of those, there were five states that were in the top 10 in both of those categories: Texas, Florida, California, Pennsylvania and Georgia," Orvis reported.

The results mirror analysis from financial services company Moody's, which analyzed President Donald Trump's campaign policy platform in August 2024 and found it would increase inflation and weaken economic growth, causing a recession as soon as mid-2025.

A Monday court hearing features a case pitting two North Dakota counties against a large carbon capture project. The legal challenge stands in the shadows of heavier opposition across the border, and opponents here hope for similar momentum.

Burleigh and Emmons counties are appealing permit approval by North Dakota regulators for a multistate pipeline. A company wants to capture emissions from ethanol plants for underground storage. Safety concerns, local restrictions and property owners' rights are part of the backlash.

Steve Bakken, vice chair of the Burleigh County Commission, said there is a disconnect between what state leaders who back the project promote, versus what they do.

"We seem to have a track record building of our legislature liking to speak about local control, except for when it's not convenient for what they want to get through," Bakken observed.

This session, North Dakota lawmakers voted down oversight bills for the emerging carbon capture industry. But in South Dakota, concerned property owners have had success and a new law there has stalled the state's section of the project. Project supporters said it could help the region's economy by keeping ethanol producers thriving.

Today's hearing is for the company's request to dismiss the case.

The firm behind the project, Summit Carbon Solutions, has come under scrutiny over its encounters with property owners as it seeks land agreements.

Dustin Gawrylow, managing director of the North Dakota Watchdog Network, said organizers don't like how the big project is being forced through. Regardless of whether the permits stand, he said lawmakers should not look past the groundswell of opposition.

"This time, it may not have impacted North Dakota policy or the project here in North Dakota," Gawrylow acknowledged. "But ultimately, I do believe that down the road, there will be a project that turns the tide in North Dakota on these issues as well."

A key difference in the policy approach of the two states may be North Dakota's stronger connections to the oil and gas industry. The Summit pipeline is also touted as a way to convert the emissions to fuel sources, which is a main point of contention for environmentalists.

Summit has rejected concerns about many aspects of the project, and said despite recent obstacles, it will move forward.


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