The federal, bureaucratic push to expedite power grid interconnections is picking up steam, but a key headwind is the lack of “aptitude” and communication from hyperscalers as they rush to electrify their AI data center hubs, said Laura Swett, chairwoman of the Federal Energy Regulatory Commission, which oversees grid connections and pipeline approvals.
A combination of Supreme Court rulings, federal rulemaking, and a renewed congressional push for infrastructure permitting reform are all helping speed up approval and construction timelines—while reducing environmental reviews. But a big roadblock is the “tension” between Big Tech hyperscalers wanting to move faster and the “lack of understanding” of the processes, Swett said at the CERAWeek by S&P Global conference last week.
“I see difficulty and a breakdown of communication in many instances,” Swett said.
“They (hyperscalers) are very diverse in their aptitude of how things work,” she added. “I see some very successful examples, and some that just continue to butt heads.”
In their defense, she said, the bureaucratic process is a “wonky, very nerdy…morass and a black box” to most people. But the hyperscalers are not reaching out to FERC as much as she hoped, Swett said. She speaks to traditional utilities “probably nine times” more than the hyperscalers. They need more “very strategic communication and very pointed education,” she said.
“The hyperscalers, when they do come speak to us, they don’t speak FERC,” Swett said. “Their complaints about the utilities, quite frankly, to me show a lack of understanding of how the utilities normally function.”
Speeding up the rulemaking
FERC has until the end of April to make a decision on rulemaking after the Energy Department took the unusual steps of asking FERC to take greater jurisdiction of grid interconnects for loads larger than 20 megawatts to accelerate the process.
Whatever the result, fights could develop over the federal government taking more authority from states’ rights on the power grid.
“Our electric grid…is very old, and we haven’t had any growth in demand for decades, and now we’re looking at exponential, explosive demand,” Swett said. “So, how do we get this very slow-moving ship to turn into a speedboat that’s going in several directions at the same time?”
She insisted that FERC will not slash regulations in a way that results in endless litigation. “I don’t want you to be in court for nine years because we made a crappy order that didn’t keep the law in mind,” Swett told energy leaders, arguing for “well thought out and durable” rulemaking.
One major victory for the energy sector, she said, was last year’s 8-0 U.S. Supreme Court ruling (Justice Gorsuch recused himself due a client conflict) in Seven County Infrastructure Coalition v. Eagle County over construction of a Utah railroad to carry crude oil.
In FERC’s view, the ruling means that indirect emissions from projects no longer need to be considered in the National Environmental Policy Act environmental (NEPA) review process. Essentially, if a natural gas pipeline is being approved, the process doesn’t need to consider the indirect effects of burning the gas at a power plant.
Swett said FERC already has cut 70 days off the NEPA process because of the court ruling and additional internal efficiencies.
“We’re on the brink of a cliff in our country, and we need to get this generation on as quickly as possible,” she said.
Permitting reform for infrastructure
Energy Secretary Chris Wright touted his optimism for congressional permitting reform, which is being considered to expedite the timelines for all energy sources, from wind and solar farms to powerline transmission to gas pipelines.
“There are a lot of Democrats that are becoming very common sense about energy,” Wright said. “I love it.”
Indeed, given the AI data center boom and the growing geopolitical issues of energy security from the Iran war, Democratic senators Martin Heinrich, D-N.M., and Sheldon Whitehouse, D-R.I., put out a statement in early March saying they will “reopen negotiations on permitting reform,” so long as the Trump administration stops attacking already-permitted wind projects.
“We look forward to working on a bipartisan bill that will speed infrastructure development, lower energy costs, and create good-paying jobs,” they said.
Rich Powell, CEO of the Corporate Energy Buyers Association and the nonprofit Clean Energy Buyers Institute, said he is very supportive of reform if it is “technology neutral,” so politicians cannot target either renewables or fossil fuels. And there is growing bipartisan support, he said, although he’s been optimistic before too.
“This is the third congress in a row we’re taking a great, big run at permitting reform,” Powell said.
This story was originally featured on Fortune.com