Projected searing temperatures across the U.S. and the proliferation of data centers are expected to send electricity consumption to a four-year high this summer, testing the grid and pushing up power prices, the Federal Energy Regulatory Commission said on Thursday.
A shrinking pool of around-the-clock power plants, which are retiring to make way for cleaner energy sources, will further pressure the electrical system, FERC said in its annual assessment.
WHY IT MATTERS
The U.S. as a whole is expected to have enough power supplies to meet demand under normal weather and power supply conditions. But New England, the Midwest, the Mid-Atlantic, the Southwest and Texas face higher risks of power shortfalls under a range of anomalies, FERC said.
“These include above-normal electricity demand, periods of low wind and solar output, and wide-area heat events that disrupt available transfer and generator availability,” the regulator said in its report. “If such conditions occur, it may require operational mitigations to avoid facing reliability issues.”
Power shortfalls can lead to power outages and rising bills.
PUSHING UP DEMAND
The western and southeastern regions have a 40% to 60% chance of higher-than-average temperatures this summer, while the central U.S. and Northeast have a 30% to 50% chance, FERC said, citing the National Oceanic and Atmospheric Administration.
Extreme heat prompts homes and businesses to crank up energy-intensive air conditioning systems. Drought can mean lower hydropower supplies. Wildfires and hurricanes, another risk during the summer months, can disrupt power from being delivered.
Rising power demand from developments like growth in AI data centers will also increase demand this summer, FERC said.
With rising power use, the retirement of fossil-fired power plants outpacing new electricity generation additions, and rising natural gas prices, power bills are expected to be higher this summer than last year, FERC said.
(Reporting by Laila Kearney; Editing by Leslie Adler)