HYDE-SMITH, FERC COMMISSIONERS EXAMINE AFFORDABILITY AS DATA CENTERS PROLIFERATE

HYDE-SMITH, FERC COMMISSIONERS EXAMINE AFFORDABILITY AS DATA CENTERS PROLIFERATE

Senate FERC Oversight Hearing Heavily Focused on Rising Power Demands & Affordability

VIDEO: Senator Hyde-Smith Discusses Electricity Affordability with FERC Commissioners.

WASHINGTON, D.C. - U.S. Senator Cindy Hyde-Smith (R-Miss.) on Wednesday sought additional details on the mechanisms being put in place to protect families, small businesses, and communities from high electricity bills as data centers and large load manufacturing projects come online in states like Mississippi.

The Senate Energy and Natural Resources Committee conducted an oversight hearing on the Federal Energy Regulatory Commission (FERC), the agency tasked with addressing rising power demand from data centers and overseeing the implementation of President Trump's Ratepayer Protection Pledge Proclamation.

"We talk a lot about affordability, and in your testimonies and your written statements, it was one of the top priorities. This administration and this commission continue to take action to be so conscious of that that ratepayers aren't burdened by the higher cost. Mississippi, my home state, continues to be at the forefront of safeguarding ratepayers by ensuring companies, like data centers, pay their fair share for large loads," Hyde-Smith told the five FERC commissioners testifying at the hearing. "What mechanisms is FERC implementing specifically for large load customers to pay upfront payments and commitments to maintain minimum financial contributions to keep the rates from rising?"

FERC Chairman Laura Swett said the agency is actively working to deploy the President's proclamation through a series of steps to "ensure that the upgrades that are required by large load is not shouldered by consumers. So, we look at it on a case-by-case basis and across the markets."

In June, FERC issued show cause orders under Section 206 of the Federal Power Act to six regional grid operators under its jurisdiction to encourage modernized rules for interconnecting large loads.

Commissioner David Rosner told Hyde-Smith that FERC is working with states, like Mississippi, to help ensure the integration of large load projects into the grid are conducted with attention to detail and transparency.

"Fundamentally, this problem is a math problem. It's an accounting problem. It's not a glamorous problem to solve. It's kind of like let's figure out how much infrastructure we built for you and then let's make sure that gets on your bill," Rosner said. "We're requiring contracts to make sure that we don't have stranded cost if you leave early. We're requiring contracts that, if we have to build a lot of infrastructure up front and the project isn't energized, that we have a way to build the project for that cost and it doesn't go to other consumers."

"In our rules, we're asking people, if you built a network upgrade to serve a large load, you got to make that public and let the state commission know so that they can then use their large load tariff and charge it to the right customer," Rosner added.

In general, the Ratepayer Protection Pledge Proclamation seeks commitments from technology firms to supply their own electricity generation, covering infrastructure upgrades whether they use the power or not. It also seeks independent rate structures for these operations through direct negotiations with utilities and state governments. It also requires hyper-scalers to coordinate with grid operators to enhance grid resilience and help prevent brownouts.

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